J.P. Morgan Private Bank Unveils 2026 Mid-Year Outlook: Promise and Pressure

• The closure of the Strait of Hormuz is the largest oil supply shock since World War II but it is not an isolated event; it is the latest chapter in a structural reorientation of the global economy toward security and resilience
• Compelling opportunities in emerging markets, security-driven investment, and national champions
• Rolling shocks are structural, not cyclical, and stocks and bonds alone are no longer enough
• The narrative on artificial intelligence has become too pessimistic, the evidence points to a continuing super-cycle

NEW YORK, May 11, 2026 /PRNewswire/ -- J.P. Morgan Private Bank today released its 2026 Mid-Year Global Investment Outlook, Promise and Pressure, an examination of the forces reshaping global markets at the midpoint of a pivotal year.

"At the start of 2026, we identified global fragmentation, inflation, and artificial intelligence as the defining forces shaping the investment landscape, and the months since have only sharpened their relevance. As these themes converge and accelerate, they are demanding a fundamental rethink of how portfolios are built, protected, and grown," said Grace Peters, Co-Head of Global Investment Strategy at J.P. Morgan Private Bank.

"The greatest risk investors face today isn't volatility itself - it's the impulse to overreact to it. In moments like these, the instinct to retreat to the sidelines can prove to be the most costly decision of all. Even against a backdrop of profound global geopolitical uncertainty, markets have continued to reach all-time highs. Staying invested with intention, aligned to a disciplined long-term plan, is what separates resilient portfolios from the rest," said Stephen Parker, Co-Head of Global Investment Strategy at J.P. Morgan Private Bank.

Building on those three themes, J.P. Morgan Private Bank's 2026 Mid-Year Global Investment Outlook examines how each has accelerated, setting out the risks, opportunities, and implications for investors.

Fragmentation: A Structural Shift, Not an Isolated Shock

The closure of the Strait of Hormuz is the largest oil supply shock since World War II. For investors, it is important to understand what it represents: not an isolated event, but the latest chapter in a structural reorientation of the global economy away from efficiency and toward security and resilience.

Markets have already begun to price this shift. European defense stocks doubled in 2025, natural resource equities rallied more than 30%, and gold has surged 130% over three years. The question for investors is not whether fragmentation is real but if portfolios are positioned for it.

"Investors must walk a fine line - not overreacting to short-term headlines, but not ignoring long-term shifts either. We see compelling opportunities in emerging markets, security-driven investment, and the national champions emerging on all sides of a bifurcating world," said Grace Peters.

Inflation: Rolling Shocks are the New Reality

Even before the conflict in Iran, U.S. inflation was running near 3%. The energy price spike has only deepened a structural challenge: throughout the 2020s, U.S. consumer prices have gained over 25% cumulatively, while core fixed income has returned just 5%. With both bonds and stocks selling off meaningfully since the conflict began, investors need a broader toolkit – one that includes real assets, active strategies, and a disciplined plan built to withstand inflationary pressure, not just ride out a cycle.

"Commodity-linked equities, global infrastructure, and real estate offer inflation-resilient cash flows and have historically delivered 8%–12% annualized returns across different inflation regimes. Yet nearly 80% of family offices surveyed said they have no exposure to infrastructure, despite expressing concern about inflation," comments Stephen Parker. He concludes, "Macro hedge funds and relative value strategies – which delivered positive returns in 2022 when both stocks and bonds fell – remain an important complement."

Artificial Intelligence: The Super-Cycle is Underappreciated

Artificial Intelligence (AI) could prove to be one of the most powerful disinflationary forces in a generation, lowering the cost of expertise and increasing economic output without additional human labor. Yet the prevailing narrative remains fixated on disruption: labor displacement, unemployment, and business model destruction.

"AI is easing the constraint of finite expertise – just as electricity eased the constraint of limited power, and the computer eased the constraint of limited information. The scope of its impact is difficult to price, which is exactly why markets are struggling with it. Our guidance is to gain exposure to the data center build-out beneficiaries, explore private markets, and avoid legacy sectors vulnerable to disruption," said Grace Peters.

J.P. Morgan Private Bank's 2026 Mid-Year Global Investment Outlook: Promise and Pressure is available now.

About J.P. Morgan Private Bank

J.P. Morgan Private Bank provides customized financial advice to help wealthy clients and their families achieve their goals through an elevated experience. Clients of the Private Bank work with dedicated teams of specialists that bring their investments and financial assets together into one comprehensive strategy, leveraging the global resources of J.P. Morgan across planning, investing, lending, banking, philanthropy, family office management, fiduciary services, special advisory services and more. The Private Bank oversees more than $3.5 trillion in client assets globally (as of 3/31/2026). More information about J.P. Morgan Private Bank is available at privatebank.jpmorgan.com.

Disclaimers

This material is intended as a general market commentary, and not a guarantee of future results or investment advice. Any views, estimates and strategies expressed are based on current market conditions and are subject to change without notice. Outlooks and past performance are not guarantees of future results.

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