27 June 2025: Weekly Update – Oil Weakness, AI Leadership and Middle East Ceasefire

This retreat in energy prices has redirected attention back to underlying oil fundamentals, which remain notably weak due to subdued demand and structural headwinds, particularly from China where electric vehicles and LNG-powered trucks continue to erode traditional fuel consumption.

With the immediate risks in the Middle East receding, NVIDIA and Microsoft both achieved new all-time highs this week, cementing their positions as the largest constituents of the S&P 500 with each commanding market capitalisations of around $3.7 trillion. Their performance underscores the continued enthusiasm for artificial intelligence technologies. Our broader exposure to the theme through the Polar Capital Artificial Intelligence Fund has performed well – delivering 7.6% month-to-date this represents the best performing equity fund in the T. Bailey portfolios over that time.