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Investment Monthly: Structural trends underpin equity market resilience

1 October 2026

Willem Sels

Global Chief Investment Officer, HSBC Private Bank and Premier Wealth

Lucia Ku

Global Head of Wealth Insights, HSBC International Wealth and Premier Banking 

Key takeaways

  • Historically, US midterm elections often lead to some volatility, but markets have proven resilient, thanks to structural trends broadening earnings growth. We favour US equities across IT, Communications, Materials, Industrials, Financials and Energy, and complement our broad-based equity exposure with quality bonds and infrastructure for income, as well as alternative assets, whenever appropriate, for diversification.
  • The Fed reiterated its commitment to tackling inflation, which helps improve its credibility. While the hawkish messaging led markets to price in three further hikes by June 2027, we expect one more hike this year. US Treasury yields may have peaked and offer fair value. With limited near-term catalysts for significant spread widening, we favour DM corporate investment grade bonds with 5-7-year duration, where yields remain attractive.
  • In Asia, China’s growth outlook remains K-shaped, with strong technology and exports but sluggish consumption and investment. Equity market performance is also mixed, depending on the sector composition of indices. We move mainland Chinese equities to neutral, balancing innovation with high-quality dividend stocks. Hong Kong equities are backed by robust liquidity inflows, increased IPO listings, improving residential property activity and supportive policies. Strong AI momentum also helps drive earnings growth in Japan, South Korea and Singapore. We upgrade Asian high yield to overweight due to improved valuations, shorter duration risk and additional spread premium.

Talking Points

Each month, we discuss 3 key issues facing investors

Asset Class Views

Our latest house view on various asset classes

Sector Views

Global and regional sector views based on a 6-month horizon

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