Markets pushed further into record territory last week before momentum finally began to show signs of strain as rising bond yields, renewed inflation concerns and geopolitical uncertainty triggered a sharp late-week reversal across risk assets. The S&P 500, Nasdaq and Dow Jones Industrial Average all climbed to fresh all-time highs during the week, supported by resilient corporate earnings, continued enthusiasm surrounding artificial intelligence investment and generally stronger-than-expected US economic data.
Markets moved into a more cautious phase last week as persistent inflation, rising sovereign yields and renewed energy volatility challenged the softer “goldilocks” narrative that had supported risk appetite through April and early May. While economic activity remained relatively resilient across major economies, stronger-than-expected US inflation data and surging oil prices forced investors to reassess the likelihood of near-term policy easing. The result was a broad repricing across bonds, currencies and equity sectors, with markets increasingly focused on inflation persistence rather than growth optimism alone.
Markets moved toward a more constructive tone last week, as resilient growth and moderating inflation supported a gradual rotation back into risk assets.
Global markets stabilised last week as policy divergence returned to focus. US resilience continued to support risk sentiment, while Europe and Asia lagged, reinforcing a more selective market environment.
Global markets turned more cautious last week as renewed Strait of Hormuz tensions lifted oil prices and challenged the recent rotation into growth assets. US equities remained relatively resilient, while Europe and China lagged amid softer growth signals and renewed energy sensitivity.
