BlackRock’s equity overweight stance is focused on the United States and emerging markets, driven by strong Q1 profit margins and opportunities in defense-related sectors.

The firm notes ongoing strength in corporate profits and limited global growth damage, prompting a reallocation toward U.S. and EM equities despite geopolitical tensions.

BlackRock lifted its U.S. stock stance to overweight from neutral, citing contained Iran war impacts and robust earnings prospects as supporting factors.

The firm raised its U.S. stock outlook to overweight, driven by contained Iran-related disruption and solid corporate earnings expectations.

Risk levels in the U.S. and EM were reaffirmed due to high earnings expectations and the view that macro damage from conflict is contained, with emphasis on profit margins this earnings season and defense opportunities.

Earlier Iran-related caution has faded as strategists now see limited macro damage and a greater chance of a lasting ceasefire that could keep Strait of Hormuz flows open.

Technology profits are slated to rise about 45% in 2026, even as stock gains remain modest, leaving IT valuations the lowest among major sectors since mid-2020.

The expected 45% earnings growth for technology this year coincides with only modest gains, prompting BlackRock to note IT valuations at a historic low relative to other sectors since mid-2020.

Two signposts prompting the risk re-upping: evidence of resumed Strait of Hormuz oil flows and clearer indications that macro impacts from the conflict are contained.

BlackRock cites tangible signs of restored Hormuz flows and visible containment of macro risks as triggers for increasing risk exposure.

Earnings expectations for 2026 are improving in both the U.S. and emerging markets, with S&P 500 profits seen rising about 12.6% in Q1 and potentially 19% if historical beat rates hold.

Forecasts point to stronger 2026 earnings for U.S. and EM equities, including a 12.6% Q1 uplift for S&P 500 companies and a possible rise to 19% if beat rates continue.