BlackRock Turns More Positive on U.S. Stocks
Asset management giant BlackRock has upgraded its outlook for U.S. equities, pointing to limited fallout from the Iran conflict and improving corporate earnings expectations. The firm’s latest positioning reflects growing confidence in market resilience despite geopolitical tensions.
Rating Upgrade to Overweight
Managing approximately $14 trillion in assets, BlackRock confirmed in its weekly market note that it has lifted U.S. stocks to an “overweight” rating from “neutral.” This shift signals a renewed willingness to take on risk after a more cautious stance in recent weeks.
War Impact Seen as Contained
According to BlackRock strategists, the possibility of a sustained ceasefire has reduced concerns about prolonged economic disruption. The firm had previously trimmed risk exposure due to the conflict but now believes the broader impact will remain manageable.
The team highlighted two key developments behind this decision: clear signs that shipping activity through the Strait of Hormuz could normalize, and stronger visibility that any macroeconomic damage will stay limited.
Earnings Outlook Strengthens
BlackRock also emphasized that corporate earnings expectations have continued to improve for both U.S. and emerging markets heading into 2026. Notably, these projections have risen even after the conflict began in late February.
As the earnings season begins, S&P 500 companies are forecast to deliver a 12.6% increase in first-quarter profits, according to FactSet. If companies outperform at typical historical rates, growth could climb closer to 19%.
Technology Sector Valuations in Focus
The technology sector is expected to lead profit growth, with earnings projected to surge by 45% this year. Despite this strong outlook, tech stocks have recorded only modest gains so far, pushing their relative valuation compared to other sectors to the lowest level since mid-2020.
Strategy: Re-Adding Risk with Select Opportunities
BlackRock reiterated its decision to increase exposure to both U.S. and emerging market equities, driven by strong earnings expectations and limited damage to global growth.
The firm noted that profit margins will be a key focus during the current earnings season, while also highlighting continued interest in thematic sectors such as defense.
Portfolio Positioning
Currently, U.S. and emerging market equities remain the only segments where BlackRock maintains an overweight stance within its broader portfolio.
