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Consumer Sectors Have Been the Missing Piece of This Year’s Rally

JPMorgan believes some of the market’s weakest consumer-related sectors may offer attractive opportunities as investors look ahead to the second half of 2026.

Strategist Mislav Matejka noted that while financials, industrials and technology stocks have all benefited from supportive macroeconomic themes, consumer cyclicals have largely been left behind.

As a result, many consumer stocks are now trading at depressed relative levels after years of underperformance following the post-pandemic recovery.

Low Valuations and Weak Sentiment Often Mark Turning Points

The bank argued that current market conditions resemble previous periods that have preceded strong recoveries in consumer-focused equities.

Many stocks in the sector are trading at relatively low valuations, while consumer confidence surveys in numerous markets remain near historic lows.

Historically, JPMorgan noted, consumer stocks have often begun outperforming when sentiment is weakest and expectations are already heavily discounted.

Lower Oil Prices Could Help Consumers

One of the most important potential catalysts identified by the bank is the decline in energy prices.

Brent crude has fallen roughly 25% from the previous quarter, which could help boost household purchasing power while easing inflation pressures.

JPMorgan believes lower energy costs could also give central banks more flexibility, creating a more supportive backdrop for consumer spending.

Additional positives include lower tariffs and the possibility of consumer-focused policy initiatives ahead of U.S. midterm elections.

Travel, Luxury and Retail Stand Out

Among consumer sectors, JPMorgan sees the greatest opportunity in luxury goods, airlines, hotels, travel and leisure businesses, and retail companies.

The bank believes these areas could respond particularly well if confidence and spending trends improve during the second half of the year.

Caution Remains Around Automakers

The automotive sector remains JPMorgan’s least-favored consumer industry due to ongoing structural challenges.

Even so, the bank acknowledged that recent weakness has become increasingly extreme, suggesting the group may eventually attract value-oriented investors if sentiment begins to stabilize.

Gold Pullback Creates Value Opportunity

Bank of America believes gold mining shares offer attractive value despite recent weakness in bullion prices, arguing that equity valuations are implying a much lower gold price environment than currently exists.

The precious metal has fallen roughly 17% since tensions with Iran escalated, ending last week near $4,156 per ounce after a short-lived recovery tied to diplomatic developments between Washington and Tehran.

Gold has also come under pressure from the Federal Reserve’s decision to keep rates at 3.50%-3.75% while maintaining a hawkish stance that has strengthened both the U.S. dollar and Treasury yields.

While BofA acknowledges that “the shift away from inflationary cuts toward tighter policy is a headwind for gold,” it believes broader macro trends, including ongoing fiscal imbalances and reserve diversification away from the dollar, remain supportive.

Mining Stocks Reflect Lower Gold Assumptions

The bank’s analysis suggests that investors are valuing many gold producers as though bullion were trading substantially below current market levels.

Based on price-to-net-asset-value calculations, the average implied gold price across BofA’s coverage universe is $3,354 per ounce, nearly 20% below spot prices.

Under an EV/EBITDA framework, the implied gold price rises to $4,016 per ounce, though it still remains below prevailing market levels.

Wheaton Precious Metals carries the most optimistic implied gold assumption at $4,395 per ounce, while Franco-Nevada reflects the most conservative estimate at $2,416 per ounce.

Central Bank Demand Remains a Key Driver

BofA also highlighted continued demand from central banks as an important support for gold prices.

According to the World Gold Council’s latest survey, 89% of responding central banks expect global gold reserves to increase over the next year, while 45% intend to expand their own holdings.

Emerging-market central banks remain particularly active buyers, reinforcing the long-term demand outlook.

“The survey’s results support our constructive view on gold, and we expect CB purchases to continue to support gold prices in the near term,” the analysts said.

Alamos Gold Remains a Preferred Name

Although BofA reduced its target price for Alamos Gold (NYSE:AGI) following a production guidance cut tied to seismic disruptions at the Young-Davidson mine, it maintained its Buy rating.

The bank argued that the stock’s 18.4% decline was disproportionate to the impact on overall asset value and highlighted future growth opportunities from the company’s Island Gold and Lynn Lake developments.

As a result, BofA continues to see attractive upside potential despite the near-term operational setback.

Goldman Sachs expects U.S. inflation to stay above target through 2026 before moving closer to the Federal Reserve’s objective in 2027, helped by easing energy costs and a reduction in AI-related pricing distortions.

According to analyst Manuel Abecasis, core PCE inflation is projected to reach 3.2% year-over-year by December 2026 before falling to 2.2% a year later “as the AI and energy effects wane.”

The bank also expects core CPI inflation, which it says is “less affected by AI measurement issues and stock market swings,” to slow from 2.6% at the end of 2026 to 2.2% by December 2027.

U.S.-Iran Deal Supports Lower Oil Outlook

Goldman said recent diplomatic progress between Washington and Tehran has reduced near-term inflation pressures by improving the outlook for energy markets.

The bank lowered its forecast for average oil prices to $80 per barrel in the fourth quarter of 2026 and $75 per barrel in 2027. Those revisions are expected to reduce upward pressure on both headline and core PCE inflation relative to previous assumptions.

For June, Goldman’s preliminary estimates point to a 0.13% monthly decline in headline CPI and a 0.07% increase in headline PCE.

AI-Related Inflation Impact Expected to Moderate

The bank highlighted memory-chip pricing as an overlooked contributor to recent inflation data, particularly through its impact on software and computer-related categories.

Goldman believes these effects should gradually diminish, with monthly inflation in software and accessories slowing from roughly 4%–5% recently to about 0.6% by late 2026.

Housing and Wage Trends Offer Additional Relief

Goldman remains constructive on broader inflation dynamics, expecting rent inflation to cool below pre-pandemic trends while slower wage growth helps reduce inflation in core services outside housing.

However, the bank cautioned that upside risks remain.

Goldman said inflation risks remain “skewed to the upside on net, particularly if the situation in the Middle East deteriorates.”

Barclays has lifted its year-end target for the S&P 500 to 7,800 from 7,650 and unveiled an initial 2027 forecast of 8,800, citing stronger earnings expectations despite a market environment marked by persistent uncertainty.

The bank acknowledged that investors continue to face several challenges. “Equities remain choppy as peace talks stop and start, and questions linger around AI spend, funding and monetization, higher for longer rates, and consumer strength,” strategists led by Venu Krishna wrote.

Barclays believes the broader backdrop remains supportive for equities. Labour market conditions remain healthy enough to keep recession fears contained, although that strength could also postpone future interest-rate cuts. Rising input costs are another factor to monitor, but analysts said they are not yet severe enough to disrupt economic growth.

As a result, “the balance of risks still leans constructive.”

The bank increased its 2026 S&P 500 earnings-per-share forecast to $337 from $321, implying approximately 21% growth from its estimated $279 in 2025. While still slightly below the consensus forecast of $341, Barclays said the revision reflects stronger first-quarter results, ongoing support from reflationary trends and continued industrial resilience.

Barclays also introduced a preliminary 2027 EPS estimate of $389.

The stronger earnings outlook drove the higher index target, although the bank slightly reduced valuation assumptions. It now assigns a 26x earnings multiple to major technology stocks, down from 27.5x previously, reflecting uncertainty surrounding AI investment levels, financing needs and future monetization.

For the broader market, Barclays applies a blended valuation multiple of 23x projected 2026 earnings.

“The equity bull case remains intact, but earnings and AI capex visibility must do more of the work as Fed support fades and positioning is less able to absorb disappointment,” the strategists wrote.

Among the key risks for the second half are renewed inflationary pressures, a more restrictive Federal Reserve path and signs that consumer spending could weaken.

Barclays remains optimistic about AI-related investment, forecasting hyperscaler capital expenditures will exceed $1.1 trillion by 2028. However, analysts warned that “a growing mismatch between internally generated cash flow and projected capital requirements” could become a concern.

On sector allocation, the bank downgraded Financials to Neutral, while upgrading Healthcare to Neutral. It continues to favour TMT, Industrials and Utilities, while maintaining a Negative stance on Consumer stocks, where it expects higher inflation and slower income growth to create “lagged pressure in 2H.”

Bank of America expects artificial intelligence to dramatically accelerate semiconductor industry growth, helping generate an additional $1 trillion in revenue over the next five years.

“The chip industry took ~50 years to generate its first $1Tn in sales,” analysts led by Vivek Arya said. “We expect AI to help add another $1Tn in just the next five years.”

AI Infrastructure Leads Growth Outlook

According to BofA, AI data centre systems represent the largest opportunity, with the market expected to expand from roughly $273 billion in 2025 to approximately $1.7 trillion by 2030.

The bank also highlighted sustained strength in memory markets, increased demand for semiconductor manufacturing equipment, rising power requirements benefiting analog chipmakers, and growing demand for CPUs capable of supporting agentic AI workloads.

BofA estimates the emerging market for AI-focused server processors could eventually represent a $170 billion opportunity spanning both x86 and ARM architectures.

Semiconductor Revenue Forecast Increased

The firm raised its semiconductor industry forecast to $2.7 trillion by 2030, compared with a previous estimate of $2.3 trillion.

That outlook implies annual growth of roughly 28% from 2025 levels.

Memory remains BofA’s most bullish segment, with analysts projecting nearly 300% growth in 2026.

Equipment Spending Outlook Strengthens

The bank also lifted its forecasts for wafer fabrication equipment spending, now expecting annual investment to reach $250 billion by 2028 and potentially $292 billion by 2030.

The revised outlook reflects growing capital requirements as semiconductor manufacturing becomes increasingly complex and AI demand accelerates.

Price Targets Raised Across the Sector

Micron (NASDAQ:MU) received the largest target increase, rising to $1,500 from $950 as BofA pointed to strong high-bandwidth memory demand and constrained supply.

Applied Materials (NASDAQ:AMAT), Lam Research (NASDAQ:LRCX), KLA Corporation (NASDAQ:KLAC), Marvell (NASDAQ:MRVL), Intel (NASDAQ:INTC), and Credo Technology (NASDAQ:CRDO) also received higher targets as the bank incorporated stronger long-term growth assumptions.

Caution Remains on Axcelis

Axcelis Technologies (NASDAQ:ACLS) was the lone exception.

While BofA raised its target to $156 from $130, it maintained an Underperform rating, arguing that the stock’s valuation already reflects much of the expected benefit from its pending merger with Veeco.

Few phrases have cost investors more money than the belief that market rules have fundamentally changed.

Every major investment boom tends to produce a narrative explaining why traditional valuation metrics no longer matter. Yet history repeatedly shows that while technologies evolve, market behaviour remains remarkably consistent.

Borrowing a line from Taylor Swift’s Hits Different — “It’s different, it’s different this time… catastrophic blues.” — the phrase serves as an apt warning for periods of excessive optimism.

The Dot-Com Era Offers a Familiar Lesson

During the technology bubble of the late 1990s, investors became convinced that the internet had rendered conventional valuation frameworks obsolete.

The technology itself ultimately delivered on its promise, transforming business and society. What investors misjudged was the timeline. It took years for companies to convert technological potential into durable profits, and many failed before reaching that stage.

The result was a painful market correction that left investors facing significant losses despite being broadly correct about the future importance of the internet.

AI Enthusiasm Echoes Past Cycles

Artificial intelligence is now driving a similar wave of optimism.

The technology may prove revolutionary, but investors should remember that transformative innovation does not automatically justify any valuation.

Two enduring principles remain relevant.

First, technological revolutions create both extraordinary winners and spectacular failures.

Second, stock prices eventually reconnect with fundamentals, regardless of how compelling the narrative becomes.

Staying Grounded Matters

Innovation will continue to reshape economies and create new opportunities, but investor psychology remains largely unchanged.

Periods of excitement often encourage excessive risk-taking, while corrections expose unrealistic expectations.

That is why maintaining a disciplined investment process remains critical. A clear financial plan, sensible risk management and attention to valuation can help investors navigate periods of market exuberance without becoming trapped by the belief that this time will somehow be different.

Wishbone Gold Plc (AQSE:WSBN) announced positive gold assay results from its shallow drilling programme at the Red Setter project in Western Australia, with gold mineralisation intersected as shallow as 45 metres.

Ed Mead, WA director: “The gold assay results from the first seven RC drill holes are terrific and a real game changer for Red Setter and the Company. To find gold starting as shallow as 45m is amazing and to see the hole grading [email protected]/t gold that was still in mineralisation is incredible.” Read more

Sulnox Group PLC (AQSE:SNOX) announced a four-year supply agreement with Eastern Pacific Shipping, the largest commercial agreement in the company’s history, expanding fleet deployment from 30 to over 50 vessels.

Ben Richardson, CEO: “Moving from a successful evaluation programme and initial deployment to a major long-term agreement and increased shareholding endorses the value Sulnox Eco continues to deliver in real-world operations. We look forward to continuing to work closely with EPS as we expand adoption across the maritime sector”. Read more

Coinsilium Group Limited (AQSE:COIN) announced its results for the year ended 2025, reporting net assets increasing to £14.6m from £3.2m the prior year. The Group raised approximately £17.1m during the year, and digital asset holdings valued at £11.9m at year end. Read more

Equipmake Holdings PLC (AQSE:EQUIP) announced the appointment of Jason Abbott as Chief Operating Officer. Read more

Cooks Coffee Company Limited (AQSE:COOK) published its Annual Report for the year ended March 2026, reporting revenue up 87% to £5.6m compared to £3.1m in the prior year. Read more

Key Takeaways

• Silver is finding support near the 62.00 area as investors focus increasingly on economic activity rather than Federal Reserve policy.
• Industrial demand linked to manufacturing, infrastructure and electrification remains a major driver of the metal.
• Tomorrow’s GDP and Core PCE reports could provide important clues for silver’s next move.
• Recent weakness reflects broader adjustments in yields, the dollar and commodity positioning rather than deteriorating physical demand.
• Technical indicators suggest selling pressure is easing and market conditions may be stabilizing.

Silver is increasingly carving out its own path following the Federal Reserve’s latest policy decision.

Although both silver and gold remain sensitive to inflation, interest rates and currency movements, silver’s strong industrial component gives it a distinct set of drivers.

As attention shifts away from monetary policy, investors are beginning to focus more heavily on whether economic growth can continue supporting demand from key industrial sectors.

That makes silver uniquely positioned at the intersection of monetary and economic forces.

Economic Data Now Holds the Spotlight

With the Federal Reserve’s latest message already absorbed by markets, investors are turning their attention to incoming economic indicators.

The key issue is no longer what the Fed intends to do, but whether the economy is strong enough to justify current market expectations.

For gold, inflation and real yields remain the dominant influences.

For silver, however, growth expectations play a much larger role.

Industrial production, manufacturing activity and infrastructure spending all contribute to demand for the metal.

As a result, upcoming GDP and Core PCE data could shape silver through both monetary and industrial channels.

Industrial Consumption Remains a Critical Support

Silver’s unique role in the global economy continues to distinguish it from other precious metals.

The metal is heavily used in electronics, renewable energy, power infrastructure and a wide range of manufacturing applications.

This means investor sentiment toward silver is often influenced by expectations for industrial expansion as much as by monetary policy.

Strong growth prospects can support silver prices even when interest rates remain elevated.

On the other hand, weaker manufacturing outlooks can reduce demand expectations and weigh on performance.

Recent trading suggests investors are still trying to determine which of these forces will ultimately dominate.

Dollar Strength Continues to Create Headwinds

The U.S. dollar remains an important variable for silver prices.

Following the Fed meeting, the dollar maintained much of its recent strength, placing pressure on commodity markets.

A stronger dollar raises costs for international buyers and can reduce demand from non-U.S. participants.

Silver therefore faces a balancing act between industrial optimism and monetary tightening.

Until a clearer catalyst emerges, investors appear inclined to remain selective and cautious.

Symphony Environmental Technologies (LSE:SYM) has announced a significant milestone in its transformation journey, reporting a return to net profitability during the first five months of 2026. The result marks an encouraging early validation of the company’s strategic reset, demonstrating that a disciplined focus on operational excellence and higher-quality growth is beginning to produce tangible financial benefits.

Speaking on The Watchlist, CEO Michael Laurier described the achievement as an important step forward following the strategic changes implemented throughout 2025.

Rather than prioritising short-term revenue growth, Symphony focused on improving margin quality, strengthening cost discipline, and enhancing operational stability. The outcome has been a return to profitability compared with the losses recorded during the same period last year, supported by revenue growth, stronger margins, and improved operational leverage.

Importantly, Laurier stressed that the company’s progress is not simply the result of cost-cutting measures.

“This is about building a better quality, more scalable business,” he explained, highlighting improvements in operational execution and cost control, particularly across the Middle East, where restructuring efforts have delivered enhanced efficiency and stronger margin performance.

While acknowledging that further work remains, Laurier believes the early results demonstrate that Symphony’s repositioned business model is beginning to deliver sustainable improvements.

Building the Next Generation of Sustainable Technologies

Alongside improving financial performance, Symphony continues to make significant progress in developing its innovative D2P technology platform, which the company sees as a major future growth engine.

The D2P platform represents a portfolio of advanced plastic technologies designed to make plastics smarter, safer and more sustainable. Rather than being a single product, the platform addresses multiple commercial applications including flame retardancy, advanced insect control, food packaging, agriculture and irrigation.

Several D2P products are now progressing through late-stage customer evaluations, market validation programmes and regulatory approval processes. Laurier revealed that the company has already received encouraging feedback, including repeat commercial orders for its insect control applications.

Although commercial roll-outs remain dependent on customer adoption and, in some cases, regulatory approvals, Symphony believes the technology pipeline is steadily maturing.

“If these products scale as we expect, D2P can become an important contributor to future revenue growth, improved margins and long-term shareholder value,” Laurier said.

A Balanced Strategy for Sustainable Growth

Symphony’s latest update reflects a business executing on two key priorities simultaneously: improving current financial performance while investing in technologies capable of driving long-term growth.

The combination of stronger operational discipline, improving profitability and a growing portfolio of innovative environmental technologies positions the company to capitalise on increasing global demand for sustainable plastic solutions.

While management remains measured in its outlook regarding the pace of commercialisation, the momentum behind both the core business and the D2P platform suggests Symphony Environmental Technologies is entering a promising new phase of its development.

For investors, the latest performance offers encouraging evidence that the company’s strategic transformation is gaining traction, with improved financial resilience today and a potentially significant innovation pipeline for tomorrow.

For more information visit – https://www.symphonyenvironmental.com/

Should the U.S.-Iran agreement remain in place and the Strait of Hormuz reopen successfully, financial markets could continue to enjoy a period of strength, particularly across equities, industrial commodities and precious metals.

Rather than chasing the rally, investors may find it prudent to use any additional gains as an opportunity to increase cash allocations. Although doing so could limit participation in further upside, it would improve portfolio resilience and provide flexibility should markets experience a meaningful pullback later in the year.

Liquidity Is Becoming Less Supportive

A key concern is that global liquidity conditions appear to be deteriorating while inflation remains elevated enough to constrain central bank action.

Most major central banks are either maintaining restrictive monetary policies or continuing to tighten financial conditions. At the same time, signals from gold and cryptocurrency markets have increasingly pointed to a less supportive liquidity backdrop.

Massive Capital Projects Are Absorbing Market Liquidity

Another factor influencing liquidity is the growing shift of capital from financial markets into physical investment projects.

The SpaceX (NASDAQ:SPCX) IPO alone redirected approximately $75 billion from investors to the company, capital that is expected to fund data centres, launch infrastructure and other large-scale projects.

Likewise, major technology companies such as Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Oracle (NYSE:ORCL) and Amazon (NASDAQ:AMZN) are allocating substantial resources toward AI infrastructure rather than stock buybacks.

This trend effectively diverts capital that might otherwise support equity markets.

Risk-Reward Appears Less Attractive

Markets may already be pricing in a highly favourable geopolitical outcome in the Middle East, leaving relatively little room for positive surprises while increasing vulnerability to setbacks.

As a result, the near-term risk-reward balance may be becoming less favourable despite recent market strength.

Industrial Commodities Could Benefit Longer Term

Despite short-term caution, the longer-term outlook for industrial commodities remains constructive.

One potentially significant consequence of the U.S.-Iran memorandum is the proposed creation of a privately funded $300 billion reconstruction and development initiative for Iran.

If executed as planned, the programme could generate substantial demand for industrial materials while supporting deeper economic integration between Iran and global markets.

Supporters argue that increased trade and foreign investment could help lower the probability of future conflict by creating stronger economic incentives for stability and cooperation.