Smart Investor: Tech Stocks to Weather AI, Good News-Bad News on Return Dispersion, and Is ESG Investing Dead

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This week’s highlights:

Little by little, the continuing war with Iran is sending the stock market further into the red for 2026. If this war is going to become an economic shock, at this point, it looks like it will be the slow-motion kind. This past week, stocks slipped about 1.8%, bringing the loss since the war started to nearly 5%.

Still, investors in US stocks are faring better than those in other markets. As Rachel Schlueter writes, the outperformance of US stocks represents a sharp turn from the trend before the war, when foreign stock markets had the upper hand. You can find out what’s driving this new dynamic here.

Another ripple from the Iran war is hitting the corporate bond market. The yield advantage for holding corporate and high-yield bonds has been extremely small of late, but the war has that gap widening. Why? Sarah Hansen explains and talks to fund managers about the outlook for the credit market.

On the topic of bonds, Morningstar Index’s Dan Lefkovitz looks at the surge in money heading to global bond strategies from US investors. Does this move make sense? He thinks so, and explains why putting money into non-US bonds can be a good strategy.

Last week, The Wall Street Journal (my former colleague Corrie Driebusch, to be precise) reported that the Securities and Exchange Commission is gearing up for a proposal that would end the requirement for publicly traded companies to report quarterly earnings, instead requiring semi-annual disclosures. While such a shift would leave stock analysts and financial journalists with more time on their hands, proponents say it could help encourage more companies to go public. However, as PitchBook’s Rosie Bradbury and Michael Bodley report, other factors might keep unicorns roaming the private markets.

Meanwhile, Leslie Norton checked on the state of play for sustainable investing. Between outflows from sustainable fund strategies and an administration in Washington that’s openly hostile to ESG investing, some investors could be excused if they thought the investing approach was dead and buried. But as Norton writes, in a lot of ways, it’s just become part of the regular investing conversation.

Lastly, Ivanna Hampton spoke with Morningstar analyst Eric Compton about the fears around artificial intelligence that have dented some technology stocks. As we’ve highlighted over the past two weeks, Morningstar’s equity analysts did a serious deep dive into the economic moats for 132 tech and tech-adjacent companies to identify which competitive advantages will be threatened by AI. Compton talks through their approach and highlights stocks that are well-positioned for the new AI landscape.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our full weekly calendar of key upcoming data and events.