Stock markets and bond markets are being swayed by different forces to a considerable degree, says Deepak Puri, the Private Bank’s Chief Investment Officer for the Americas. “For equity markets, AI is the main story. For bond markets, it’s what’s happening to energy prices.” The technology sector is likely to continue its leadership of equity markets, Deepak says, noting that AI infrastructure spending is having outsized benefits for data centres and other elements of that ecosystem. Bond markets however are contending with the energy price shock of the Iran war and its feed-through effects on inflation and central-bank policies.

The Private Bank recently held its quarterly CIO Day, when it updates its 12-month forecasts for markets and the economy, and “there was a big focus on the energy supply shock that’s going across the globe”, Deepak says. Growth expectations for the US were lowered for 2026 as a result, and consumer demand in the eurozone is likely to come under pressure from higher prices. But US corporate earnings are also expected to rise, so the S&P 500 target for mid-2027 received an upgrade.

For the week ahead, “on the economic front, it’s an inflation week,” Deepak says, noting that the Fed’s preferred inflation gauge is due in the US, May flash inflation data is due for the eurozone, and Japan will also report on price rises.

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