Indian investors looking to deepen their exposure to global markets in 2026 face a critical strategic decision: whether to invest broadly through ETFs or selectively through individual stocks. According to Tarun Singh, Founder and MD of Highbrow Securities, the current environment of geopolitical uncertainty, market volatility, and a strong US equity rally calls for a measured, layered investment approach.

Singh advocates against making binary decisions between exiting or aggressively chasing US stocks. Instead, he recommends Indian investors first build a stable core through low-cost US ETFs, then selectively add high-conviction stock or sector bets to enhance returns. This strategy balances diversification with opportunity, allowing investors to participate in long-term US growth themes like AI and innovation while managing risk more effectively.

Market Outlook and Performance Targets

Despite recent market gains, analysts remain optimistic about US market prospects for 2026. The S&P 500 is projected to reach around 7,600, driven by ongoing growth in artificial intelligence and strong company earnings. US markets started 2026 positively, with the Dow jumping 1,500 points, helping maintain momentum across most sectors.

Geopolitical Considerations and Sector Impact

Potential geopolitical developments, including possible US military operations in regions like Venezuela, could create short-term market volatility. Such operations might impact markets through:

• Changes in oil prices and investor flight to safer assets like the US dollar
• Limited overall effect due to Venezuela's modest 1.00% share of global oil supply
• Potential benefits for defense companies like Lockheed Martin and RTX through increased military spending expectations
• Mixed impact on energy companies, with refiners potentially benefiting from cheaper oil while producers face price pressure

Investment Strategy Recommendations

For 2026, Singh recommends adding to US portfolios on a selective basis rather than complete withdrawal. The approach should involve:

ETF Foundation Strategy:

• Broad US ETFs like VOO (S&P 500 tracker) offer low-cost diversification
• Sector-specific ETFs provide targeted exposure with fees under 0.10%
• Proven track record and minimal management requirements

Selective Stock Additions:

• Individual stocks like Nvidia in AI sector for higher return potential
• Requires active management and clear investment thesis
• Suitable for investors with global market understanding

Optimal Portfolio Construction

For Indian professionals with global market understanding, the recommended approach involves using ETFs as the main foundation while adding targeted stock picks to boost performance. This strategy allows investors to:

• Maintain stable core exposure through diversified ETFs
• Enhance returns through selective high-conviction positions
• Manage risk effectively during uncertain market conditions
• Participate in long-term growth themes while maintaining flexibility

The strategy emphasizes taking selective profits in overvalued areas while building positions carefully, supported by solid market fundamentals and favorable policy environment. Rather than complete portfolio restructuring, the focus remains on strategic enhancement through measured additions and tactical adjustments.

Credit card companies faced sharp declines on Monday after President Trump announced plans to implement a 10% cap on credit card interest rates, while broader market tensions emerged from escalating disputes between the White House and Federal Reserve over monetary policy independence.

Credit Card Sector Under Pressure

The financial sector experienced significant volatility as major credit card companies absorbed the impact of Trump's proposed interest rate limitations. The announcement sent shockwaves through the industry, with investors anticipating potential profit margin compression.

The proposed one-year cap on credit card interest rates at 10% represents a direct challenge to the current pricing models of major credit card issuers, potentially forcing significant adjustments to their revenue structures.

Mixed Market Performance

Broader market indices displayed mixed signals amid the financial sector turbulence and ongoing political tensions. The market's reaction reflected uncertainty about potential policy changes and their economic implications.

Fed-White House Tensions Escalate

Federal Reserve Chair Jerome Powell revealed that the Justice Department had subpoenaed the Fed and threatened criminal indictment over his testimony regarding headquarters renovations. In an unusual video statement released Sunday, Powell characterized these actions as "pretexts" for the real issue: pressure over the Fed's interest rate decisions.

Powell emphasized that the Fed sets interest rates "based on our best assessment of what will serve the public, rather than following the preferences of the President." The Fed has maintained its traditional independence from political influence, making monetary policy decisions without bending to political pressures.

Currency and Bond Market Reactions

Concerns about Fed independence and potential long-term inflation impacts affected currency and bond markets. The U.S. dollar weakened against major currencies, while Treasury yields showed modest increases.

Global Market Performance

International markets showed more positive momentum, particularly in Asia where Chinese markets gained on reports of potential economic stimulus measures.

The contrasting performance between U.S. and international markets highlighted the specific nature of domestic political and monetary policy concerns affecting American financial markets.