Futures and options traders work on the floor of the NYSE American (AMEX) of the New York Stock Exchange on September 8, 2026 in New York City, USA.
Brendan McDiarmid | Reuters
A spike in oil prices and bond yields has made the market volatile in recent weeks, but many investors are holding on and hoping for profits.
Global government bonds decline further due to US impact 10 year treasury Yields topped the closely watched 5% mark on Tuesday, but oil prices remain above $100 a barrel as the supply shock from the Iran war continues.
Stocks have been largely down this year despite the global energy crisis, soaring bond yields and the outbreak of volatile trade amid geopolitical developments. S&P500 It’s up more than 10.8% so far this year. High-tech oriented Nasdaq Composite It’s up 11.8% since the beginning of the year. Dow Jones Industrial Average It has increased by 8.4%. Beyond Wall Street, stocks are publicly traded South Korea, Japan and Europe We also gathered together.
Many market participants do not seem hesitant to pour cash into the stock market, Bank of America’s latest Global Fund Manager Survey revealed on Tuesday, as stock prices became more volatile this week after a leading AI voice warned that technology is moving too fast to be safe and that safeguards are needed.
The survey found that while the “excessive bullishness” seen over the summer has faded, investors remain broadly optimistic about growth and earnings, with most expecting continued heavy spending on AI.
A net 49% of asset managers were still overweight global equities in September, according to a survey of 170 investors managing $470 billion in assets. Although this represented a slight decline from the previous month, equities remained the most common overweight position among all asset classes.
The survey found that expectations for double-digit earnings per share growth over the next 12 months are the highest since August 2021, with 38% of respondents expecting a “boom” in the global economy next year.
Allocation to bonds was at its lowest level since May 2022.
Why BlackRock remains bullish on stocks
BlackRock Investment Institute (BII) strategists said in a note on Tuesday that rising bond yields “raise the bar for returns” but did not break the bank’s pro-risk stance.
“Rising interest rates and strong stock prices don’t have to be contradictory. What matters is what drives yields higher,” they said. “If higher yields reflect stronger investment and growth, the resulting earnings strength can help offset higher costs of capital. This explains why we remain overweight in US equities and AI.”
“We believe AI-related investments can support growth and profits even as the same investment boom absorbs capital, power, and other scarce resources,” they added.
Toni Meadows, head of investments at BRI Wealth Management, told CNBC in an email Tuesday that the “gold rush” psychology around AI means there will come a time when investors “question what future they are investing in.”
He said, “Although the pace of investment in AI data centers and related infrastructure is currently insatiable, bottlenecks exist and the cyclical nature of some of the revenue streams in this space may ultimately render the ‘AI trade’ somewhat vulnerable.”
“At this point, we do not believe that the questions currently being raised will derail the story, even if there is a period of consideration and readjustment. AI trading will experience a series of pauses. Whether we develop a deeper decline will depend on the extent to which investors are concerned about return on investment, financing of expenditures, and the cyclicality of returns in some areas.”
Tej Stankhiya, senior investment analyst for impact investing at Federated Hermes, told CNBC that the recent decline in AI has created a buying opportunity for long-term investors.
“It’s difficult to predict how long this (volatility) will last, as the market’s short-term risk appetite is heavily influenced by top-down macros (interest rates, oil, geopolitics, etc.), and the trend has been less benign in recent days and weeks,” he said in an email.
“Building AI data centers is limited in capacity by access to critical semiconductor wafers and power, and there is no sign that these bottlenecks will ease in the near term,” he said.
Mark Hefele, chief investment officer at UBS Global Wealth Management, said in a note Tuesday morning that the key question for investors is not whether frontier development will slow, but whether AI demand and monetization will continue to grow.
“We believe the answer is still yes,” he said. “We continue to support a diversified approach across the AI value chain that combines infrastructure beneficiaries (semiconductor, networking, power, cloud, etc.) with large platform and software companies that are positioned to monetize deployment.”
“Strengthening AI safeguards could reshape competition, but the proposals so far do not provide certainty that the AI capital investment cycle is coming to an end,” Hefele added.
