"Post-war trade wind" is here! Bank of America shouts the golden age of commodities, semiconductors, consumer and Chinese technology are poised to take off.

Michael Hartnett, the head strategist at Bank of America, known as "Wall Street's most accurate strategist," leads a team that has released a research report stating that even if the new round of Middle East wars is temporarily declared over, the global commodity market rally is expected to continue for several years until the end of 2030. Regarding the broader "post-war trading" trend, Hartnett's team emphasizes that commodities are the main structural trade, Chinese tech stocks and the global semiconductor sector are tactical core offensive directions, and global consumer stocks are expected to benefit from potential "policy panic rescue packages" that the U.S. government may implement in its efforts to prevent a recessionsimilar logic also applies to the global consumer sector. Hartnett's team at Bank of America is aggressively betting on a new strategy framework called "Post-War trading trend underpinned by risk assets continuing to rally under policy support + a new round of inflation and reshaping of the geopolitical landscape for winners in resources and high-end manufacturing chains." In this framework, the U.S. stock market is considered difficult to systematically short not only because the fundamentals are still strong, but also because Hartnett believes that the market is deemed "too big to fail" by policy makers such as the treasury department and the Federal Reserve. Only in the event of a collapse of the U.S. dollar/U.S. bond or a major credit event would the bears gain the upper hand again. According to Hartnett's team at Bank of America, commodities are the most logical and highest-level post-war core trade theme, with investments in commodities expected to outperform stocks in the coming years due to the increasing need for hedging risks, inflation, and a weakening dollar. This is driven by geopolitical tension and the global AI competition which are reinforcing the competition for energy, rare earths, minerals, and key resources. He even summarizes the core logic as: whoever controls chips, rare earths, minerals, and high-efficiency energy, is the winner of this global AI war. This means that, according to Bank of America, the pricing core of the post-war world is no longer just interest rates and profits, but resource security, supply chain control, and fiscal expansion. The long-term bond yield curve steepening, consumption sector, semiconductor sector, and Chinese tech stocks, plus a more macro judgmenti.e., the global stock market seems unlikely to bear deep bearishness under policy support, which, according to Bank of America, is second only to commodities as the core trading theme under the "post-war trading trend" framework. Looking further ahead, Hartnett's team at Bank of America is leaning further towards international stocks and small caps, rather than focusing long-term on U.S. tech giants as the market mainstream view suggests. They are betting that funds will shift from the old trading order of "U.S. large-cap tech + U.S. bonds" towards a new order of resource concentration, globalization, manufacturing chains, and assets benefiting from policies. The era of resources dominance is here! Who controls rare earths, energy, and chips, wins the AI war, as Bank of America declares commodities will reign supreme in the coming years. Hartnett's team at Bank of America predicts that in the coming years, investors will continue to flock to the commodity trading market, mainly because the commodity trading theme will benefit from global geopolitical and macroeconomic volatility. "Stocks will be replaced by the commodity trading theme as the biggest winner in the remaining time of the 2020s (from 2026 to the end of 2030), as investors actively seek to hedge risks, inflation, and a weakening dollar," say Bank of America strategists. "The U.S. government's excessive fiscal expansion means that there is a higher probability of a rebound in government bond markets in the next few years amidst recession risks, but there will not be a rare bull market." Bank of America states that the ongoing Middle East geopolitical conflicts and the global AI competition are bringing core supply chain issues related to traditional energy sources to greater attention. Countries are seeking to limit the impact of rising energy and other natural resource prices on industry and consumers on one hand, while also ensuring the supply of key resources like rare earths on the other hand. These resources are crucial for manufacturing and technology. Since the beginning of 2025, the Bloomberg Commodity Index has risen substantially by 35%, more than double the return of the S&P 500 over the same period. The benchmark U.S. bond index has increased less than 7% during this time. Particularly, oil prices have surged this year, as Iran essentially shut down the majority of shipping systems after the outbreak of wars; at the same time, metals like gold, silver, and copper, which already benefited from central bank buying and continued growth in AI infrastructure, have seen further gains. As shown in the chart above, commodities have significantly outperformed stocks and bonds. Note: Data has been normalized, percentage gains are based on December 31, 2024. Hartnett's team at Bank of America says that in the latter half of this decade, the fundamental winners will be commodities far surpassing the dollar, international stocks, and small caps outperforming U.S. stocks and large caps. They believe that the core driver of geopolitical turmoil is the "monopoly of demand for commodities." "Whoever owns chips, rare earths, mineral resources, and core energy sources like oil will win this global AI war." Semiconductors, consumer stocks, and Chinese tech stocks soaring high According to Hartnett's team at Bank of America, semiconductors, consumer stocks, and Chinese tech stocks, along with the steepening of the long-term yield curve, will be the tactical offensive trading themes with more operational and excess alpha properties in the post-war mentality over the next several quarters. Chinese tech stocks are related to "China's manufacturing" continuing to lead global manufacturing, accelerated development of advanced AI in China, ongoing easing of U.S.-China trade tensions, and potential major summit windows; semiconductors correspond to AI hyperscalers (i.e., major cloud computing giants like Google, Microsoft, and Amazon) continuing their capital expenditure arms race, as long as they "are more willing to borrow and lay off workers, and unwilling to retreat from the AI capex race (i.e., the so-called 'AI computing power arms race')," there continues to be value in the entire semiconductor core chain; consumer stocks are repeatedly emphasized by Hartnett as the "best trading theme after the war," mainly because he anticipates that the fiscal and monetary policy focus will be more inclined towards easing pressure on people's living costs and avoiding the synchronously deteriorating economic and public opinion trends. Hartnett's strategist team has listed "consumer stocks" as the "most favored contrarian long" theme in the current market environment of oscillating risk appetite and continued market volatility due to geopolitical factors. The core logic is not that consumer fundamentals have hit rock bottom, but rather Hartnett predicts that after easing the Middle East conflict, the White House will be forced to implement a "policy panic" style of consumer spending support under a higher energy inflation macro backdrop due to recession risks, cost of living pressures, and midterm election considerations. This Wall Street giant cites the logic of a rebound in oversold stocks driven by "performance certainty + high beta attributes," as well as the continuous expansion of global AI spending, as the core basis for long-term optimism in semiconductor stocks. Bank of America's latest forecast data shows that by 2030, the global semiconductor market will reach a total size of $2 trillion with a compounded annual growth rate of 20%, driven by the accelerating growth of the core AI power industry chain (led by Nvidia, Broadcom, TSMC, and Micron, with forward valuations ranging from 15x to 20x) and sectors such as storage/logic chips, 2.5D/3D advanced packaging, and data center power chains. In contrast, as of at least 2025, the global semiconductor market is expected to be less than $1 trillion. As model sizes, inference path, and multimodal/agent AI workload push the expansion of computing resources exponentially, capital expenditure trends of tech giants increasingly focus on centralized AI computing infrastructure driven by the surge in demand for AI computing power. Global investors continue to anchor the "semiconductor stock bull market narrative" around expectations for new product iterations and AI computing power cluster delivery from leaders like Nvidia, AMD, Broadcom, TSMC, and Micron, in sectors related to AI training/inference such as power, liquid cooling systems, and optical interconnect supply chains, even amidst the uncertainty of the geopolitical situation in the Middle East. According to the latest analyst expectations compiled by institutions, Amazon in conjunction with Google's parent company Alphabet, Facebook's parent company Meta Platforms Inc., and Oracle and Microsoft, are expected to have a combined capital expenditure related to artificial intelligence of approximately $650 billion in 2026, with some analysts believing that overall spending could exceed $700 billionimplying a possible year-on-year increase of over 70% in AI capital expenditure. It is worth noting that these five major U.S. tech giants are expected to collectively invest around $1.5 trillion from 2023 to 2026 to build immense AI computing power infrastructure; by comparison, these tech giants' cumulative investments over the entire historical period up to 2022 were approximately $600 billion.