Technology

The International Monetary Fund has downgraded its global growth forecast for 2026 from 3.3 to 3.1 percent, citing the impact of the United States-Israeli war on Iran and the shutdown of the Strait of Hormuz on the world economy.

The war has damaged energy infrastructure across the Gulf, while critical exports like oil, gas, chemicals and fertiliser remain largely stranded by Iran’s shutdown of the strait and the subsequent US naval blockade of Iranian ports.

In the worst-case scenario of a prolonged war, the IMF said global growth could fall to 2.5 percent in 2026, with low-income and developing economies hit the hardest by soaring commodity and energy prices. The global shipping and logistics industry is facing a separate crisis.

But every economic crisis also has beneficiaries: despite the dire macroeconomic outlook, some corners of the global economy are thriving on the uncertainty.

Here’s a look at five industries that are doing well either despite – or because of – the darkening economic outlook.

Wall Street investment banks

Global investors have been on a rollercoaster since the start of US President Donald Trump’s second term last year. The president’s erratic decision-making, where he often issues an ultimatum one day and then changes it the next, has led traders to coin the term “TACO trade”, where TACO stands for “Trump Always Chickens Out”.

The recent volatility has made some investors anxious, but it’s been a boon to investment banks, which make millions in commissions and revenue from the surging volume of trade, according to Sean Dunlap, a director of equity research at Morningstar Research Services.

“Clients want to reposition, so they trade frequently,” he told Al Jazeera. “Spreads tend to increase, which increases the profitability for trade intermediaries like banks.”

First-quarter results for 2026 – released this week – showed that Morgan Stanley reported a profit of $5.57bn, up 29 percent year on year, while Goldman Sachs reported a profit of $5.63bn, up 19 percent year on year.

JP Morgan Chase also reported major gains, with first-quarter earnings of $16.49bn, up 13 percent year on year. The banks all cited high levels of trading, deal-making, and “robust client engagement” as the reasons behind surging profits.

The boomtime for banks could reverse course, however, if volatility persists for too long, Dunlap warned, because investors may become increasingly cautious and less willing to borrow money to make trades.

Prediction markets

As mainstream Wall Street banks reap profits, the crypto-based prediction platform Polymarket has been earning upwards of $1m a day since the start of the month by letting users make peer-to-peer bets on everything from sports tournaments to elections.

Polymarket has been doing well since the start of the war, but it revised its fee structure on March 30 to cash in even more on its popularity.

Rival platforms like Kalshi, Novig and Robinhood also follow the same business model, but Polymarket has been the standout winner of 2026 because it controversially allows users to bet on the outcome of conflicts like the Iran war.

Polymarket revised its fee structure on March 30 to cash in on its popularity. The change has already netted the platform more than $21m in fees since April 1, up from $11.6m for all of March and $6.23m for all of February, according to DefiLlama, a website that provides data analysis for decentralised finance platforms.

If the current trend continues, Polymarket could make $342m in fees this year alone, according to DefiLlama’s analysis.

Anonymous users have also made millions correctly predicting the dates of major events like the US-Iran ceasefire, but the outcomes for rank-and-file users are typically less impressive.

Researchers found that the top 1 percent of Polymarket users captured 84 percent of all trading gains, according to a new report released this month analysing 70 million trades from 2022 to 2025. The returns are so high that US federal regulators have pledged to crack down on insider trading in prediction markets following suspiciously well-timed bets on Iran war outcomes.

Aerospace and defence

Unsurprisingly, the aerospace and defence industries are booming this year due to major conflicts in Ukraine, Iran, Sudan, Gaza and Lebanon and a surge in global defence spending.

About half of the world’s countries have increased their military budgets over the past five years, according to an April report from the IMF, which means they are also buying everything from drones to missiles — more than ever before. Demand is growing particularly fast in Europe, where NATO countries have committed to raising defence spending to 5 percent of gross domestic product (GDP) by 2035.

The defence industry has, in turn, seen major gains on the stock market. The MSCI World Aerospace and Defence Index – which tracks aerospace and defence stocks across 23 global markets – reported net returns of 32 percent year on year at the end of March.

The defence index outpaced the MSCI World Index, which tracks 1,300 large and mid-cap companies across the same 23 markets. The index, which gives a broader overview of global stock markets, reported net returns of 18.9 percent over the same period.

Artificial intelligence

Last year, the United Nations Trade and Development (UNCTAD) office predicted that the AI industry would grow from $189bn in 2023 to $4.8 trillion by 2033, and the Iran war does not seem to have dented the outlook.

“Despite the shocks from the Iran war, we’re still seeing resilience in a lot of sectors like artificial intelligence and renewable energy,” said Nick Marro, lead analyst for global trade at the Economist Intelligence Unit.

One metric for the AI boom has been the high volume of semiconductor chips still being exported out of East Asia, he said. At the top of the chart is chipmaking powerhouse Taiwan, which reported record-breaking merchandise exports of $80.2bn in March, up 61.8 percent year on year, according to EIU analysis.

The surge was led by exports to the US, which grew by 124 percent year on year, the EIU said.

Taiwan Semiconductor Manufacturing Company, the world’s top chipmaker better known by its acronym “TSMC,” on Thursday posted a net income of 572.8 billion New Taiwan Dollars (NTD) ($18.1bn) for the first three months of 2026 – up 58 percent year on year in NTD.

Another metric, initial public offerings or “IPOs,” also shows that the industry is confident for the moment, with industry leaders Anthropic and OpenAI both planning to go public this year.

Renewable energy

The Iran war has highlighted the need to transition from fossil fuels not only for environmental reasons, but also for reasons of energy security. The war marks the third major energy shock this decade, following the COVID-19 pandemic and the 2022 Russian invasion of Ukraine.

The Iran war has “boosted” renewable energy “given the urgency to switch away from fossil fuels and diversify towards renewable sources,” Marro of the EIU said.

Even before the Iran war began, the International Energy Agency reported that global governments were already taking active measures to invest in renewable energy for geopolitical reasons.

According to an IEA report released this month, “150 countries have active policies to advance renewable and nuclear deployment, 130 have energy efficiency and electrification policies, and 32 have policies to incentivise supply chain resilience and diversification across critical minerals and clean energy technologies.”

The Iran war has triggered another flurry of policymaking in Asia, which typically buys 80 to 90 percent of the oil and gas that transits through the Strait of Hormuz. Since the shutdown, the region has been struggling to find alternative sources of energy, forcing governments to deploy emergency measures like fuel rationing and price caps.

South Korea, Thailand, India, Cambodia, Indonesia, Vietnam and the Philippines have all announced a variety of measures from tax breaks for at-home solar panels to commissioning new renewable energy projects – and even restarting nuclear reactors.

The surge in policymaking has been good for the renewable industry. The S&P Global Clean Energy Transition Index, which tracks 100 companies that produce solar, wind, hydro, biomass and other renewable energy across emerging and developed markets, is up 70.92 percent year on year.

April 16 (UPI) — British Prime Minister Keir Starmer put the big five social media firms on notice Thursday that he was considering state intervention, including the nuclear option of a ban, if they did not do more to protect children from being harmed by their products.

Starmer warned executives from Meta, Snap, Google, TikTok and X at a meeting in Downing Street that something had to give, saying a ban on children accessing their platforms would be “preferable to a world where harm is the price” for social media use.

“Things can’t go on like this, they must change because right now social media is putting our children at risk. In a world in which children are protected, even if that means access is restricted, that is preferable to a world where harm is the price of participation,” said Starmer.

“I am determined we will build a better future for our children, and look forward to working with you on this. I do think this can be done. I think the question is not whether it is done, the question is how it is done,” he added.

Executives attending the meeting included Google U.K. managing director Kate Alessi, Markus Reinisch, a public policy principal at Meta, and X’s global government affairs director Wifredo Fernandez.

TikTok was represented by Alistair Law, director of public policy for northern Europe, while Snap was represented by Europe president Ronan Harris.

Starmer put to the firms the negative impacts of social media use on children’s ability to concentrate, their sleep, relationships and the way they view the world that have been flagged by parents and child experts.

“It’s clear to me that parents aren’t asking us for tweaks at the edges, they’re asking us whether a system that clearly isn’t working for children should be allowed to continue at all. Companies have to grip this and work with us to do better by British children,” he said.

No. 10 had earlier acknowledged that some of the tech firms had “stepped up” by disabling autoplay of videos for children by default and providing better tools to parents to limit the amount of time their children spend looking at screens, but took a much tougher line at Thursday’s meeting.

Starmer’s Labour administration has previously pushed back on pressure from parents, educators and child safety advocates for an Australia-style ban for children younger than 16 on fears it could drive them onto the dark web and make them more vulnerable when they eventually begin using the apps by hindering development of their digital skills.

Most social media sites operating in Britain do not permit children younger than 13 to use their products.

However, in the past three months, Starmer’s administration has twice been forced to use its House of Commons majority to override two efforts by the House of Lords, the upper chamber of Parliament, to amend a government bill to include a ban for children younger than 16.

The most recent of these was on Wednesday in which the government defeated the Lords’ latest attempt to force through a ban, but with a reduced majority from the previous vote on March 10. More than 240 of 650 MPs either failed to show or abstained.

In January, 60 Labour Party backbenchers signed a letter urging Starmer to bring forward a ban.

The government managed to fend off the first challenge in March by launching a three-month public consultation on how to proceed with anticipation inside his administration growing that Starmer will yield to pressure for a ban when the findings are published in the summer.

ASML occupies a critical position in the global semiconductor supply chain as the sole producer of extreme ultraviolet lithography systems. These machines are essential for manufacturing the most advanced chips used in artificial intelligence applications. As demand for AI computing has surged, driven by data centre expansion and high performance processing needs, the semiconductor industry has entered a new investment cycle focused on capacity growth.

Strong earnings and upgraded forecast

ASML reported first quarter earnings that exceeded expectations and raised its 2026 revenue outlook to between 36 billion and 40 billion euros. This revision signals stronger than anticipated order inflows and reinforces the scale of demand emerging from the AI sector.

The company’s performance reflects a broader trend in which chip demand is outpacing supply. According to CEO Christophe Fouquet, customers are accelerating expansion plans well beyond the near term, indicating confidence in sustained AI driven growth.

ASML as a strategic enabler of AI growth

Investors increasingly view ASML as a foundational player in the AI ecosystem rather than a conventional manufacturer. Its tools are used by leading chipmakers such as TSMC, which produces advanced processors for firms like Nvidia and Apple.

This positioning places ASML at the upstream end of the value chain. Instead of competing in chip design or production, it supplies the essential infrastructure that enables both. As a result, its growth is tied to the entire semiconductor sector rather than any single company.

Supply constraints and industrial limits

Despite strong demand, structural constraints remain significant. Semiconductor fabrication plants require years to build and involve complex global supply chains. ASML itself faces production bottlenecks due to the precision and cost of its machines, which can reach hundreds of millions of dollars per unit.

Even with plans to increase shipments of its leading systems in 2026 and 2027, capacity expansion is gradual. This creates a persistent imbalance where demand continues to exceed supply, reinforcing pricing power across the industry.

Geopolitical and regulatory risks

A key uncertainty for ASML lies in export controls, particularly regarding sales to China. Proposed restrictions in the United States, including the MATCH Act, could limit the company’s ability to supply Chinese customers. Currently, China represents a significant portion of ASML’s revenue.

However, the global shortage of advanced chips may mitigate this risk. Reduced access to one market could be offset by demand from others, especially as countries and companies compete to secure semiconductor supply chains.

Market response and valuation concerns

ASML’s share price has risen sharply, reflecting investor optimism around AI driven growth. The company is often described as a “picks and shovels” investment, benefiting from the broader expansion of the industry regardless of which firms dominate end products.

At the same time, analysts caution that valuations are elevated. The current pricing assumes sustained high growth, leaving limited room for setbacks related to supply constraints or regulatory changes.

Analysis

The upgrade in ASML’s forecast highlights a structural shift rather than a temporary cycle. AI is not only increasing demand for chips but also reshaping the entire semiconductor value chain. ASML’s monopoly in EUV technology gives it a unique strategic advantage, effectively making it a gatekeeper for next generation chip production.

However, this dominance also exposes the company to geopolitical pressures and operational challenges. The interplay between technological leadership, supply limitations, and regulatory dynamics will determine whether current growth trajectories can be maintained.

ASML’s stronger outlook underscores the depth of the AI driven semiconductor boom. While demand momentum remains robust, the company operates within a constrained and politically sensitive environment. Its future performance will depend on balancing rapid industry expansion with the physical and geopolitical limits shaping the global chip ecosystem.

With information from Reuters.