Global Equity Rally Gains Strength on Fed Cut Hopes

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May 19, 2026, delivered another sign of rising market confidence as global fund managers sharply increased equity exposure, encouraged by strong earnings and hopes for Federal Reserve rate cuts.

Fund Managers Make Record Shift Toward Equities

Global fund managers raised equity allocations by the biggest margin on record in May, according to Bank of America’s latest survey. A net 50% of respondents said they were overweight equities, jumping from 13% in April, while cash levels fell to 3.9% from 4.3%.

The survey covered 200 investors managing $517 billion in assets between May 8 and May 14. Optimism was fueled by solid corporate earnings and continued enthusiasm around artificial intelligence investments.

Inflation Risks Still Shadow Markets

Despite the bullish tone, inflation concerns remain. About 40% of respondents viewed a second inflation wave as the largest risk facing markets, while 62% expected 30-year Treasury yields to climb toward 6%.