US markets under pressure amid tech weakness
US equities closed lower on Tuesday, with the Nasdaq underperforming the broader S&P 500. Weakness in technology was driven in part by concerns around artificial intelligence, following reports that OpenAI fell short of internal targets for revenue and user growth. This weighed on AI-related and data centre-focused companies, dragging the wider technology segment lower.
Geopolitical tensions, particularly around the Strait of Hormuz, pushed oil prices higher, with WTI crude rising more than 3.5% towards 100 dollars per barrel.
Sector performance reflected this backdrop, with energy and defensive sectors such as consumer staples outperforming, while technology lagged. Meanwhile, the US 10-year Treasury yield edged higher to around 4.35%.
Despite the pullback, the S&P 500 remains near record highs, having risen roughly 13% since late March, supported by resilient economic data and improving corporate earnings expectations.
Focus shifts to earnings and federal reserve policy
Big tech earnings in spotlight
Several major technology firms—including Microsoft, Alphabet, Amazon, Meta Platforms and Apple—are reporting results. These will be critical in assessing the durability of the artificial intelligence-driven rally.
Early earnings data has been encouraging, with a strong majority of companies beating expectations and overall profit growth forecasts being revised higher.
Interest rate outlook
The Federal Reserve is widely expected to keep interest rates unchanged, as inflation remains above target despite signs of labour market stability. Markets are therefore balancing solid corporate fundamentals against geopolitical uncertainty and persistent inflation pressures, while investors are increasingly focused on whether earnings growth can broaden beyond the technology sector to sustain the rally in US equities. Other central banks are also meeting this week.
Latest market and economic updates
Asia pacific markets mixed
Asian markets traded mixed as investors weighed US-Iran tensions, elevated oil prices, and caution ahead of the Federal Reserve decision. South Korea’s KOSPI rose 0.2%, while Singapore fell 0.6% and Australia slipped 0.3% following strong inflation data. Chinese and Hong Kong markets were firmer, with the Hang Seng up 1% and Shanghai gaining 0.4%.
US futures show modest recovery
US equity futures moved modestly higher early Wednesday, with the S&P 500 and Dow Jones Industrial Average up around 0.2% and the Nasdaq 100 rising 0.4%. The gains follow a weaker session driven by concerns over OpenAI and higher oil prices, while investors now turn their attention to upcoming technology earnings and the Federal Reserve policy decision.
European markets extend losses
European equities fell for a seventh consecutive session, with both the STOXX 600 and STOXX 50 down 0.3%. Energy supply concerns and geopolitical tensions weighed on sentiment. Major decliners included ASML, Siemens Energy, Air Liquide and Bayer, all falling on weak earnings, sector pressure and policy uncertainty.
Currency and commodities update
The US dollar index steadied around 98.6 after earlier volatility, supported by safe-haven demand amid Middle East tensions and stalled US-Iran negotiations. Markets await the Federal Reserve meeting, which is expected to keep rates unchanged, while other central banks also meet this week. The euro-dollar pair is currently at 1.1706, reflecting stable but cautious trading.
Oil prices eased slightly from recent highs, with Brent crude around 110 dollars per barrel and WTI near 99 dollars. Markets are assessing the OPEC exit by the United Arab Emirates, while disruption in the Strait of Hormuz and stalled US-Iran talks continue to support prices and limit downside.
Geopolitical developments impacting markets
Donald Trump has reportedly directed aides to prepare a prolonged blockade of Iran, aiming to intensify pressure on its economy by restricting oil exports and shipping. The move follows a ceasefire but ongoing tensions after rejecting proposals over nuclear terms. Officials warn this approach risks a prolonged stalemate with limited diplomatic progress.
Equities on the move
Key company highlights
Robinhood Markets
Reported first-quarter earnings per share of 0.38 dollars versus 0.41 expected, and revenue of 1.07 billion dollars versus 1.17 billion. Shares fell 9.3% after hours. Despite this, revenue rose 15% year-on-year, driven by stronger trading activity and higher net deposits and customer growth.
Booking Holdings
Cut its annual revenue growth outlook to high single digits from low double digits, citing weaker travel demand linked to Middle East conflict. Shares fell more than 4% after hours. First-quarter revenue rose 16% to 5.53 billion dollars, while earnings beat expectations. Growth in room nights was also reduced by disruption to travel patterns.
Visa
Reported profit of 3.31 dollars per share versus 3.10 expected, sending shares up by 5% in extended trading. Revenue was supported by a 9% rise in payments volume and 12% growth in cross-border activity. The company raised guidance and announced a 20-billion-dollar buyback programme.
T-Mobile US
Reported EPS of 2.27 dollars versus 2.05 expected and revenue of 23.11 billion dollars versus 22.97 billion. Growth was driven by strong postpaid customer additions and higher service revenues. Despite lower net income due to merger costs, the company raised full-year guidance and saw improved cash flow.
S&P Global
Reported EPS of 4.69 dollars and revenue up 10% to 4.17 billion dollars, supported by strong demand for data and risk analytics amid geopolitical uncertainty. Growth was driven by strength in ratings and market intelligence segments. Shares were down by the end of the trading session.
Seagate Technology
Reported EPS of 4.10 dollars and revenue of 3.11 billion dollars, both ahead of expectations, with revenue up 44% year-on-year. The company also issued upbeat fourth-quarter guidance above consensus, driving an 18.6% after-hours gain, supported by strong margins, cash flow and shareholder returns.
Spotify
Reported revenue of 4.53 billion euros and EPS of 3.45 euros, with monthly active users rising 12% year-on-year to 761 million. Despite strong results, shares fell over 12% after guidance for second-quarter operating income of 630 million euros missed forecasts.
Starbucks
Raised full-year 2026 guidance, expecting comparable store sales growth of at least 5% and EPS of 2.25 to 2.45 dollars. Second-quarter results beat expectations, with revenue up 9% to 9.5 billion dollars and EPS of 0.50. CEO Brian Niccol’s turnaround strategy boosted traffic and improved margins.
General Motors
Reported EPS of 3.70 dollars versus 2.61 expected and revenue of 43.6 billion dollars versus 43.38 billion. Shares rose 1.3% following the update. The company raised full-year 2026 earnings guidance, supported by stronger North American performance, tariff-related adjustments, and improved operating margins.
UPS
Reported EPS of 1.07 dollars versus 1.03 expected and revenue of 21.2 billion dollars versus 20.97 billion. Shares fell around 4% following the results. The company reaffirmed full-year guidance, maintained its revenue outlook of 89.6 billion dollars, and continues to expect stable capital spending and margin improvement.
Airbus
Reported adjusted operating profit of 300 million euros, down 52% year-on-year and below expectations, as aircraft deliveries fell due to engine supply constraints. Revenue declined to 12.65 billion euros. The company maintained full-year guidance but faces delays from suppliers. Despite this, demand for fuel-efficient aircraft remains strong.
BP
Reported underlying profit of 3.2 billion dollars, beating expectations of 2.67 billion and more than doubling year-on-year results. Gains were driven by strong trading and midstream performance. The company maintained its dividend and full-year capital spending plans while signalling lower second-quarter production due to maintenance and disruption.
Elon Musk / OpenAI
Elon Musk testified in a trial accusing OpenAI and its leaders of abandoning its charitable mission for profit. He is seeking 150 billion dollars in damages and structural changes to restore nonprofit control. OpenAI argues Musk pursued control and later created rival xAI. The case highlights disputes over AI safety, funding and governance.
Ryanair
CEO Michael O’Leary warned that European airlines could face bankruptcy if elevated jet fuel prices persist through the summer. He noted fuel has risen from around 80 dollars to 150 dollars per barrel following the Strait of Hormuz blockade. Ryanair is largely hedged and expects potential competitor failures, which could strengthen its market position.
Pernod Ricard / Brown-Forman
Merger talks were terminated after the firms failed to agree on terms. Pernod Ricard said it remains focused on its strategy and long-term growth. Brown-Forman shares fell about 4% in extended trading following the announcement.
Analyst ratings and market insights
HSBC strategy update
HSBC upgraded US equities to overweight from neutral, citing strong earnings momentum and resilient fundamentals, while downgrading Europe ex-UK to neutral due to weaker activity and higher energy risk. The broker highlighted 84% of US earnings beats and rising buybacks. It favours banks, insurance and technology, upgraded basic materials, and downgraded healthcare and industrials.
Micron technology
Initiated with a Buy rating and a 1000-dollar price target by D A Davidson, implying strong upside. The broker argues artificial intelligence is extending the memory cycle by boosting sustained demand. It highlights multiyear supply agreements, strong node leadership, and rapid growth in high-bandwidth memory.
Siemens
Upgraded to Buy by HSBC with a price target of 300 euros from 240 euros, driven by improving industrial automation demand. The broker highlighted rising adoption of physical AI in manufacturing and strong momentum in smart infrastructure, supported by electrification and data centre growth.
Saint-gobain
Upgraded to outperform by RBC with a 95 euro price target, implying 23% upside. The broker cited stronger pricing power, improving US roofing demand, and acquisition capacity, noting shares trade at a discount to historical averages.
Upcoming data and events
Key economic indicators
US durable goods orders, housing starts, building permits, and crude oil inventory figures from the EIA.
Federal reserve decision
The Federal Reserve is expected to hold rates steady, with a press conference from Chair Jerome Powell.
Earnings to watch
Alphabet, Microsoft and Meta Platforms, alongside major global banks and healthcare firms.
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