Weekly Market Watch

The World is Not Enough

Nvidia Corp. could not save U.S. stocks from a week of overall negative performance. The company’s strong earnings results were outweighed by a market outlook that underwhelmed high investor expectations. Artificial intelligence (AI) disruption concerns rippled through U.S. equities, even as the software sector attempted to rebound. International equities outperformed their U.S. counterparts in a continuation of this year’s market rotation.

Bonds rallied last week due to a risk-off sentiment, and the 10-year U.S. Treasury yield dipped below 4% for the first time since November. Geopolitical tensions influenced commodity markets as precious metals prices rebounded, with gold delivering its best weekly return in a month. Oil prices continue to grind higher, with Brent crude oil approaching its highest level since last summer.

Market Outlook

Uncertainty hangs over markets as AI disruption concerns work their way through several sectors and investors monitor trade policy and geopolitical developments. We believe that in the long term, more companies will benefit from AI than be negatively disrupted by it, despite the market’s short-term focus.

Diversification is important in the current market environment, and we recommend leaning into international equities, which could benefit from positive fiscal stimulus, growth trends and the potential for lower correlations going forward.

Table of the Week

With fourth-quarter 2025 earnings season coming to an end, the blended earnings growth rate stands at a robust 14.2%, well above the initial estimate of 8.4%—and marks the 11th consecutive quarter of year-over-year (y/y) growth.

The Technology sector saw the largest week-over-week growth, driven by Nvidia’s positive earnings results that were supported by strong chip and data-center demand.

For full-year 2026, growth is projected to be at 14.7%, while first-quarter 2026 growth estimates are currently at 11.5%.

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