As investors assess the next phase of the AI growth story, we believe diversifying equity exposure remains key. We expect the next leg of stock gains to be marked by a broadening of market leadership.

We remain constructive on the AI theme, but the market narrative is gradually shifting from strong near-term growth to the durability of spending beyond 2027. Investors should ensure diversification and selectivity in their exposure.

Despite the recent decline in commodity prices, we believe fundamentals should provide support in the coming months. We also believe broad commodity exposure offers diversification, inflation hedging, and downside protection in a portfolio context.

Markets are looking to June’s payrolls today for clues on the Fed’s interest rate path after Chair Kevin Warsh offered little indication. We maintain the view that current market conviction around Fed rate hikes is too aggressive and see an opportunity to add to short- and medium-maturity quality bonds.

Global equities delivered a strong performance in the second quarter, and we think the momentum can continue in the coming months. The next phase of the rally should, in our view, see a broadening of market leadership.

Investors have shifted some capital back into health care amid tech sector volatility, seeking both stability and growth. Recent policy changes around GLP-1s and breakthrough therapies are fueling new optimism for the sector’s outlook in the coming months.

We continue to like the semiconductor complex of the AI story, but recent market volatility has pointed to certain risks worth monitoring. The key for investors remains diversification, both within and beyond AI.

While oil may stay under pressure in the near term, we expect prices to recover over the coming months, as the normalization of traffic through the Strait of Hormuz and the recovery of shut-in production may prove slower than expected. We continue to see value in broad commodity exposure in a portfolio context.

Gold has fallen to its lowest level in nearly eight months, but we think this offers an opportunity for underallocated investors to build strategic exposure. We believe the investment case for gold remains positive, as we believe the Fed is unlikely to raise rates in the near term, and the US dollar should weaken as the year progresses. Gold has also historically provided diversification benefits in a portfolio context.

Risk sentiment weakened amid pressure on semiconductor stocks, but we believe the recent correction should be seen in the context of the strong rally in recent months. While we remain confident in the AI growth story, we also expect that the next phase of stock gains will come from a broader range of opportunities.