Weekly market commentary

Market review

This week, markets were mainly driven by company earnings, especially from major US technology firms. Investors continue to focus on how much these companies are spending on Artificial Intelligence (AI) and how quickly their cloud businesses are growing. Results varied across the sector: companies showing strong demand for cloud services and clear ways to make money from AI have been received more positively. In contrast, those reporting higher‑than‑expected spending or weaker hardware sales, without showing future growth, have seen a more muted market reaction. Overall, demand for AI powered services remains strong, which continues to support confidence in the sector’s long‑term outlook.

In Europe, earnings were similarly mixed. Some industrial and consumer‑focused businesses reported solid results, helped by lower input costs and steady demand. However, areas like luxury goods saw weaker performance as consumers become more selective. There are still areas of strength, particularly among companies with strong pricing power and exposure to global markets.

Central banks also influenced market movements. The US Federal Reserve kept interest rates unchanged, noting improvements in the economy and signs the labour market is stabilising. After three rate cuts last year, the Fed sees little current evidence to justify further cuts, and markets now expect no change until mid‑year. There has also been some volatility as investors look ahead to the decision on who will be the next Fed Chair when Jerome Powell’s term ends in 2026.

The start of the US tax filing season also drew attention. New tax changes are expected to increase total refunds to about $429 billion roughly $100 billion more than last year which could give households a small short‑term boost.

In currency markets, the US dollar and Japanese yen saw sharp moves, driven by differences in U.S. and Japanese economic policies.

Outlook

Markets are closely watching new economic data, which is causing some ups and downs. Geopolitical risks are still in the background, but they are becoming more important. Different countries are seeing inflation and growth move in different directions, so central banks are taking very different approaches to interest rates. Government spending plans and changing market liquidity are also adding to the uncertainty. All of this means we may see bigger differences in how various markets and regions perform in the months ahead.

Movers table