Emerging Markets Extend Record Rally Amid AI Boom and Dollar Weakness
Emerging markets have notched a historic 10-month winning streak, adding $6 trillion in market value this year alone. The rally stems from a confluence of factors: a weakening U.S. dollar, relentless AI-driven demand for hardware infrastructure, and China's targeted stimulus measures.
Asian semiconductor firms and data center supply chains are capturing the lion's share of capital flows as global investors pivot from U.S.-centric plays. MSCI Emerging Markets earnings estimates have surged to February 2022 levels, narrowing the valuation gap with developed markets.
'The dollar's weakness has been catalytic,' notes AllianceBernstein's Sammy Suzuki. 'EM equities now reflect tech and IP-heavy sectors—not just commodities and banks.' This structural shift coincides with Trump-era trade policies accelerating capital rotation.
