Markets, Credit, and the Global Picture: What Investors Should Know

Markets face geopolitical shocks, economic shifts, and evolving credit trends. This article breaks down what’s happening beneath the headlines and what it means for investors today.

Last Edited by: LPL Research

Last Updated: April 13, 2026

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IN THIS ARTICLE:

War overseas, higher oil prices, changing interest rate expectations, and growth worries can make it feel like something must break. Insights from LPL Research suggest a steadier story. The economy has taken several hits and kept moving forward, credit markets are changing rather than shrinking, and global events have not upended the investment landscape.

The Economy Has Handled More Than Expected

The U.S. economy has faced several challenges in recent months, including higher energy prices, military conflict, and slower consumer spending. Despite that, economic activity has held up better than many expected. Growth has cooled from last year’s pace, but it has not collapsed, and employment remains relatively steady.

Inflation rose recently, mostly due to higher oil and transportation costs linked to disruptions in the Middle East. That matters because inflation measures how quickly prices rise across the economy. Outside of energy-related items, price increases have stayed more moderate. This helps explain why the Federal Reserve (Fed) has chosen to pause interest rate changes for now rather than react quickly.

Markets often react strongly to the initial shock, but history shows that lasting damage usually occurs only when these risks bleed into jobs, credit availability, or longer-term spending. So far, those transmission points remain mostly intact. Past performance does not guarantee future results.

Private Credit Is Drawing More Attention

Private credit refers to non-bank loans that are not traded on public markets. One area of private credit, direct lending, has drawn attention because of AI disruption worries, elevated withdrawal requests, and many loans approaching refinancing windows in a materially higher-rate environment.

But private credit goes well beyond direct lending. It also includes asset-based lending, which are loans backed by physical assets such as equipment, intellectual property, or inventory. These loans may have lower loss severity and stronger recovery rates compared to unsecured or cash-flow based lending because the lender can rely on the underlying asset as collateral.

The private credit space has grown broader and more complex, and neither direct-lending or asset-based lending is superior. Investors should consider whether private credit aligns with their portfolio diversification, liquidity, and financial goals.

Global Events Still Matter, but Context Helps

International news has been a powerful driver of markets this year, with the war in Iran disrupting oil supply, threatening key shipping routes, and injecting fresh volatility across asset classes. These developments can push prices around in the short term. Over time, markets often refocus on company earnings, economic growth, and interest rates.

Central banks do not all face the same conditions. The Fed, European Central Bank, and others may move in different directions. Those differences affect currencies, bond yields, and trade flows, but they do not automatically derail diversified portfolios.

 

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PUTTING MARKET UNCERTAINTY INTO PERSPECTIVE FAQS

Economic resilience doesn’t mean markets move in a straight line higher. Even when the economy is holding up well, markets can still swing in response to new data, policy signals, or global events. Resilience simply means the economy has avoided deeper problems such as a recession so far. Periods of volatility can still occur as investors continuously reassess growth, earnings, and interest rate expectations.

Private credit isn’t broadly unsafe, but risks have increased in some areas compared with a few years ago. Higher interest rates and slower growth can pressure weaker borrowers, especially where loan terms were aggressive. That said, many private credit strategies remain supported by asset-backed structures, conservative underwriting, and stronger covenants. The key is understanding the specific strategy, liquidity profile, and risk controls rather than viewing private credit as a single category.

Staying informed is important, but reacting to every global headline can be counterproductive. Markets often overreact to short-term news, while long-term results are driven more by fundamentals such as earnings, economic trends, and financial conditions. Periods like this can test investor patience, but focusing on what’s happening beneath the surface rather than daily headlines can make it easier to stay aligned with long-term goals.

Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. ​

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. ​

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. ​

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. ​

All investing involves risk, including possible loss of principal. ​

US Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. ​

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio. ​

Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio. ​

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.​

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Indexes are unmanaged and cannot be invested in directly.

The MSCI US Broad Market Index captures broad U.S. equity coverage. The index includes 3,204 constituents across large, mid, small and micro capitalizations, about 99% of the U.S. equity universe. Indexes are unmanaged and cannot be invested in directly.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Private credit carries certain risks — illiquidity, opacity, borrower concentration, and bespoke structures — that distinguish it from corporate bonds and bank loans and complicate its evaluation and oversight.

All index data from FactSet or Bloomberg.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Guaranteed | Not Bank/Credit Union Deposits or Obligations | May Lose Value

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