Insights June 17, 2026

Narrow leadership, resilient earnings and persistent risks

Authors: Lorenz Majal, Senior Investment Strategist - Shreenidhi Jayaram, Investment Strategist - Jon Byrne, Investment Strategist - Florian Hartmann, Investment Strategist - Heval Ag, Investment Strategist - Kaniz Fatema Rupani, Investment Strategist

Key takeaways 

  • Earnings resilience should keep equities supported, but elevated valuations leave little room for earnings to disappoint.
  • Market leadership remains narrow, driven by AI mega caps, Asian semiconductors and energy beneficiaries.
  • US–Iran improvements support equities, but may shift regional and sector leadership

In this Viewpoint Equity, we revisit the drivers of global equity markets as resilient earnings, AI momentum and structural investment themes continue to offset a more challenging macro and geopolitical backdrop. While equity indices have recovered strongly, leadership remains narrow and valuations leave little room for earnings to disappoint. We examine why earnings should remain the key driver of returns, where regional and sector leadership may broaden if energy and geopolitical risks ease, and why selectivity remains essential in a market shaped by dispersion, rotation and elevated expectations.