Commercial Awareness Update: May 23rd 2026

Catch-up: Commercial Awareness Update (12th May) | Deep Dive: Why Private Equity Firms Are Struggling to Exit Investments (14th May)

Hey {{first_name}} 👋!

Most students consume finance news every day.

Headlines. Charts. Opinions. Random posts on LinkedIn. Maybe a few clips on TikTok.

But when an interviewer asks: "What’s going on in markets right now?"

A lot of people suddenly struggle.

Not because they haven’t seen the news, but because reading headlines and actually understanding what’s driving markets are two very different things.

The goal of these weekly updates isn’t to throw ten random stories at you and hope something sticks.

It’s to break down the themes that are genuinely moving markets right now and explain them in a way that actually makes sense.

Because if you can understand the bigger picture and explain why things matter, you're already ahead of most candidates.

In today’s issue, we’re covering:

As always, don’t focus on memorising everything.

Focus on understanding:

Let’s get into it.

Interest rates are still the main thing driving markets right now, and over the past couple of weeks investors have once again been changing their expectations around rate cuts.

Earlier this year, markets expected central banks to cut rates multiple times throughout the year. The thinking was relatively simple: inflation was coming down, economic growth was slowing slightly, and central banks would eventually start easing policy.

The problem is that inflation hasn't fully gone away.

While headline inflation has improved, areas like wages and services inflation are still proving more stubborn than expected. That has brought back a slight “higher for longer” narrative, meaning rates may stay elevated for longer than markets initially hoped.

This matters because markets are constantly trying to price the future. Every inflation report, central bank speech, and economic update changes expectations around where rates could go next.

And because rates influence borrowing costs, valuations, deal activity, and economic growth, even small changes in expectations can move markets significantly.

From an interview perspective, this is still probably the single most important macro topic to understand right now.

The AI conversation is changing.

For most of the last year, markets focused on AI through the lens of software, chips, and big technology companies. The conversation was mainly around who had the best models and who could build the strongest AI products.

Now the focus is becoming much broader.

Investors are increasingly realising that AI infrastructure requires enormous amounts of electricity and computing power. Data centres running advanced AI models consume huge amounts of energy, and demand is expected to rise significantly over the next few years.

That means AI is no longer just a technology story.

It's becoming an infrastructure story.

And potentially an energy story too.

Markets are beginning to ask interesting questions:

Who benefits if AI demand keeps accelerating?

The answer may not just be technology firms. Utilities, power companies, infrastructure businesses, and even certain industrial companies could become major beneficiaries.

This is a very strong commercial awareness topic because it shows you understand second-order effects.

Most candidates stop at: “AI helps tech companies.”

Stronger candidates think: “What industries benefit underneath the surface?”

I started my career at GS. I’ve helped tons of candidates break into GS and other top firms. If you want to maximise your chances of securing world class spring weeks, internships or graduate schemes in the 2026 application cycle (starting soon!) read on…

This month I have 2 slots for my 1-1 coaching programme where I personally coach you to get the best offers possible. It includes:

There’s a 3-month and a 6-month programme. Neither are free given the direct access to my time.

Previous candidates have landed front, middle and back office roles at firms like Goldman Sachs, Citi, J.P. Morgan, BlackRock, PwC, Millennium, Deloitte and others.

Interested? Reply ‘interested’ to this email and I’ll be in touch.

We covered private equity in the recent deep dive, but the story is still developing and it remains one of the more interesting things happening behind the scenes in finance right now.

Private equity firms typically buy companies with the intention of improving them and eventually selling them a few years later through an IPO or another sale. The issue is that many firms bought businesses during the low interest rate era when financing was cheap and valuations were much higher.

Then rates rose.

That changed everything.

Borrowing became more expensive, buyers became more cautious, and IPO markets slowed down significantly. As a result, many firms are now holding portfolio companies for much longer than originally planned.

That matters because private equity firms eventually need to return money back to investors like pension funds and sovereign wealth funds.

In simple terms: The need liquidity.

That’s why continuation funds, secondary transactions, and more creative deal structures have become increasingly common. Traditional exits slowed down, so firms are adapting.

This is a really strong topic because it shows you understand what’s happening beneath the surface rather than just following stock market headlines.

Use these resources to get ahead before application season commences:

Breaking Into Banking | Finance Fast Track

Most students understand interest rates.

Very few understand bond yields.

And right now, bond yields are becoming increasingly important because they’re helping drive market movements again.

At a simple level, a bond is essentially a loan made to a government or company, and the yield is the return investors receive.

Markets pay attention because bond yields often reflect expectations around inflation, growth, and future interest rates.

If investors think inflation will stay elevated or rates could remain high:

→ yields often rise.

If investors think rate cuts are getting closer:

→ yields often fall.

The reason markets care so much is because higher yields can put pressure on equity markets.

Why?

Because if investors can suddenly earn more attractive returns elsewhere, future company earnings become less attractive and stock valuations often come under pressure.

This is why markets increasingly react not just to interest rates themselves, but to where bond yields are moving too.

Talk through your reply and get polished, professional text ready to paste. Wispr Flow strips filler, fixes grammar, and formats everything. 89% sent with zero edits. Works everywhere.

Try Wispr Flow free

China remains one of the most important economies in the world, but the broader recovery still looks uneven.

The property market remains fragile, consumer spending has been weaker than many expected, and confidence hasn’t fully recovered.

That matters because China is not just another economy.

It’s the second-largest economy globally and one of the biggest drivers of:

China is also trying to shift its economic model.

Historically, a large amount of growth came from property and infrastructure. Now policymakers are trying to move toward sectors like technology, AI, and advanced manufacturing.

The challenge is that transitions like this take time.

Markets are watching closely because prolonged weakness in China can feed through into global growth expectations and affect companies all around the world.

That’s 6 sales in 7 months. 29 all time. And the performance?

16.5%, 17.6%, and 17.8%, net annualized returns on sold works held longer than one year (See all 29 at Masterworks.com)

It’s not from stocks, private equity, or real estate… it’s from contemporary and post war art. Crazy, right?

With Masterworks, you don’t need to be a BILLIONAIRE to invest in multi-million dollar art anymore.

Historically, the segment overall has had attractive appreciation and low correlation to stocks.*

Masterworks targets works featuring legends like Banksy, Basquiat, and Picasso, identifying what they believe to have significant long-term appreciation potential, not just at the artist level but at the level of individual artworks.

As one of the largest players in the art market, with $1.3 billion invested over 500 artworks, they pass critical advantages through to their 70,000+ members to add art to their portfolios strategically.

Looking to diversify your investments in 2026?

Click here to skip the waitlist

^{*According to Masterworks data. Investing involves risk. Past performance is not indicative of future returns. See important Reg A disclosures at masterworks.com/cd.}

One of the biggest questions students care about is whether investment banking activity is actually coming back.

The answer right now is: Improving slightly, but still far from peak conditions.

Over the past few years, higher rates slowed M&A activity, reduced IPOs, and made financing more expensive. That created a difficult environment for investment banks and reduced overall deal activity.

Recently though, there have been some signs of improvement.

M&A discussions are picking up. Equity Capital Markets and Debt Capital Markets activity has stabilised. There’s also a growing backlog of companies waiting for stronger conditions before pursuing IPOs.

But markets still feel cautious.

Rates remain relatively high, investors remain selective, and activity levels still sit below previous peaks.

For students, this matters because banking activity eventually feeds into hiring, deal flow, and opportunities across the industry.

A stronger interview answer isn’t: “Investment banking is recovering.”

It’s: “Activity is improving gradually, but a full recovery still depends heavily on interest rates and market confidence.”

If you step back and look at everything we covered today, there’s a common theme running through almost all of it:

Markets are still trying to figure out what the next phase looks like.

Are rate cuts actually getting closer or will rates stay higher for longer?

Is AI going to justify the huge amount of money being invested into it?

Will private equity firms finally be able to unlock exits and generate liquidity?

Can China regain momentum?

And is investment banking genuinely recovering, or are we just seeing early signs of stabilisation?

Right now, markets still feel like they’re in this awkward middle phase.

Things are improving in certain areas, but confidence hasn’t fully returned. Investors are still cautious, central banks are still being careful, and almost every major story eventually links back to the same underlying themes we've been talking about for weeks now: interest rates, inflation, growth, and confidence.

That’s why I keep saying don’t try to memorise headlines.

Focus on understanding the bigger picture.

Focus on:

Because that’s what interviewers are actually testing.

Most candidates can tell you what happened.

Far fewer can explain why it matters.

And that’s usually where the separation happens.

That’s all for now. Catch you soon!

Afzal