A key headline risk this month is the escalation involving the U.S. and Iran. The concern isn’t just geopolitics; it’s the knock-on effect: crude oil has broken above the 70 level and is holding there, and supply chain disruptions (freight routes, flight suspensions, regional retaliation risk) can keep energy prices elevated.
Why it matters:
When energy rises and stays elevated, inflation can become stickier, which can influence interest-rate decisions and risk sentiment across markets.
Nvidia delivered strong earnings, yet we saw signs of “sell-on-good-news” behavior. That tells us something important: investors aren’t only reacting to results today, they’re weighing whether AI capex can remain sustainable into 2027 and beyond.
The biggest question isn’t Nvidia’s performance alone. It’s whether the largest AI spenders (the hyperscalers) can keep deploying at the same pace without pressuring their own financial health.
What to watch:
A major theme in Q1 2026: markets are nervous about AI disruption, especially as we move deeper into agentic AI (AI tools that can “do work,” not just answer questions).
This has contributed to a broad sell-off across software names, even in areas where AI is more likely to be an enhancer than a replacement.
Here’s the opportunity angle:
Markets can be irrational in the short term. When fear rises, good businesses often get sold together with weaker ones. That can create “better valuation zones”, if you know how to separate quality from noise.
The smarter question isn’t:
“Should we avoid software?”
It’s:
“Which software is resilient, mission-critical, and harder to replace?”
The U.S. court ruling affected certain tariffs under emergency powers, but not all tariffs. A temporary “Plan B” was introduced (including a global tariff framework to buy time), while other categories (including some semiconductors/electronics-related measures) still proceed under different legal sections.
Market reaction was relatively muted, suggesting portions may already be priced in. For now, the bigger movers remain geopolitics + AI uncertainty + central bank direction.
A major macro variable: a new Fed Chair, Kevin Walsh, is expected to take office in May 2026. Market perception so far leans “hawkish,” meaning investors believe he may prefer tighter monetary conditions.
But it’s still early. The real signal will come from how he communicates once in office.
Why this matters now:
If oil stays high and inflation remains sticky, rate-cut expectations could be delayed, and that can affect valuations, especially in higher-multiple sectors.
When we zoom out to 10-year performance, the U.S. remains the most consistent market among the major indices tracked, but in early 2026, we’re seeing sideways consolidation, especially in the tech-heavy index.
That’s not automatically bearish. Sideways movement can simply reflect:
Interestingly, the broader U.S. market (S&P500) has looked relatively stronger than pure tech recently, hinting that money may be rotating toward areas like staples, energy, and other defensives.
China’s market has pockets of strength tied to its own AI ecosystem, but it remains more sensitive to:
Hong Kong shows similar characteristics, often influenced by both China and global risk sentiment.
These markets can offer opportunity, but generally suit more experienced investors who understand the unique risk profile.
Malaysia’s index performance has been more muted over the longer term, though there are still strong companies and themes (including data center spillovers). As always, the approach matters: selective, systematic, and risk-managed, especially in a market that can move sideways for extended periods.
One of the most telling macro charts is money market funds: cash on the sidelines continues to grow.
Two key drivers:
This matters because large cash balances can delay risk-taking. It can also create sharp rotations when conditions change, especially if inflation cools and rate cuts become clearer.
Even with uncertainty high, opportunity doesn’t disappear, it shifts.
Here are several areas highlighted in the update:
In periods of geopolitical tension and inflation uncertainty, precious metals (like gold) often regain attention, not as a “get rich quick” trade, but as a potential stabilizer/hedge in a portfolio mix.
Themes like copper, silver, and rare earths remain relevant due to:
Shortages don’t resolve quickly, and that creates longer-cycle themes worth tracking.
AI and data centers are power-hungry. The U.S. power infrastructure challenge remains a key long-term theme, and it can create opportunities across the ecosystem (utilities, grid, storage, related industrial supply chains).
A sell-off driven by fear can create bargains, but only if you can distinguish:
When markets get noisy, two things become true at once:
The difference is whether you approach the market with impulse… or with a system.
That’s why we always come back to the same foundation:
Manage risk first, stay systematic, and focus on quality.
In periods of heightened market uncertainty, decision-making becomes increasingly complex. Rapid price movements, shifting macroeconomic conditions, and constant news flow create an environment where hesitation is not only common but often perceived as a form of prudence. However, one of the most overlooked risks in trading is not poor decision-making, but the absence of decision-making
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