Equities

financial markets

What's the outlook for equities?

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AI boom is increasingly on borrowed time

We continue to think the AI rally is reaching its final innings, as recent headwinds to equity markets owe more to surging government bond yields than a re-assessment of the prospects for tech firms. Even so, we see a growing number of warning signs in US equities that point to a downturn over the next year or so. While tech-heavy equity markets, such as those in the US, Korea, and Taiwan, may continue to outperform over the next few months, we expect them to underperform over a medium-term horizon as the AI boom comes to an end.