In recent months, financial markets have demonstrated remarkable resilience, continuing to rise despite an environment characterized by still‑high interest rates, volatile energy prices and a geopolitical backdrop that remains far from stabilized. This apparent paradox can be explained by a combination of factors: macroeconomic data exceeding expectations, solid corporate earnings and, above all, growing enthusiasm surrounding artificial intelligence (AI). A closer analysis, however, suggests that a significant portion of this optimism is already reflected in asset prices.
There is little doubt that AI represents one of the most significant technological revolutions of recent decades, potentially comparable to electricity, the steam engine or the advent of the internet. Investments related to AI — particularly in data centres and digital infrastructure — are providing a meaningful boost to economic growth, most notably in the United States.
That said, the path forward is unlikely to be linear. The scale of current investments is exceptional, while the economic returns remain, at least in part, uncertain. The risk of overcapacity, intensifying global competition — especially between the United States and China — increasing regulation and rising energy requirements are all factors that could limit long‑term profitability. Moreover, while productivity gains are widely anticipated, they are likely to materialize only over the medium to long term, once the capacity currently under construction is fully deployed.
A second key factor is the trajectory of energy prices, which remains heavily influenced by tensions in the Middle East and by uncertainty surrounding the Strait of Hormuz. Markets appear to be pricing in a swift geopolitical normalization. A more cautious assessment, however, suggests that an intermediate scenario is more likely.
In such a context, oil prices could continue to fluctuate within a relatively wide range, roughly between USD 90 and USD 120 per barrel. While this would not be sufficient to derail global growth, it would represent a persistent source of upward pressure on inflation and interest rates. The main risk lies in so‑called second‑round effects — namely, the pass‑through of higher energy costs into consumer prices and, potentially, wages.
Faced with this complex mix of opposing forces, major central banks are maintaining a prudent stance. Both the Federal Reserve and the European Central Bank appear inclined to adopt a wait‑and‑see approach in the short term, pending clearer signals on the evolution of inflation and economic growth.
Over the medium to long term, however, the outlook becomes more challenging. In addition to potentially persistent inflationary pressures, structurally elevated public deficits and rising interest servicing costs weigh on the policy landscape. In this environment, renewed upward pressure on interest rates is expected over time, particularly at the long end of the yield curve.
The global economy remains resilient, yet vulnerable to energy, geopolitical and financial shocks. In an environment where much of the good news is already priced in, long‑term value creation will depend less on precise forecasting and more on discipline, diversification and active, risk‑aware portfolio management. In other words, navigating uncertainty will matter more than chasing short‑term market euphoria.
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