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Advisor Outlook: Key market themes and risks

BlackRock’s Advisor Outlook provides financial professionals context on current market conditions, macro trends, and key investment topics across asset classes.

June Advisor Outlook

Kristy
I’m Kristy Akullian, Head of GPS Investment Strategy, and I’m happy to be here today to walk through our latest Advisor Outlook. May was a strong month for equities – the S&P 500 rallied over 5%, led by AI excitement.

The momentum extended beyond the US, with strong performance from international markets. Korea’s KOSPI Index was up 29% in May, bringing its YTD gains over 100%. 

But while index-level performance was strong, leadership was fairly narrow – just five names accounted for nearly 80% of the S&P 500’s gain in May. Market breadth declined as performance ticked higher.

Faye
And I’m Faye Witherall, an Investment Strategist on the team. Another key story of the month was what didn't happen.

Headlines around the Middle East continued to dominate, but de-escalation hopes saw Brent crude decline over 19%, its biggest monthly fall since March 2020 as the pandemic lockdowns began.

That oil volatility has led to some sharp swings in the Fed’s rate path. In February, futures were pricing in a rate cut as early as July. But as inflation concerns returned to the forefront, markets rapidly scaled back those expectations, and began pricing a meaningful probability that the next move could instead be a hike, even as oil prices come down. 

Kristy
Overall, this is a market backdrop that keeps us still risk-on, and we like leaning into both US equities and select emerging market exposures amid strong earnings growth. We like dynamic factor strategies and favor large cap growth.

But we also acknowledge risks from here – we purposefully fold in diversification allocations like alternative strategies to seek improved portfolio outcomes, especially as stock-bond correlations remain unreliable.

Faye
Check out the full Advisor Outlook for more of our best thinking, and reach out to your local market team or call 877-ASK-1BLK to dive deeper into any of these themes.

GPS0626-5559244-EXP0627

Strong returns, narrow leadership

Index-level performance of U.S. equities has remained strong, though gains have been led by a relatively narrow group of companies, keeping concentration risk in focus.

U.S. Momentum holds

U.S. activity has continued to show signs of resilience, though elevated oil prices could weigh on consumer spending if sustained.

Markets reprice Fed path

Markets have adjusted to a less dovish Fed path, but inflation pressures still appear uneven rather than broad-based.

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To obtain more information on the fund(s) including the Morningstar time period ratings and standardized average annual total returns as of the most recent calendar quarter and current month end, please click on the fund tile. Past performance is not indicative of future results. The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure (excluding any applicable sales charges) that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

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Advisor outlook Q226

The average monthly portfolio asset class breakdown is constructed by the underlying holdings classification. Source: Morningstar, BlackRock, Aladdin. “Advisor models” data is as of 03/31/2026, based on the 961 “moderate” risk cohort models collected by BlackRock in the 3 months ending 03/31/2026. Advisor models collected by BlackRock are grouped into 5 risk cohorts for analysis, based on total equity allocation. Models in the “moderate” risk cohort are defined as any portfolio with an overall equity allocation of between 50-65%. BlackRock’s risk model data is supplemented by asset allocation and fund characteristic data from Morningstar. The portfolios analyzed represent a subset of the industry, and not its entirety. As such, there may be certain biases present in the data that reflect the advisors who choose to work with BlackRock to analyze their portfolios. The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective. 

Portfolios reflect a defensive tilt within equities

Advisor allocations skew toward industrials, real estate, energy and utilities, balancing defensive and cyclical exposure amid elevated equity volatility.

Gold adoption signals demand for diversification

Gold appears in 12% of portfolios, with an average allocation of ~3.5%, indicating selective use of commodities within the alternatives sleeve as part of broader diversification.

Emerging markets favored for growth beyond the U.S.

Within non U.S. equities, advisors show a preference for emerging markets, suggesting a targeted approach to accessing growth opportunities while maintaining a U.S. home bias.

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Frequently asked questions

  • BlackRock’s Advisor Portfolio Insights analyze ~1,000 real advisor portfolios every quarter, examining asset allocation, risk and costs. Explore polling insights, key trends and identify potential areas for portfolio review in the Advisor Portfolio Insights Deck.

  • The Advisor Outlook is a monthly market resource for advisors. Each edition includes a short video from BlackRock strategists, 2–3 key market takeaways, advisor positioning insights and curated investments ideas aligned to that month's themes. It is designed to help advisors understand current market conditions and risks and opportunities for their clients.

  • The Advisor Outlook is built specifically for advisors. It is different because it:

    • Updates monthly (vs. many quarterly outlooks)
    • Frames insights around client conversations
    • Connects themes to portfolio positioning and investment ideas
    • Is designed to be consumed in under 10 minutes

  • The Advisor Outlook is designed primarily for advisor preparation, not direct client use. For client-ready content, use Student of the Market (downloadable and customizable slides built for sharing) or Investment Directions (triannual PDF). Use Advisor Outlook to inform your client conversations and see how other advisors are positioning for today’s markets.