Markets remain resilient as the economic outlook continues to evolve. In this issue of Steady Investor, we cover the key trends investors are watching, including:
- AI’s current impact on inflation
- Gold defies inflation expectations
- Trade holds up despite risks
Is AI Helping or Hurting Inflation? With a ceasefire in place between the U.S. and Iran, energy’s contribution to inflation pressure is expected to ease. But there may be another catalyst in the wings that is more secular in nature: America’s enormous AI build-out, the scale of which is difficult to fathom. Analysts estimate capital spending this year at five hyper-scalers (Alphabet, Amazon, Meta, Microsoft, and Oracle) will reach $741 billion, up nearly 75% from last year. Companies have already announced some $1.5 trillion in data-center plans, with only a small portion of that investment in place so far.The inflation piece that’s interesting here is the reminder that the AI boom is not just about software. It is a physical build-out requiring chips, servers, cooling systems, cables, backup power, and specialized construction labor. When that much money chases limited supply, prices rise. Case in point: in May, consumer prices for software and accessories were up about 15% from a year earlier, while wholesale prices for electronic components and accessories rose about 27%.The cost pressures are not limited to tech hardware. Wages for electrical and wiring-installation contractors were up 6.5% from a year earlier, versus 3.6% for all private-sector workers. Data centers are also expected to account for nearly half of U.S. growth in power demand through 2030, adding another source of upward pressure on electricity costs.AI may eventually boost productivity and lower inflation. But for now, it looks more likely to keep inflation firmer than many investors hoped.1
Markets Have Held Up. Will Your Strategy?
Every week brings a new headline, prediction, or market narrative. The challenge isn’t keeping up with every development; it’s knowing which ones actually matter to your long-term investment strategy.
I recommend downloading our free guide, Navigating Market Volatility3, which provides practical principles to help you filter out distractions, manage risk, and invest with greater confidence. You’ll get insight into:
- Sharp market declines and corrections are a normal part of investing
- The best market days come unexpectedly (often within days or weeks of the worst days)
- Trying to pick market tops and bottoms is nearly impossible
- Trust your strategy and discipline, not the headlines
- Plus, more insights and assistance to help you keep your investment strategy on course
If you have $500,000 or more to invest, get your free volatility guide today!
Download Your Free Copy Today: Navigating Market Volatility: 4 Principles for Staying the Course2
Gold’s Recent Declines Offer a Good Reminder: It Isn’t a Reliable Inflation Hedge – Considering the inflation story above and recent hot readings tied to energy, one might expect gold to be holding up, given its mythical status as a reliable inflation hedge. Only it hasn’t. Gold’s recent slide is a useful reminder that the metal does not move in any simple, reliable lockstep with inflation or uncertainty. Indeed, inflation is still elevated, with May PCE running at 4.1% year over year. 2026 has also hardly lacked for geopolitical stress. Yet gold still fell below $4,000 an ounce this week for the first time since November, after hitting a record near $5,595 in January. That leaves bullion down roughly 29% from its peak despite exactly the sort of backdrop many people assume should favor it. In our view, the point is not that gold never rises during inflationary or uncertain periods. It is that those relationships are inconsistent and far less dependable than gold’s reputation suggests. In the short run, bullion tends to be driven by a messy mix of interest-rate expectations, dollar strength, investor sentiment, and positioning. This time, a hawkish Fed and stronger dollar appear to have mattered more than inflation fears. That helps explain why gold can disappoint investors who treat it as a straightforward hedge. It is still a commodity, and commodities can be volatile and sentiment driven.3
CBOE Gold Volatility Index
Despite All the Tariff and Geopolitical Noise, Trade Continues Apace – A little over a year on from “Liberation Day,” and we are pleased to report that fears of a global reordering of trade were overblown. World trade flows rose in April, with the volume of goods moving across borders up 0.7% from March after a 2.3% decline the prior month. That may not sound dramatic, but it is another sign that global trade has remained surprisingly resilient despite tariffs, shipping disruptions, softer business confidence, and lingering fallout from the conflict in the Middle East.Part of that resilience appears to reflect businesses building inventories to get ahead of possible supply disruptions and higher costs. But a more durable support has been the continued boom in AI-related investment, which is helping drive trade in semiconductors, servers, and other electronic equipment.All told, world trade increased 4.2% in 2025 despite widespread expectations that tariffs and geopolitical tensions would drag more heavily on cross-border activity. The strength appears to have carried into this year as well, even with periodic setbacks.For investors, that is the key takeaway. Trade is not booming in a straight line, and conflict-related disruptions are still a real risk, especially for commodity flows. But the global system has so far proven more adaptable than many feared. AI-related demand, improved trade policy conditions, and businesses’ ability to reroute or rebuild inventories have all helped cushion the blow.5
How Should Investors Respond to Today’s Market Environment? – Navigating today’s market environment isn’t about predicting what’s next; it’s about having a disciplined approach that can adapt to changing conditions while keeping your long-term goals in focus.
Our exclusive guide, Navigating Market Volatility6 is a free guide that offers a clear framework for staying disciplined and managing risk during uncertain markets. It covers topics such as:
- Sharp market declines and corrections are a normal part of investing
- The best market days come unexpectedly (often within days or weeks of the worst days)
- Trying to pick market tops and bottoms is nearly impossible
- Trust your strategy and discipline, not the headlines
- Plus, more insights and assistance to help you keep your investment strategy on course
If you have $500,000 or more to invest, access your free volatility guide today.
Disclosure
2 Zacks Investment Management reserves the right to amend the terms or rescind the free Navigating Market Volatility: 4 Principles for Staying the Course offer at any time and for any reason at its discretion.
3 Financial Advisor. June 24, 2026. https://www.fa-mag.com/news/gold-breaks-below--4-000-as-multi-year-rally-grinds-to-a-halt-87514.html
4 Fred Economic Data. June 26, 2026. https://fred.stlouisfed.org/series/GVZCLS
5 Wall Street Journal. June 25, 2026. https://www.wsj.com/economy/trade/world-trade-rose-in-april-in-fresh-sign-of-resilience-7765597b?mod=economy_feat1_global_pos1
6 Zacks Investment Management reserves the right to amend the terms or rescind the free Navigating Market Volatility: 4 Principles for Staying the Course offer at any time and for any reason at its discretion.
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