BlackRock Adjusts Model Portfolios Amid Market Uncertainty

BlackRock has increased its U.S. stock overweight to 3% in model portfolios, signaling continued confidence in equities despite stretched valuations in AI-related names and fading hopes for aggressive Fed rate cuts. The S&P 500’s six-month rally shows signs of fatigue, but strong earnings and slowing inflation keep the central bank on track for eventual easing. Nvidia’s upcoming earnings report will serve as a litmus test for the tech sector’s ability to sustain momentum.

Michael Gates, lead strategist for BlackRock’s Target Allocation ETF models, emphasizes a constructive risk-on stance, citing robust earnings, Fed policy flexibility, and improved liquidity conditions. The firm’s model platform assets have surged from $150 billion to $185 billion this year, amplifying the market impact of even minor portfolio adjustments.

BlackRock is simultaneously executing a factor rotation—boosting exposure to value and momentum strategies while dialing back growth allocations. This rebalancing has already triggered significant capital flows across investment products.