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Standard Chartered Bank has released its global market outlook for 2026, highlighting the role of artificial intelligence (AI) investments and the Gulf region in supporting deal flows and private markets.

The report indicates that the high equity market valuations are largely driven by a surge in AI investments, markedly different from the late-1990s dot-com bubble, particularly in terms of investment scale and profitability of leading companies.

It emphasizes that Gulf sovereign wealth funds play a strategic role in long-term AI investments, providing critical funding for technological infrastructure rather than short-term speculative capital.

Regarding market performance, the bank expects robust gains for high-risk assets in 2026, with continued appreciation across major asset classes. Investors are encouraged to diversify portfolios geographically and across sectors to mitigate risks.

In fixed income, emerging market bonds are forecast to outperform developed market bonds, while gold is expected to continue its upward trend. Investor appetite for certain currencies, including the Japanese yen and Chinese yuan, as well as alternative strategies, is also likely to rise.

The report cautions about four main risks that could affect investment outlooks: potential shocks in equity markets, AI-related disappointments, limits on the Federal Reserve's ability to cut interest rates, and unexpected tightening by the Bank of Japan.