Dubai, UAE — Standard Chartered expects global equities to extend gains through the second half of 2026, supported by a soft-landing global economy, although investors will need to navigate a more complex backdrop shaped by energy prices, central bank policy and market positioning.
The bank’s Wealth Solutions Chief Investment Office (CIO) said in its Global Market Outlook for the second half of 2026 that investors in the UAE and wider Middle East were entering the second half of the year from a position of relative strength, helped by resilient regional fundamentals, stable oil prices and easing geopolitical risk premiums following the interim U.S.-Iran agreement.
The outlook was presented during events in Dubai and Abu Dhabi this week, marking the bank’s first regional launch of its second-half market outlook.
Equities remain preferred asset class
The bank remains overweight global equities, favouring U.S. stocks and Asia excluding Japan, while also identifying selective opportunities in fixed income and alternative assets.
Its CIO team forecasts the U.S. S&P 500 index could reach 7,950 by mid-2027, while gold could rise to $5,100 an ounce over the same period.
The forecasts reflect the bank’s view that equities will continue to serve as a key driver of portfolio growth, while gold remains an important diversification and hedging tool.
Global equities have gained more than 12% so far this year, supported by strong corporate earnings and optimism surrounding artificial intelligence, despite higher oil prices, elevated bond yields and geopolitical tensions.
Four key market challenges
While the bank expects the rally to continue, it warned investors will need to adapt as markets respond to four major factors: energy prices, equity supply, investor positioning and central bank policy.
These variables are expected to play a greater role in determining market performance in the months ahead as policymakers balance inflation concerns against growth objectives.
Middle East outlook supported by oil market stability
For investors in the Gulf region, oil market developments remain particularly significant.
Standard Chartered said the interim agreement between Washington and Tehran could gradually ease supply constraints and reduce geopolitical risk premiums. However, it cautioned that the recovery in physical oil flows and rebuilding of inventories would likely take time, preventing energy prices from quickly returning to levels seen at the start of the year.
The bank said this environment was expected to support investor sentiment while continuing to create opportunities across asset classes.
Demand for diversification
Ayesha Abbas, managing director and head of Affluent and Wealth Solutions for Europe, the Middle East, Africa and the UAE, said clients were increasingly seeking diversified portfolios combining growth and income.
She said demand remained strong for global equities, emerging-market dollar-denominated bonds and gold as investors positioned for evolving market conditions.
“For internationally minded clients in the UAE, staying invested and well-diversified will be key to capturing opportunities as markets evolve,” Abbas said.
