Morningstar Markets Observer Q2

Morningstar

Zachary Evens

Research

51 Pages

Morningstar reviews a volatile Q2 2026 market setup shaped by Iran related oil shocks, AI uncertainty, inflation pressure, and uneven asset class returns. Commodities gained 32% over the trailing 12 months, while US population growth is projected to slow sharply through 2030.

Key Takeaways

Oil Shock Matters: WTI oil prices are expected to rise 27% in 2026, adding 0.65 percentage points to US inflation through PCE.
Commodities Led Markets: Commodities gained 32.1% over the trailing 12 months, ahead of emerging markets stocks at 26.8% and US stocks at 17.4%.
Rates Stay Restrictive: Morningstar expects no Fed cuts in 2026, followed by 1.25 percentage points of cumulative easing over 2027 and 2028.
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