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Stay ahead of rapidly changing markets with the latest research and commentary from Federated Hermes. Our Insights page provides thoughtfully crafted analysis designed to inform confident investment decisions.

Insightful perspectives and forward-looking market analysis

Timely market analysis

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A scenario-focused look at what’s moving markets.

First QUARTER 2026

Quarterly Update

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Featuring our latest forecasts and key capital markets trends.

April 2026

Monthly Update

In the US, equity market investors have been consumed for years by narrow breadth, with just a handful of megacap tech stocks garnering the lion’s share of attention, capital, and returns. The same thing is true in the emerging markets (EM), and it seems the reason behind this is the same: the flourishing of big tech and, particularly, the AI trade. Nearly half of South Korea’s stock index is made up of two tech companies. In Taiwan, the largest single firm, also a tech company, makes up more than one-fifth of the equity index. Taken together, those three companies make up nearly a quarter of the MSCI EM index. Before calling that excessive, one should note that such tight concentration also marks the modern S&P 500. The top 10 holdings make up more than a third of both indexes. Narrow breadth has worked well for EM, which outperformed developed markets and the US last year. Concentration can build an incredible amount of wealth when it’s working. “Put all your eggs in one basket — and then watch that basket,” said Andrew Carnegie. The tricky part in EM, as in the US, is that this concentration has punished those who shunned it, but someday may punish those who embrace it.

MAY 11, 2026

Narrow breadth and tech concentration characterize both EM and the US.

Here, there, and everywhere

Our latest views on data, trends and events influencing the markets.

Capital Markets

Our outlook: In the event that the AI trade stays strong but not unduly so, we are likely to see a growth stabilization scenario. A more frenzied AI boom could lead to risk-on acceleration. The less-appealing prolonged inflation scenario might indicate a degree of rotation away from AI, while a hard landing would likely trigger a bursting of enthusiasm and a precipitous drop in spending on AI. Our four scenarios (see our monthly Capital Markets update for more): Prolonged inflation — inflation remains sticky, energy prices stay elevated, and policy easing is delayed, supporting defensive positioning. Growth stabilization — inflation moderates gradually, growth remains positive, and markets broaden beyond megacaps, supporting balanced portfolios. Risk-on re-acceleration — geopolitical tensions ease quickly, inflation expectations fall, and markets price ongoing rate cuts, potentially supporting risk assets. Hard landing — growth deteriorates and financial conditions tighten, creating a risk-off environment, supporting liquidity. For more on our scenario-led outlooks read our monthly and quarterly Capital Markets publications.

Source: Federal Reserve Bank, St. Louis, 4/8/2026