Top of main content

Investment Outlook: HSBC Perspectives Q3 2026

21 May 2026

Willem Sels

Global Chief Investment Officer HSBC Private Bank and Premier Wealth

The new investment trifecta: AI, energy and defence

The first half of the year has been a decidedly bumpy ride, dominated by the devastating conflict in the Middle East, which has driven up energy prices and disrupted supply chains. Yet earnings growth has continued to march higher, led by the US technology sector and the benefits of innovation. In this fastmoving landscape, our multi-asset, diversified approach continues to serve us well.

While the full impact of the conflict on the global economy is yet to become clear, ceasefire negotiations have shifted investors’ focus back to the long-term structural trends that are reshaping our future, reinforcing our optimism for Q3 and beyond.

What does this mean for investors?

We’ve been through many periods of uncertainty in the recent past. A key difference from the COVID-19 pandemic, the Russia-Ukraine war and the shift in US tariff policies is that governments and businesses have taken steps to diversify their trade relationships and build more robust systems. Therefore, while we believe volatility will linger, it should remain manageable. The global economy is more resilient than many people fear.

This resilience allows us to look beyond short-term uncertainty and focus on long-term structural opportunities, supported by three strategic investment pillars: AI, energy and defence, which steer our four investment themes for the coming quarter.

Clearly, the AI story will continue to fuel earnings expectations across sectors and markets, driven by strong capex trends and productivity gains. The build-out of digital infrastructure and AI development are driving global capital not only into Technology, but also into a number of other sectors and key themes that benefit from it, including Industrials and Materials.

The Middle East conflict is adding to the case for diversified energy sources and national defence spending, and we can see some differentiation between winners and losers from elevated energy prices. We therefore maintain our overweight on energy stocks across regions and our underweight on the global consumer discretionary and staples sectors. Some oil-importing markets, such as India and Indonesia, are now less preferred. 

One thing the three pillars have in common is that they all require substantial funding and government support, creating new jobs and driving capital market activity in both public and private markets. This also helps offset fears of reduced employment caused by automation.

Positioning for portfolio resilience and Asia’s growing momentum

While we’re positioning to benefit from these three structural pillars, preparing for downside risk is equally important and should become routine in investing.

The traditional approach to diversification, relying on low correlations between equities, bonds and gold, didn’t work well during the recent conflict. We see a growing case for adding alternative assets, with infrastructure complementing bonds for income generation, while hedge funds and gold can help dampen market volatility. Meanwhile, with private companies accounting for around 90% of the global corporate universe, the opportunities in private markets are enormous.

While the US remains resilient and continues to attract global investment in its technology sector and broader equity and bond markets, Asia remains a strategic focus in our portfolios for geographical diversification. Technology and innovation are the biggest engines of its stock markets, while total shareholder returns are also improving across a number of markets in the region.

Lastly, as part of our HSBC Think Wealth series, we’re pleased to share insights on risk management from legendary Wall Street investor Howard Marks, Cochairman and Co-founder of Oaktree Capital Management, in our feature article. We also include an article on Asia’s energy challenge and the case for renewables-led resilience, offering further perspectives to consider.

We hope our reflections help you steer a course through today’s turbulence and capture the opportunities that resilience and innovation are already bringing into view.

Investment themes

Key data to watch

Related Insights

The Trump-Xi summit, which was held in Beijing on 14-15 May, concluded as an event with a...[18 May]
Since early April, ceasefire negotiations have led to a rebound in risk appetite. As it...[1 May]
At its April meeting, the Federal Reserve left the federal funds rate unchanged at 3.50%...[30 Apr]
Notes
The above comments reflects a 6-month view (relatively short-term) on asset classes for a tactical asset allocation. For a full listing of HSBC’s house view on asset classes and sectors, please refer to our Investment Monthly issued at the beginning of each month.
    Listening to what you have to say about services matters to us. It's easy to share your ideas, stay informed and join the conversation.