Why Stocks Are Up Amid Global Turmoil: A Moody’s Deep Dive

Stocks Up: Winners and Losers in a Turbulent World

Investors are puzzling over why stocks up while geopolitics, war and inflation dominate headlines. Moody’s latest credit analysis argues the market has already re‑priced the new reality; the clues lie in bond yields and sector performance. Government bonds across the G7 have climbed, with the 30‑year U.S. Treasury touching ↑ 5% for the longest stretch since 2008, according to Bloomberg. In corporate debt, investors shied away from high‑yield issues, driving ↓ 2% in risk‑tier issuance.

“The era of ultra‑low rates is over,” says Atsi Sheth, chief credit officer at Moody’s.

The shift is evident in equities: software, automotive and consumer‑goods names have lagged as price pressures bite, while energy firms benefit from the Iran conflict and semiconductor manufacturers thrive on the AI hardware boom. The post‑pandemic environment, once defined by cheap capital and abundant liquidity, has given way to higher deficits, demographic headwinds and security‑driven policy. As borrowing costs rise, the market rewards sectors that supply the tools of the AI surge and the energy needed to power them. Yet risks remain—AI spend may not deliver expected returns, and any escalation in geopolitical tension could test the assumption that governments will intervene. For now, the market’s calm veneer masks a complex reallocation beneath the surface. Reuters provides ongoing coverage of these trends.