Media365
With US equities regaining momentum amid easing tensions in the Middle East, questions are being raised as to whether global capital is rotating back into the world’s largest market.
Investment advisers and fund managers said global investors were reassessing their asset allocations, though there was little evidence of a broad capital rotation away from Asia.
While market performance suggested some reallocation, flow data remained inconclusive and did not point to a decisive shift away from Asia, according to Aaron Costello, head of Asia investment strategy at Cambridge Associates. The Boston-based investment firm had US$667 billion under advisement or management at the end of December.
“Non-US equities broadly outperformed last year, particularly into early 2026, but that reversed in March as geopolitical tensions in the Middle East escalated,” he said in a recent interview with the South China Morning Post. “So US equities began to outperform.”
On May 6, US stocks hit an all-time high, driven by an artificial-intelligence-fuelled rally, strong corporate earnings and optimism regarding a potential ceasefire in the US-Israel war on Iran. The S&P 500 closed above 7,300 for the first time.
This followed a strong rally in April, with US stocks recovering from volatility triggered by escalating concerns over the Iran conflict and rising oil prices. The S&P 500 index rose about 10.4 per cent during the month, the most since November 2020, while the Nasdaq Composite Index surged 15.3 per cent, marking its biggest monthly advance since April 2020.
