JP Morgan’s Karen Ward examines the strength in equity markets

The ‘global savings grab’ – demand for capital is rising.

Why are equity markets still buoyant? Are equities about to crash?

​JP Morgan’s Chief Market Strategist (EMEA) Karen Ward challenged the common narrative that markets are disconnected from reality. At a time when geopolitics feels increasingly unstable and headlines suggest disorder, equity markets continue to push higher. Rather than viewing this as complacency, or rabbit-in-the-headlights, she framed it as entirely rational.
 
The reason she gave is simple: chaos is driving spending and spending is driving growth.
 
Three structural forces underpin this dynamic. First, governments globally are stepping up fiscal spending in response to a more fragmented world order. Defence budgets are rising, energy independence is becoming a priority, and investment in domestic infrastructure is accelerating. Second, corporates are entering a new investment cycle, particularly in technology. AI is no longer a distant theme - it is triggering significant capital expenditure as firms race to build, adopt, and monetise new capabilities. Third, while consumers remain cautious post-pandemic, their balance sheets are strong. Elevated savings and lower debt levels provide a latent source of demand.
 
Together, these forces represent a meaningful shift in the global economic regime. We are moving away from the “global savings glut” - a world defined by excess capital and limited demand - towards what Ward described as a “global savings grab.” In this new environment, capital is in demand. Governments, companies, and economies are all competing for it.
 
For investors, this is a fundamental change. When demand for capital rises, so does the return on that capital.
 
This has important implications across asset classes. In fixed income, the opportunity set is back after a decade of suppressed yields. Governments are issuing more debt, but investors can now demand higher compensation. Nonetheless, selectivity remains critical - not all borrowers will deploy capital efficiently.
 
Looking at equities, the dominance of the US - now comprising roughly 65% of global indices - may not persist in the same way. Over the past 15 years, global capital has flowed disproportionately into US assets, particularly large-cap technology stocks. But as spending broadens geographically, so too should growth and earnings opportunities. The next decade is unlikely to mirror the last.
 
Technology remains central, but we are entering a more complex phase. The AI story is shifting from creation to adoption - from building the technology to figuring out how it is used and monetised. This stage introduces uncertainty, competition, and dispersion in outcomes. The key question is no longer whether AI will transform industries, but which companies will ultimately capture the value.
 
The overarching takeaway is clear: we are in an environment that rewards active decision-making. The combination of higher demand for capital, broader growth drivers, and shifting global dynamics create a richer but more complex opportunity set.
 
Paradoxically, the more uncertain the world becomes, the more opportunities it creates for investors who are willing to be selective.