Weekly market commentary

Market review

Market sentiment remained constructive throughout the week, as earnings season for the first quarter of 2026 kicked off and investors once again focused on corporate fundamentals. Geopolitics haven’t disappeared from the headlines, though. Talks between the US and Iran broke down over the weekend after direct discussions in Pakistan failed to deliver a deal and prompted the US to impose a naval blockade on Iranian ports. However, as the week progressed, commentary from both sides suggested a continued willingness to re‑engage in negotiations, even as the naval blockade remained in place.

Market participants largely read through these developments, with global equity indices extending their recovery, trading back above pre‑conflict levels this week. The S&P 500 edged into positive territory year‑to‑date, having fallen over 7% in March alone. At the same time, oil prices retreated back below $100 per barrel and global government bond yields drifted lower, as concerns about persistent energy‑driven inflation pressures eased.

Earnings season has now begun in the US, led by the large banks, which have provided an initial snapshot of corporate health. Results from the likes of Goldman Sachs, JP Morgan and Bank of America have so far been broadly encouraging. Whilst higher market volatility has supported revenues from their investment banking arms, there has been little evidence from their results so far to suggest a sharp deterioration in credit conditions or loan demand, suggesting higher interest rates are not yet placing significant strain on household finances or corporate balance sheets. However, Wells Fargo, with a greater reliance on consumer banking, struck slightly more cautious tones, noting that rising energy prices are beginning to impact household spending, with consumers reportedly spending materially more on fuel than prior to the conflict.

Outlook

Markets are currently beholden to news flow on the war in the Middle East, with rapidly changing rhetoric stoking volatility. Investors are weighing the implications of the conflict and its duration on macroeconomic factors and assessing what the policy responses may be from governments and central banks in tackling inflationary pressures from energy shortages and fears of slowing growth. Fiscal dynamics, liquidity conditions and shifting policy expectations are likely to reinforce cross‑asset and regional dispersion in the months ahead. Earnings remain solid and despite overall volatility, regional equity markets remain resilient with limited signs of recession presented in data.

Movers table