Financial markets remain suspended between enthusiasm for artificial intelligence and concerns related to the persistence of inflation. It is the reading proposed by Hans-Jörg NaumerDirector Global Capital Markets & Thematic Research at Allianz Global Investors, in the May 22, 2026 edition of The Week Ahead.
AI and corporate profits push the stock markets
According to the analysis, solid corporate results, multibillion-dollar investments in AI and expectations of increased productivity continue to support stock prices. On the other side, geopolitical tensions, persistent inflation and fears of an economic slowdown weigh heavily. The United States remains the reference for international equities, driven by earnings dynamics and the expansion of AI infrastructure, with significant investments in data centers, semiconductors and data processing capabilities. However, AllianzGI reports a growing debate on the long-term sustainability of the valuations achieved by some stocks linked to the AI boom
USA and Asia in pole position, Europe in trouble
The overall scenario for equities is described as favorable for equities, supported by inflows into funds and buyback programmes, with an increasing importance of stock selection. At a geographical level, in addition to the United States, the main Asian technology hubs are indicated as favourites. In Europe, the prospect of a significant recovery in profits has weakened, with the industry penalized by concerns about energy supply linked to tensions in the Middle East; the possibility of new public investments remains open, in particular from Germany. The Japan it benefits from accommodative monetary policy, fiscal stimulus and progress in corporate governance, while emerging markets appear overheated in the short term.
Technology still the protagonist, banks in its wake
At a sector level, technology remains strong, but some investors are reportedly reducing overweight positions in AI stocks at higher valuations. Mechanical engineering, chemicals and raw materials benefit indirectly from the expansion of digital infrastructure, while the banking sector is supported by loan growth and stable net interest margins.
Bonds: the shadow of stagflation and the Iran issue
On the bond front, AllianzGI signals the risk of stagflation resulting from the possible increase in tariffs and energy prices in the United States. Investment-grade corporate bonds and some emerging market securities are still considered attractive, in a context of high government deficits and geopolitical tensions. The conflict with Iran remains a central issue for the repercussions on the oil market.
Focus on consumer confidence, PCE and US GDP
On next week’s agenda, the Conference Board USA consumer confidence index and the Case-Shiller index are expected on Tuesday. Watch out for European Commission sentiment indicators on Thursday, April US Personal Consumption Expenditures (PCE), second quarter GDP estimate and unemployment benefits. Tokyo consumer prices, German data on import prices, unemployment and preliminary inflation for May, as well as the Chicago PMI, will be released on Friday.
