J.P. Morgan Redefined the Global Economy Based on New Topics

Quick overview

The Wall Street bank argues that the new global cycle will favor sectors linked to technology, energy, and infrastructure, while resource-supplying regions such as Latin America gain relevance.

The global financial system is undergoing a generational shift. According to J.P. Morgan’s 2026 Outlook, the world economy has moved beyond the era of low inflation and highly efficient globalization that dominated recent decades and is entering a new phase shaped by three structural forces: the rapid advance of artificial intelligence, the fragmentation of the international economic order, and a higher, more persistent inflation environment.

Rather than temporary disruptions, the bank argues that these trends are here to stay, forcing investors to rethink both asset allocation strategies and the relative positioning of regions and sectors in the global landscape.

Artificial intelligence: the defining transformation of the cycle

For J.P. Morgan, artificial intelligence represents a technological revolution on par with electrification or the mass adoption of the internet. While the report does not foresee an imminent bubble burst, it does acknowledge signs of overexuberance in certain market segments.

Today, nearly 40% of the S&P 500’s market capitalization is directly influenced by AI-related expectations, whether through infrastructure investment, productivity gains, or expanding corporate margins. The bank highlights that investment in digital infrastructure has accelerated sharply in recent years and that AI-related spending contributed more to U.S. GDP growth than private consumption in 2025.

Still, the report stresses that the key question is not whether AI is a bubble, but who will ultimately capture the economic value of this transition. History suggests that early movers are not always the long-term winners, reinforcing the case for active and selective management across both public and private markets.

Global fragmentation: from efficiency to security

The second major theme of the 2026 Outlook is the fragmentation of global trade and finance. J.P. Morgan describes a world moving away from extreme efficiency toward greater emphasis on resilience, security, and control over strategic resources.

Geopolitical tensions, the return of high tariffs, and the formation of trade blocs are reshaping global value chains. The report notes that globalization as previously understood began losing momentum after the global financial crisis, with recent conflicts accelerating this shift.

In this new environment, sectors tied to energy, defense, critical infrastructure, and supply-chain security emerge as structural winners. Europe, for instance, is undergoing a historic pivot toward higher military and infrastructure spending, marking a departure from the so-called “peace dividend” that defined the post-Cold War era.

Structural inflation and a paradigm shift

The third pillar of the report is inflation. J.P. Morgan argues that prices are unlikely to return to the low-inflation regime that prevailed before the pandemic. Persistent fiscal deficits, population aging, more active industrial policies, and trade fragmentation point to a world where inflation is both more volatile and structurally higher.

“We see several post-pandemic forces that increase the risk of inflationary shocks. The deepest—and hardest to measure—risk is the psychology of consumers and firms. After the pandemic, both groups re-internalized the possibility of inflation, and corporate behavior shifted toward much faster price adjustments,” the report states.

In addition, the bank warns that bottlenecks remain in key sectors: “These constraints create an environment in which prices adjust faster than supply and can remain elevated even amid weak demand. Producers that control these bottlenecks retain significant pricing power.”

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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