Emerging markets have shown resilience amid war, $100 oil prices, and rising Treasury yields in 2026. Despite concerns over a potential US interest-rate hike, investors remain confident in the ongoing rally. A hot inflation print on Friday strengthened the case for a Federal Reserve rate increase next week, but many money managers continue to support emerging markets.

Their bull case is based on improved policy credibility across several emerging economies and strong corporate earnings. Most significantly, they see minimal risk of a major dollar rebound, which has historically been the primary source of volatility for emerging markets. The report features contributions from Selcuk Gokoluk and Peter Laca, with imagery from Cape Town, South Africa, photographed by Dwayne Senior/Bloomberg.