Investment Monthly: Positive outlook remains amid tech sell-off and new tariffs

Key takeaways

The recent market sell-off was triggered by concerns that incumbent software companies could be replaced by AI start-ups. We believe these fears are exaggerated, as these companies are also well positioned to benefit from AI for greater efficiency. The investor rotation from IT to other sectors broadens opportunities in industrials, materials and utilities. A multi-asset solution will help diversify across asset classes, sectors, markets and currencies.

While the US Supreme Court limited the use of IEEPA, the administration quickly responded with a 15% global tariff using Section 122. Import-reliant sectors may benefit from lower near-term cost pressures and reduced legal uncertainty. Overall, resilient US growth, solid earnings and continued AI momentum support our bullish view on US equities, while total tariff revenue is expected to remain stable in 2026, which is also positive for bonds. We favour US investment grade credit over high yield.

We assess the potential market impact under different scenarios in the Middle East. Continued strikes across several countries would increase oil and gold prices, while putting pressure on European economies, emerging-market oil importers and cyclical sectors. Conversely, these market segments would benefit if tensions ease. Although gold prices may decline in this scenario, gold is expected to remain a key diversifier. Solid earnings growth across sectors and regions supports our market optimism. Outside the US, Asia sees the most positive earnings revisions.

https://www.hsbc.com.my/wealth/insights/asset-class-views/investment-monthly/positive-outlook-remains-amid-tech-sell-off-and-new-tariffs/

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Publish Date: Tue, 03 Mar 2026, 07:03 AM

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