Stocks Ignore the War, EM Debt Offers Value

Nuveen’s CIO commentary highlights a striking divergence: equities pushed to fresh highs despite war risk, while fixed income and emerging markets now offer more attractive relative value. 

• The S&P 500 hit new all-time highs after recovering from a -4.3% Q1 decline.
• Strong earnings, easing fears of escalation, and renewed AI optimism helped markets look through the Iran shock.
• Nuveen sees emerging markets debt as a favored allocation after Q1 weakness widened spreads and improved yields.
• EM high-yield sovereign default expectations for 2026 are below 1%, well under historical averages.

Their message is subtle: while headlines chase equities, the more interesting value may now sit in overlooked bond markets.