Fidelity Sees Inflation Staying, Points to 4 Market Sectors

Fidelity International says inflation has settled into markets as a structural force rather than a passing shock. It identified 4 areas investors can look to.

The investment management firm’s list includes banks, artificial-intelligence supply chains, power-supply businesses, and gold. 

Why Fidelity Thinks Structural Inflation Is Here to Stay

Government deficits, artificial intelligence (AI) capital spending, tight labor markets, trade barriers, and energy disruptions all underlie the firm’s structural inflation call. 

“Inflation increasingly appears here to stay, rather than being a short-lived phenomenon,” the firm said.

Developed economies are now in a sixth consecutive year above target, according to Fidelity. The firm argues that central bankers “might have declared a premature victory.”

US data supports part of that argument. Consumer prices held at 3.4% in the 12 months through July, well above the Federal Reserve’s 2% goal. Core inflation ran at 2.5%.

The equity guidance stays general. Within equities, the firm said to look to businesses that could benefit from rising prices and persistent supply shortages. Diversification, it adds, matters more when price pressure persists.

Notably, the outlook names no individual companies. Every call sits at the sector or country level.

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The 4 Sectors and How They Have Already Traded

Since Fidelity named no index or ticker, sector benchmarks offer the closest available read on how each call has traded. Bank equities lead the list. Fidelity singled out Japanese lenders, citing a striking improvement in profitability.

The Next Funds TOPIX Banks ETF, which tracks the performance of the TOPIX Banks Index,  has gained 42% this year. Mizuho added 40.76%, Mitsubishi UFJ 40.2%, and Sumitomo Mitsui 29.8%.

Technology firms across South Korea, Taiwan, and onshore China form the second call. The firm said they stand to benefit from shortages and price inflation driven by growing AI demand. 

In this sector, South Korea’s KOSPI is up 58.7% in 2026, despite persistent volatility. SK Hynix has more than doubled, up 152.6%, and Samsung Electronics rose 105.2%.

Taiwan’s tech-heavy TAIEX has climbed 56%. China’s Hang Seng TECH Index, however, is down 16.16%.

Next, the firm pointed to power supply businesses from the US, Europe, and Japan. The S&P 500 Utilities Index is down 0.17% for the year, while the STOXX Europe 600 Utilities index has gained 8.64%.

Gold rounds out the list, alongside metals and miners tied to electrification. It traded up 7.38% for the year on August 26, after climbing about 13.8% during August alone.

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