In the midst of macroeconomic and geopolitical uncertainty, Barclays Private Bank believes there are still a number of bright spots for investors in 2026, including expectations of a continued run for artificial intelligence.
The macroeconomic environment is expected to remain uncertain throughout 2026 with geopolitics being a major headline concern. While the Middle East conflict has seemingly turned the corner with ongoing efforts to seek a peace deal, there is always the possibility of negative surprises, including the latest threat by President Donald Trump to launch fresh attacks in a social media post that demanded that “Iran must immediately stop their highly paid proxies in Lebanon from causing trouble”.
Given this lack of clarity, “diversification and selectivity remain paramount” for investors, according to Barclays Private Bank’s 2026 mid-year outlook.
Central scenario
The bank’s house view is anchored around a central scenario that involves several key tenets.
On the reopening of the Strait of Hormuz, Barclays said that traffic may not return to pre-conflict levels immediately, but the improvement should be sufficient for markets to move on. It expects the inflation shock to be temporary, lasting for a few months or quarters with the broader trajectory pointing to lower interest rates. It sees a continued run for artificial intelligence (AI), albeit with a narrative shift as hyperscalers’ spending begins to normalise. And it believe markets are shaped by multiple “power struggles” including US midterm elections, ongoing geopolitical flashpoints, K-shaped economies and markets and growing constraints, such as access to energy.
“As such, we expect US growth to slow but stay resilient, while the eurozone and the UK continue to muddle through. This macroeconomic context keeps us invested in both the short and the long run, but will require portfolios to adapt, potentially substantially, with the news flow,” the bank added.
Three themes for portfolios
Under such assumptions, Barclays Private Bank has suggested investors to focus on three themes.
First, take advantage of elevated yields with crossover credit and ‘active’ carry strategies to high yield. The bank also prefers modest duration extension to euro portfolios once the current inflation wave passes and tactical buying opportunities on dips for long-end gilt yields.
Second, ride the AI momentum with greater selectivity by owning monetisers and executors rather than just the exposed. The bank favours technology, healthcare, and energy at the sector level. It is also positive on emerging markets, particularly AI supply-chain-exposed Asia, as well as strategic autonomy as a cross-sector theme, from defence and semiconductors to grid infrastructure and cybersecurity.
Third, ensuring portfolio resilience with diversification beyond geography and traditional asset classes, such as hedge funds and commodities.
“After six months that have seen the largest strangling of oil supplies, triggering an energy shock, the rest of the year will see the effects of this filtering through to the global economy,” the bank noted.
