Fidelity Sees Inflation Staying, Points to 4 Market Sectors

Fidelity International argues that inflation has become a structural element in global markets, prompting the firm to highlight four sectors that could benefit from persistent price pressures.

Why Fidelity Views Inflation as Structural

The firm cites government deficits, AI‑related capital spending, tight labour markets, trade barriers and energy disruptions as drivers of ongoing inflation. It notes that developed economies have posted inflation above target for six consecutive years, with U.S. consumer prices at 3.4% year‑over‑year and core inflation at 2.5%.

Four Sectors Identified

• Banks – Fidelity points to improved profitability in Japanese lenders. The TOPIX Banks Index has risen about 42% in 2026, with major banks such as Mizuho, Mitsubishi UFJ and Sumitomo Mitsui posting gains of roughly 30‑40%.
• Artificial‑intelligence supply chains – Technology firms in South Korea, Taiwan and onshore China are expected to benefit from AI‑driven demand. South Korea’s KOSPI is up 58.7% in 2026, with SK Hynix and Samsung Electronics more than doubling and gaining over 100% respectively. Taiwan’s TAIEX is up 56%, while China’s Hang Seng TECH Index is down 16.16%.
• Power‑supply businesses – Utilities in the U.S., Europe and Japan are highlighted. The S&P 500 Utilities Index is slightly down 0.17% for the year, whereas the STOXX Europe 600 Utilities index has gained 8.64%.
• Gold and related miners – Gold has risen 7.38% year‑to‑date as of August 26, after a strong August rally of about 13.8%.

Implications for Investors

Fidelity advises focusing on sectors that can absorb rising costs and supply constraints, emphasizing diversification when inflation persists. The guidance remains at sector and country levels without naming specific companies.