Weekly market commentary

Market review

Global share and bond markets rose over the week as investors reacted positively to developments in the Middle East, despite early uncertainty. Initially sentiment was unsettled after reports that Iran‑backed Houthi forces, an armed group based in Yemen, had launched strikes at Israel, raising concerns that the conflict could spread. There were also reports that the US was considering further action against Iran’s nuclear facilities. These developments initially influenced markets.

However, confidence improved as the week progressed. President Trump indicated he would be open to ending the military campaign against Iran, even if the Strait of Hormuz, a key shipping route that carries around 20% of the world’s oil, remains partly closed. Markets were further encouraged by comments from Iran’s president suggesting the country is willing to end the conflict, provided there are assurances to prevent future attacks. These signals helped US shares rise sharply, with the S&P 500 recording its strongest daily gain since May last year.

Investors closely watched President Trump’s mid‑week address for further clarity. While no new steps were announced, markets continued to interpret the overall direction of travel as constructive, even though uncertainty remains around when the Strait of Hormuz will fully reopen.

Economic data also reflected the impact of higher energy prices. Inflation in the euro area rose to 2.5% in March, driven by rising energy costs linked to the conflict. In the US, manufacturing activity continued to expand, although businesses reported increasing cost pressures. Overall, markets remained resilient in the face of ongoing geopolitical uncertainty.

Outlook

Markets continue to respond to fast‑changing news from the Middle East. While this has led to short term volatility, company earnings remain strong and regional share markets have held up well, with little sign of an economic downturn so far.

Movers table