Markets Rotate as AI Disruption Meets Late-Cycle Dynamics

DWS’s quarterly “Investment Traffic Lights” outlook argues that global markets remain supported by economic growth and policy easing, even as sector disruption and geopolitical tensions reshape asset leadership.

• Equity markets are experiencing one of the sharpest rotations since the global financial crisis, with capital shifting from asset-light software toward “HALO” sectors—heavy assets with low technological obsolescence.

• The macro backdrop remains broadly supportive: central banks are expected to ease gradually while global earnings growth stays solid across the U.S., Europe, Japan, and emerging markets.

• Diversification is becoming critical as AI disruption challenges existing business models and reshapes sector valuations.

Which assets benefit most from this transition? The full report explores positioning across equities, fixed income, commodities, and alternatives.