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Monthly View - March 2026

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Tech sell-off and new trade tariffs do not change our constructive stance - Monthly View - March 2026

by Willem Sels, Global Chief Investment Officer, HSBC Private Bank and Premier Wealth
Feb 26, 2026

  • In recent weeks, there has been sharp rotation from technology – a popular overweight – into other sectors, value-style and income-paying stocks. But while we have been advocating that investors look across and beyond AI, into a broad range of sectors and geographies, the move seems overdone
  • The sell-off started in software, due to fears that incumbents’ services could be replaced by AI start-ups. We think this is exaggerated as incumbents are not defenseless and can also use AI to get more efficient
  • US IT’s Price/Earnings ratio is now at the lowest level in 5 years, compared to the P/E of the S&P500. The sell-off has also reduced positioning, creating a healthy base for renewed market upside. The rotation to defensive stocks is not in line with the resilient data, so we adopt a cyclical stance. We maintain our mild overweight in IT and the US, while continuing to diversify to both build resilience and broaden the opportunity set
  • The US Supreme Court ruling and changes to US trade policy were largely expected and do not alter our strategy. The impact on bond yields should be mild as repayments will take a lot of time, and the new tariffs are intended to generate similar revenues as in 2025. There is some uncertainty on the rules in the short term, but we think the administration now needs to follow more stringent rules to set tariffs, which should ultimately help restore confidence. This could help foreign companies and markets, causing some mild further US dollar weakness, in line with the existing trend

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