Q2 2026 Global Outlook | Barclays Investment Bank

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RESEARCH | 3 POINT PERSPECTIVE | MACRO SHIFTS

Lead contributor: Ajay Rajadhyaksha

26 Mar 2026

Headline sentiment, driven in part by surging oil prices and private credit concerns, has turned more cautious in recent weeks, adding to market volatility. Our Research analysts acknowledge that there are real cracks in the global economy, but do not think those risks will come close to creating a crater for global growth.

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The oil shock and the economy

The conflict in the Middle East, along with the closure of the Strait of Hormuz, a crucial passageway for tankers, has pushed oil prices above $100/barrel. Elevated energy costs weigh on real incomes, lifting headline inflation and complicating the job of central banks. However, today’s global economy is far less energy-intensive than in the past decades. With Brent crude tracking current forwards, our Research analysts forecast 3% global growth.

If a month from now the conflict remains unresolved, it would surpass our analysts’ working assumption. In that case, their economic forecasts may prove too optimistic.

An acyclic capex cycle

Continued growth in capital spending could help offset higher energy prices, according to our Research analysts. AI investment continues to be revised up, with top technology firms on track to spend almost $700 billion on capital expenditure in 2026 alone, up 36% from last year. The AI effect is also showing up in earnings. Our Equity Research strategists expect aggregate earnings per share for the S&P 500 to rise 16% this year, which would be the strongest year of growth since the post-pandemic rebound.

This spending is not limited to AI; Western companies and governments are also investing more in energy infrastructure and defence. Global defence spending hit $2.7 trillion in 2025 and is heading toward $3 trillion by year-end. Global energy investment reached $3.3 trillion in 20251, driven by the energy transition and grid investment. Combined, these figures indicate a large global investment impulse. As much of this investment is acyclic, it should continue even if markets fluctuate.

Private credit concerns

After years of rapid growth, easy refinancing and covenant-lite underwriting, private credit markets are coming under scrutiny for high lending to software companies as AI threatens to disrupt the industry. This is further strained by the opacity of private markets. While our Research analysts expect some private credit funds to suffer losses, these are unlikely to be large enough to disrupt the US economy.

Even with the most bearish assumptions—that software loans are one third of the US private credit universe and that one-third of these loans default, an unheard-of rate for this sector—the total losses would amount to $150 billion, spread over several years. Such losses should not move the needle in a $31trn economy, according to our analysts. It is another crack that should not turn into a crater.

AI gets physical: Innovation meets opportunity

With AI-powered humanoid robots poised to redefine the workforce, our Research analysts explore the investment themes shaping AI’s next era, where automation turns physical and innovation creates opportunity.

Our analysts favour US stocks

Our analysts remain constructive on risk, leaning into US equities. They do not believe investors should avoid fixed income, currencies and commodities (FICC), instead seeing selective opportunities across rates, credit, FX and commodities. Private credit stresses are viewed as a slow burn and non-systemic. Overall, equities are seen as better positioned to outperform, supported by resilient earnings and a continuing investment cycle this year.

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About the experts

Ajay Rajadhyaksha

Global Chairman of Research

Ajay Rajadhyaksha is Global Chairman of Research at Barclays, based in New York. He drives the global macro research and strategy effort, including economics, rates, FX, commodities, emerging markets, and asset allocation. Since joining Barclays in 2005, Ajay has held various positions, including Head of Macro Research, Co-Head of FICC Research and, before that, Head of US Fixed Income Research and US and European Securitised Research.

Christian Keller

Head of Economics Research

Christian Keller is a Managing Director and Head of Economics Research at Barclays, leading a global team covering both Developed and Emerging Markets. Mr. Keller is based in London and joined Barclays in 2007 from the International Monetary Fund (IMF) where he had worked since 1999. Based at the IMF headquarters in Washington D.C., Mr. Keller worked on IMF programs with Emerging Market economies in Europe, Latin America and Asia, and served as the IMF’s Resident Representative in Turkey from 2005-7. Mr. Keller graduated with a PhD in Economics from University of Köln, Germany, and holds a joined-MA in Economics and Finance from University of Köln and HEC, Paris.

Dominique Toublan

Head of US Credit Strategy Research

Dominique Toublan is a Managing Director and Head of US Credit Strategy, responsible for overseeing the team of US strategists who provide insights across investment grade, high yield, leveraged loans and credit derivatives. He also has a focus on the US Investment Grade market. Dominique brings more than 15 years of experience in the financial industry. Prior to Barclays, he was the Head of US Credit Strategy at BNP Paribas. Before that, he worked at J.P. Morgan within the High Grade Corporate Strategy and Credit Derivatives team. Dominique has been ranked the #2 US Investment Grade Credit Strategist in the Institutional Investor Fixed Income survey for the last two years. He was ranked #1 in US Credit Derivatives from 2011-2018. Dominique has a PhD from the University of Bern, Switzerland, and an MBA from the Wharton School.

Michael McLean

Public Policy Senior Analyst

Michael McLean is a Director and Public Policy senior analyst, covering major US legislation, regulation, policy proposals, and political events. He is a member of the Barclays global cross-asset Sustainable Investing Research team. Prior to his current role, Michael served as Director on the US Government Relations and Regulatory Policy team, where, among other responsibilities, he helped lead the bank’s advocacy on financial regulatory and other policy issues and represented Barclays with government officials and industry trade associations. He earned a B.A. degree, cum laude, in Government from Harvard.

Amarpreet Singh

Global Oil Research Analyst

Amarpreet Singh is a Director covering global crude oil markets. He joined Barclays’ global energy commodities research team in 2015. Before joining Barclays, Amar worked as an Equity Research Analyst covering blue-chip oil and gas stocks at Insight Guru Inc. He earned a BE degree in Civil Engineering from Birla Institute of Technology and Science, Pilani in 2010.

Corry Short

Credit Strategy Analyst

Corry Short is a Vice President in Credit Strategy, covering high yield, leveraged loans and private credit. Prior to joining Research in 2022, he worked in Barclays’ Investment Banking Division as a member of the Liability Management team within Debt Capital Markets. Corry graduated from Princeton University in 2019 with a degree in Economics.

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Q2 2026 Global Outlook | Barclays Investment Bank

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