Emerging-market stocks are rallying three times as fast as US equities this year, and their lead may widen further if relative share valuations are any guide.

Israeli stocks are breaking out of a valuation range they were stuck in for almost two decades, with investors paying record multiples to own them on bets the country is poised for a post-war technology-led economic boom.

Profit forecasts for emerging-market companies are hitting record highs even as the war in Iran shakes global markets, with investors betting on earnings resilience at Asia’s artificial-intelligence powerhouses.

Inflation has sunk to a record low in emerging markets even as it accelerates in advanced economies, signaling developing countries are better placed to respond to higher energy prices and could see a rebound in their bonds.

Emerging-market stocks rallied Friday, recording their biggest weekly advance since the Covid era, as optimism grew that the fragile ceasefire in the Middle East will hold.

Emerging-market currencies broadly gained as news Israel agreed to hold direct talks with Lebanon fueled hopes for peace in the Middle East and lifted risk assets.

Emerging-market assets from Asia to Latin America surged in a broad-based rally on Wednesday, notching their strongest session in years after a US–Iran ceasefire sent oil prices tumbling and unleashed a wave of global risk appetite.

Emerging-market assets rose as traders clung to hopes of last minute de-escalation of the Middle East conflict just hours before Donald Trump’s deadline on Iran was set to expire.

Emerging-market assets started the week with modest gains amid speculation that US President Donald Trump may back down from a threat to significantly escalate the war in Iran.

The Middle East war risks ending a run of net credit-rating upgrades across emerging markets and could trigger a new downgrade cycle as it fuels inflation and tightens financial conditions, S&P Global Ratings Director Ravi Bhatia said.

The Iran war has not just broken a decades-long relationship between crude oil and emerging-market currencies, it has pushed it into reverse, with their correlation turning the most negative in at least 27 years.

Most emerging-market currencies rebounded from earlier losses as the dollar and oil prices sank after US President Donald Trump signaled the Iran war could be ending soon.

Emerging-market local-currency bonds are becoming less sensitive to swings in US Treasuries as investors focus more on yield advantage.

JPMorgan Chase & Co. said it will remove the United Arab Emirates from its emerging-market bond indexes by June after the Middle Eastern nation exceeded the bank’s measures of wealth for three successive years.

Morgan Stanley Investment Management is adding to emerging-market bets that are insulated from the artificial intelligence boom as it positions for a potential pullback in the crowded tech trade, according to Deputy Chief Investment Officer Jitania Kandhari.

Morgan Stanley Investment Management is adding to emerging-market bets that are insulated from the artificial intelligence boom as it positions for a potential pullback in the crowded tech trade, according to Deputy Chief Investment Officer Jitania Kandhari.

Dubai stocks are off to their strongest start in 12 years as investors bet on the emirate’s resilient economy and look beyond volatile oil and artificial-intelligence trades.

Emerging-market assets were little changed on Tuesday as traders weighed the recent optimism toward the asset class against a firmer US dollar and thinner trading volumes due to holidays in major markets.

Emerging-market assets pared a monthly rally, falling for a second session after a massive selloff in metals and renewed dollar strength dampened risk appetite on Friday.

As a result of the sweeping rally across emerging markets, bonds prices are increasingly moving on their own accord, instead of in-line with the US.