Market Update

Global markets showed resilience this week, with equities largely holding their ground amid a wave of corporate earnings, fresh economic data, and continued geopolitical developments. While the pace of gains moderated compared to the prior week’s rally, investor sentiment remained cautiously optimistic as signals of economic stability and central bank patience helped to offset lingering global uncertainties.
In the U.S., major stock indices posted modest gains as a flurry of corporate earnings reports took center stage. Results from several “Magnificent Seven” firms—including Apple and Amazon—drew mixed reactions, with strong revenue figures often tempered by cautious forward guidance. Overall, earnings season has continued to surprise to the upside. FactSet now reports that 78% of S&P 500 companies reporting so far have beaten analysts’ expectations, slightly ahead of historical averages.
Investors also weighed key economic data, including the U.S. Personal Consumption Expenditures (PCE) price index, which showed a slight uptick but remained broadly in line with expectations. The Fed’s preferred inflation gauge reinforced the view that price pressures are stabilising, bolstering hopes that interest rates may stay on hold for the foreseeable future. Market participants are now pricing in a greater chance of a rate cut later in the year, barring any sharp resurgence in inflation.
Overseas, European markets were buoyed by the release of preliminary Q1 GDP figures for the Eurozone, which showed a modest return to growth after a stagnant end to 2024. However, inflation remains uneven across the region, keeping pressure on the European Central Bank ahead of its next meeting. Meanwhile, Chinese PMI data came in slightly below expectations, raising fresh concerns about the strength of the country’s post-pandemic recovery.
In the UK, the FTSE 100 retreated slightly after an eight-day rally, as weaker-than-expected housing and manufacturing data dented sentiment. Despite this pullback, analysts noted that the index remains near multi-month highs, supported by strength in energy and consumer goods sectors.
Geopolitical developments continued to simmer in the background. While formal trade talks between the U.S. and China have yet to materialise, officials from both sides have reiterated a desire for "constructive engagement." Markets responded positively to indications that high-level discussions may be scheduled in the coming weeks. In Ukraine, diplomatic efforts showed no major breakthroughs, though European leaders reaffirmed support for negotiations under international frameworks.
Looking ahead, investors will be watching for the next round of inflation data, as well as speeches from several Federal Reserve officials. With markets still sensitive to rate policy signals and global economic momentum, the path forward remains data-dependent—but grounded in cautious optimism.