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Global Asset Allocation Viewpoints

Read our committee’s tactical views, positioning, risks, and opportunities across global assets.

May 2026

Outlook
  • Markets have remained largely resilient despite ongoing geopolitical tensions continuing to threaten higher inflation and weigh on growth, leading us to modestly trim several more cyclical exposures.
  • The global economy continues to show pockets of resilience, supported by a steady consumer, fiscal spending, and ongoing investment, particularly in AI, though growth is moderating and becoming more uneven across regions.
  • Monetary policy remains steady with central banks largely in a holding pattern as they assess the path of inflation, while near term inflation pressures persist in some areas, longer-term expectations remain relatively contained.
  • Key risks include a further escalation in geopolitical tensions, renewed inflationary pressures, greater reliance on a narrow set of growth drivers, potential labor market deterioration, and emerging liquidity concerns in parts of private markets.

Global geopolitical tensions, inflation risks, and uneven growth are complicating today’s market backdrop. Yet resilient consumers, fiscal support, and continued AI investment are helping sustain pockets of strength. This perspective examines how those crosscurrents are shaping asset allocation, regional equity views, and fixed income positioning, with an emphasis on practical portfolio implications rather than broad market forecasts. It highlights stronger U.S. earnings momentum, AI leadership, and energy insulation, while also warning that inflation may be a market blind spot if energy disruptions persist. The result is a timely, balanced analysis for investors seeking clarity on risks, resilience, and selective opportunities across markets.


 

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IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a guarantee or a reliable indicator of future results.

This information is not intended to reflect a current or past recommendation concerning investments, investment strategies, or account types, advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Please consider your own circumstances before making an investment decision.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

Risks: All investments are subject to risk, including possible loss of principal. Stock prices can fall because of weakness in the broad market, a particular industry, or specific holdings. Fixed-income securities are subject to credit risk, liquidity risk, call risk, and interest- rate risk. As interest rates rise, bond prices generally fall. Diversification does not assure a profit or protect against a loss in a declining market.

USA—Issued in the USA by T. Rowe Price Investment Services, Inc., distributor and T. Rowe Price Associates, Inc., investment adviser, 1307 Point Street, Baltimore, MD 21231, which are regulated by the Financial Industry Regulatory Authority and the U.S. Securities and Exchange Commission, respectively.

© 2026 T. Rowe Price. All Rights Reserved. T. Rowe Price, INVEST WITH CONFIDENCE, the Bighorn Sheep design, and related indicators (see troweprice.com/ip) are trademarks of T. Rowe Price Group, Inc. All other trademarks are the property of their respective owners. Use does not imply endorsement, sponsorship, or affiliation of T. Rowe Price with any of the trademark owners.

202605-5478569

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