The commodity market is returning to the center of the major capital market debate. While equities continue to record high inflows and bonds remain in a difficult environment, Bank of America sees a clear structural winner for the coming years: commodities. From the analysts’ perspective, there is much to suggest that investors could increasingly focus on energy, metals, and other natural resources in the second half of the 2020s. The background is an interplay of geopolitical tensions, inflation, supply chain risks, and a weaker US dollar.
This assessment does not target a short-term market movement, but rather a broader pattern. BofA describes commodities as a potential main beneficiary of an environment that can increasingly be summarized under the catchphrase “anything but bonds.” This refers to a capital market phase in which investors seek protection from risks, but bonds are no longer automatically considered the preferred hedge due to fiscal burdens and fluctuating inflation. In this scenario, the commodity market could take over the role that government bonds previously held in many portfolios.
Commodities Benefit from Geopolitics, Inflation, and Supply Chains
According to Bank of America’s assessment, the environment for the commodity market has changed fundamentally in recent years. The war in the Middle East and the global race for Artificial Intelligence are drawing more focus to supply security. Governments are trying to limit the consequences of sharply rising prices for energy and other raw materials for industry and consumers. At the same time, pressure is growing to secure access to critical minerals and rare earths, which are indispensable for technology, industrial manufacturing, and digital infrastructure.
It is precisely in this area of tension that commodities are gaining strategic weight. Experts argue that geopolitics today is increasingly shaped by the attempt to secure control over key raw materials. Those who possess chips, rare earths, minerals, and oil also improve their position in the competition for technological and industrial strength. In this interpretation, the commodity market is not just a cyclical sector, but part of a larger political and economic reorganization.
This development is also reflected in performance. The Bloomberg Commodity Index, for example, has risen by 35% since the beginning of 2025. This is more than double the increase of the S&P 500 over the same period. In comparison, US Treasuries achieved a gain of less than 7%. The movement in oil prices was particularly strong after Iran closed the Strait of Hormuz to most shipping following the outbreak of war. Metals such as gold, silver, and copper had already benefited previously from tailwinds provided by central bank purchases and the expansion of infrastructure surrounding Artificial Intelligence.
Bank of America Sees Commodities as Winners of the Second Half of the Decade
For the second half of this decade, Bank of America expects a shift in market leadership. From a fundamental perspective, according to Bank of America, commodities could benefit more than the US dollar. Furthermore, the international stock segment and smaller companies are seen to have an advantage over US titles and large caps. Behind this is the expectation that geopolitical uncertainty, fiscal spending, and structural bottlenecks in key raw materials will sustainably shape the market environment.
A central point in this argument is the skepticism toward bonds. According to the analysts, the ongoing fiscal surplus of many states suggests that there will be bear market rallies in government bonds over the next few years, but not a new long-term bull market. For the commodity market, this would be a supportive environment because investors are looking for alternatives that can offer both inflation protection and geopolitical hedging.
In the short term, however, the Bank of America team is not only betting on commodities. Currently, positions on a steeper yield curve are also preferred, as further interest rate hikes by central banks are being removed from expectations. In addition, reference is made to Chinese technology stocks if tensions with the USA continue to ease. Consumer titles and chip stocks are also among the preferred areas in the short term, as policymakers must keep an eye on the cost of living while major technology companies continue their spending on AI infrastructure.
Why the Commodity Market Fits into a Larger Capital Market Picture
Despite the constructive outlook for commodities, equities remain a central part of market activity. Analysts point out that equities are on track for a record year in terms of inflows. Markets are increasingly viewed by policymakers as “too big to fail.” Since the global financial crisis, political interventions have regularly ensured that major corrections or pronounced bear phases on Wall Street were contained.
So far this year, equities have recorded inflows of $275 billion. According to the major US bank, this trend is likely to continue unless there is a major political error, such as a collapse in the dollar or bonds, or a serious credit event. This is precisely why Bank of America’s view should not be understood as a general rejection of equities. Rather, the commodity market is described as the area that could gain relative importance in an environment characterized by uncertainty.
This results in a market picture in which several developments act simultaneously: equities remain liquid and politically supported, bonds lose their appeal, and commodities rise from a cyclical segment to a strategic building block. From Bank of America’s perspective, there is much to suggest that exactly this shift could characterize the second half of the 2020s. The commodity market would then not just be a reaction to crises, but an expression of a more comprehensive change in the global economy, geopolitics, and capital allocation.
