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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.

May Advisor Outlook

Faye
I’m Faye Witherall, and I’m excited to be here today to talk through our latest Advisor Outlook. April was a month of strength: the S&P 500 rallied over 13% from its March 30th low, reversing to reach a new record high even as oil prices continued to grind up.

That resilience has been a story of both macro, and micro, strength:

First, economic growth has held up even amid the geopolitical volatility. We’ve seen upside surprises across most pockets of the economy, encouragingly, March’s CPI data showed headline inflation moving higher on energy prices, rather than a broad-based reacceleration across the basket.

And in recent weeks, we’ve seen earnings come back to the fore: despite April marking the fastest recovery from a 10% correction on record, the strong S&P 500 performance has been outpaced by even stronger earnings. Q1 earnings growth is on track for its strongest growth since late 2021.

That’s a market backdrop that leaves us still risk-on.

Resilient earnings and AI demand keep us optimistic, even as leadership remains narrow. We also continue to like diversifiers like liquid alternatives that can be used to seek improved portfolio outcomes, or commodities, particularly at a time when stock-bond correlations remain unreliable. 

Maxine
Thanks, Faye, for the market backdrop. I’m Maxine, and I’ll spotlight how advisors have been positioning their portfolios.

We’re seeing a continued focus on navigating volatility. You can see that in equity allocations: the longstanding tilt toward value and sectors remains in place.

Within the alternatives sleeve, we see commodities and precious metals as the diversifier of choice in portfolios today, with gold appearing in about 12% of portfolios at an average allocation of roughly 3.5%.

However, polling data has shown appetite for liquid alternatives as portfolio diversifiers, with interest jumping by half since the start of the Middle East conflict in late February.

Overall, this positioning reinforces that focus on diversification as we navigate today’s market backdrop.

Check out the full Advisor Outlook and Advisor Portfolio Insights 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.

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Economic growth remains resilient

Recent CPI data suggests inflation remains uneven, with a higher headline figure driven by energy. U.S. economic activity remains strong, though higher oil prices could begin to weigh on consumers.

Strong earnings results support U.S. equities

We stay constructive on U.S. equities – resilient earnings and AI demand keep us optimistic, even as market leadership remains narrow.

A high bar for hikes from here

While headline job growth remains solid, underlying labor market signals are more mixed. Against that softer backdrop, we see a high bar for a Fed hike from here.

Explore the latest Advisor Outlook Explore the latest Advisor Outlook

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.

Explore advisor portfolio positioning in today’s markets

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.