NFG Partners ‘On Point’ Market Outlook Q2 2026
Strategic Resilience amid a ‘Shock to the System’
Q1 2026 began with solid growth, AI‑driven productivity and an equity market that had delivered well for investors. It ended in a very different place. The outbreak of military conflict involving the US, Israel and Iran, and the resulting shock to energy markets, marked a clear turning point for markets and tested the resilience that characterised 2025.
While the constructive conditions entering the year have not evaporated, they are being tested. Rising oil prices, a stronger US dollar and higher‑for‑longer interest rates represent a meaningful headwind for growth and a more complicated backdrop for policy makers. In this environment, separating signal from noise, and responding to evidence rather than headlines, matters more than ever.
In our Q2 2026 Market Outlook, we set out how our evidence‑based process led us to de‑risk portfolios, rotate within asset classes and adopt a more defensive posture ahead of deteriorating market conditions. We also explore the behavioural challenges investors face during periods of stress, the implications of rising AI‑related concentration, and where selective opportunities are emerging despite heightened uncertainty.