Markets and Geopolitical Swings | Bloomberg Surveillance

Geopolitical swings, firmer oil, and a more hawkish Fed backdrop pushed the conversation toward a more volatile summer for markets. A guest strategist argued that the latest jump in energy prices complicates the case for a calm second half, even as she still expects continued earnings strength and prefers the short end of the Treasury curve. She also said investors are likely to keep debating whether the big AI winners remain the chip stocks or rotate into software and other lagging parts of tech.

The discussion on software split the sector into application names and infrastructure software. The guest said investors should focus on the companies enabling AI systems, citing data observability and network infrastructure names as the most direct beneficiaries. She argued that the market is underestimating how much operational complexity AI introduces, which should support cybersecurity, monitoring, and cloud infrastructure vendors.

Another guest made the case that the real buildout story is in the Midwest, especially Ohio, where data centers, power, water, and waste systems are drawing capital. He said infrastructure offers steadier, downside-protected returns than the most crowded AI trades, while environmental services remain constrained by permitting issues. A currency strategist then said the dollar is strengthening on relative U.S. growth, higher rates, and tighter global liquidity, with DXY potentially reaching 103 and dollar-yen testing 165.