Contents
Market review
Equity markets have been broadly flat over the past week, with investors taking a more cautious, “wait and see” approach following a strong run in recent months. While US indices remain close to all-time highs, overall performance across regions has been mixed.
Geopolitics remain firmly in focus, with developments in the US-Iran relationship continuing to drive volatility in oil prices and broader risk sentiment. Investors are weighing the potential for a negotiated outcome against the risk of further escalation, with each headline prompting short term moves across markets. At the same time, attention is building ahead of a busy period for central banks, with key policy decisions from the European Central Bank, the Federal Reserve and the Bank of England all scheduled over the coming weeks.
Another notable theme is the resurgence of the IPO market. Reports that SpaceX could launch a public offering later this month — potentially the largest in history — have drawn significant attention, alongside a broader pipeline of large technology and AI related listings. This reflects both strong investor demand for growth opportunities and the increasing capital requirements of next generation industries such as artificial intelligence.
Encouragingly, the underlying corporate story remains supportive. Recent earnings updates and company guidance continue to highlight robust investment in areas such as AI and digital infrastructure, helping to underpin longer term growth expectations. While markets may remain somewhat reactive in the near term as investors await greater clarity on geopolitics and central bank policy, the combination of resilient economic activity, steady corporate fundamentals and ongoing innovation provides a constructive backdrop for investors.
Outlook
We continue to view the macroeconomic backdrop as supportive, with resilient consumer demand, solid earnings and positive corporate guidance underpinning a constructive outlook for growth. While markets have already priced in a good degree of optimism—particularly around easing geopolitical tensions—we still expect equities to deliver positive returns over time. In the near term, a strong run in risk assets may leave markets more sensitive to new information, suggesting upside is likely to be more gradual. However, the combination of steady economic activity, ongoing corporate investment—particularly in technology and infrastructure—and healthy balance sheets provides a firm foundation for markets.
Movers table
Equities |
1 Week |
YTD |
1 Year |
|---|---|---|---|
S&P 500 |
0.09% |
11.36% |
29.26% |
FTSE 100 |
-0.22% |
6.34% |
21.66% |
Euro Stoxx 50 |
0.56% |
6.75% |
14.94% |
MSCI Asia Pacific ex Japan |
0.54% |
26.46% |
48.21% |
MSCI China |
1.36% |
-7.24% |
4.53% |
Source: Bloomberg as at 10:05am on 05.06.2026
This content has been prepared by M&G Life Investment Office (LIO) for information purposes only and does not contain or constitute investment advice. Information provided herein has been obtained from sources that LIO believes to be reliable and accurate at the time of issue but no representation or warranty is made as to its fairness, accuracy, or completeness. The views expressed herein are subject to change without notice. Neither LIO, nor any of its associates, nor any director, or employee accepts any liability for any loss arising directly or indirectly from any use of this document. The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back less than the original amount invested and past performance information is not a guide to future performance.
‘M&G Life Investment Office (LIO)’ includes the team formerly known as Prudential Portfolio Management Group (PPMG), Prudential Portfolio Management Group Limited, is registered in England and Wales, registered number 2448335.
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