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Global Asset Allocation Viewpoints

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

February 2026

Outlook

We maintain a balanced stance across global risk assets. Though valuations are extended, earnings momentum and economic growth remain favorable, underpinned by still-accommodative fiscal policies across most regions.
U.S. economic growth remains resilient fueled by AI-driven capital spending and supportive fiscal and monetary policies, although labor market data continues to reflect a softening.
Markets outside the U.S. continue to benefit from improving fundamentals, supported by fiscal spending, notably in Europe and Japan.
Key risks to global markets include any threat to AI-driven growth, sticky inflation, a sharper-than-expected deterioration in labor markets, shifting policy expectations, and persistent geopolitical tensions.

The Asset Allocation Committee at T. Rowe Price maintains a balanced stance across global risk assets, favoring equities and cash over bonds amid resilient economic growth, especially in the U.S., driven by AI-related capital spending and supportive fiscal policies. While U.S. labor market data shows some softening, international markets—particularly Europe and Japan—benefit from improving fundamentals and fiscal spending. Key risks include potential threats to AI-driven growth, sticky inflation, labor market deterioration, shifting policy expectations, and geopolitical tensions. Tactical portfolio positioning reflects overweight exposures to small-cap equities, emerging market bonds, and cash, while maintaining underweight allocations to bonds and U.S. large-cap stocks, given extended valuations and possible upward pressure on yields. The outlook stresses selectivity, especially in technology, as investors become more cautious about AI-related capital expenditures. The Committee's views are informed by a 6- to 18-month horizon and are not investment recommendations. Investors are encouraged to seek independent advice and consult relevant disclosures before making decisions.

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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.

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USA: T. Rowe Price Associates, Inc. © 2025 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.

202602-5201133

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