Energy price spike, geopolitical conflict and shifting narratives

Global equities began 2026 on a strong note, but the quarter quickly turned more cautious as geopolitical tensions in the Gulf drove a sharp oil spike and raised fears of inflation and stagflation.

The energy shock has shifted market leadership toward asset-heavy stocks, while many defensive sectors and quality growth names have been hit by valuation pressure despite still-solid earnings trends.

At the same time, AI continues to reshape expectations for software, data, and white-collar business models, creating both disruption risk and selective opportunities for companies that can adapt.

In this environment, disciplined stock selection matters more than broad sector bets, especially as volatility remains high and policy responses stay uncertain.

For investors, the key question is whether current valuations are pricing in enough downside from conflict escalation or enough upside from de-escalation and resilient corporate fundamentals.