Equity markets delivered a mixed performance as investors navigated a complex backdrop of rising energy prices, elevated bond yields, and lingering geopolitical tensions. Inflation concerns moved back to the forefront of market discussion, prompting a cautious tone across major trading sessions.
Global markets
US equity performance
The S&P 500 slipped 0.07% and the Nasdaq Composite declined 0.51%, with technology and semiconductor stocks bearing the brunt of the selling pressure. In contrast, the Dow Jones Industrial Average managed a modest gain of 0.32%, supported by strength in energy and financial names.
European and Asian markets
European equities closed mostly higher, with the STOXX 600 advancing 0.3% and the STOXX 50 edging up as financial sector stocks outperformed. Key gainers included Allianz, AXA, Nordea, and Munich Re, while Deutsche Boerse attracted attention following reports of stake-building activity. On the downside, ASML fell sharply amid broader weakness in AI-linked technology stocks.
Asian markets were mixed in Tuesday’s session. Japan’s Nikkei slipped despite stronger-than-expected economic growth data, while the TOPIX advanced. South Korea’s KOSPI dropped sharply amid concerns surrounding Samsung labour relations. Gains were recorded in Australia and Singapore, helped by easing crude oil prices.
Key economic developments
Several notable macroeconomic updates shaped market direction and investor thinking across global trading sessions.
Japan GDP growth
Japan’s economy expanded at an annualised rate of 2.1% in the first quarter, exceeding market forecasts and supported by solid consumer spending and export growth. With inflation remaining above the Bank of Japan’s target, the stronger growth figures reinforced expectations that the central bank may continue gradually withdrawing monetary stimulus, with a possible rate increase as early as June.
Oil prices and geopolitical risk
Brent crude settled above $112 per barrel and WTI crude climbed to nearly $109, both reaching their highest levels in two weeks. The price surge was driven by concerns over potential supply disruptions in the Strait of Hormuz amid heightened US-Iran tensions. However, oil prices subsequently fell around 2% in Asian trading after reports emerged that the US had delayed planned military action and signalled a willingness to continue diplomatic negotiations. An extension of a US sanctions waiver on Russian oil provided additional relief to markets.
Iran peace negotiations
Pakistan has relayed Iran’s revised peace proposal to the United States as efforts to preserve a fragile Middle East ceasefire stall. Tehran reportedly seeks compensation for war damage, an end to US restrictions on Iranian ports, guarantees against further attacks, and a halt to fighting across the region, while resisting demands to dismantle its nuclear programme.
US Treasury yields and the dollar
The benchmark US 10-year Treasury yield briefly reached its highest point since February 2025 before retreating slightly. Persistent concerns that elevated energy costs and stickier inflation could delay Federal Reserve rate cuts, or even prompt future tightening, kept yields supported. The US dollar steadied on Tuesday as the bond market selloff eased, holding broadly stable against major currencies. The Japanese yen weakened despite the positive GDP data, while EUR/USD traded in a narrow range as risk sentiment remained cautious.
Technology and semiconductors in focus
The technology and semiconductor sectors faced notable selling pressure as investors locked in profits following a strong recent rally and positioned themselves cautiously ahead of a high-profile earnings release.
NVIDIA earnings anticipation
NVIDIA shares declined 1.3% ahead of the company’s quarterly results, with the broader semiconductor index falling 2.5%. Market expectations remain elevated for another strong performance, underpinned by robust demand linked to artificial intelligence infrastructure. The results, due mid-week, are widely seen as a key test for the continued momentum in AI-related investment themes.
Seagate and Micron concerns
Additional pressure on the semiconductor space came from Seagate, whose shares fell 7.5% after its chief executive indicated that building new manufacturing facilities would take too long to meet surging demand for memory chips. The company said it would focus on technology upgrades instead, targeting compound annual growth in the mid-20% range through higher-capacity drive formats. Seagate expects its HAMR technology to account for 50% of adoption by 2026.
Corporate earnings and notable company news
Despite the cautious macro environment, corporate earnings season has continued to deliver broadly positive results, with approximately 84% of reporting companies beating expectations. Profit growth has broadened beyond technology, with communication services, materials, and energy sectors all posting solid year-on-year gains.
Google and Blackstone AI venture
Google and Blackstone announced plans to jointly launch a new artificial intelligence cloud venture. Blackstone will invest $5 billion and hold a majority stake in the project, which aims to deliver 500 megawatts of computing capacity by 2027 with scope to scale further. The venture is expected to compete with existing AI infrastructure providers while strengthening Google’s ability to commercialise its proprietary AI chip technology.
OpenAI and Elon Musk legal dispute
A US jury ruled in OpenAI’s favour, determining that Elon Musk’s lawsuit was filed outside the statute of limitations rather than adjudicating on the substantive allegations. Musk has announced his intention to appeal, with the case centring on claims that OpenAI and its chief executive Sam Altman departed from the organisation’s founding nonprofit mission in favour of commercial interests and investor returns.
Ryanair withholds full-year guidance
Ryanair declined to issue a full-year profit forecast, citing uncertainty around Middle East tensions, fuel price volatility, and limited forward booking visibility. The airline reported record annual profits and growth in passenger numbers but cautioned that higher fuel costs could weigh on margins in the near term. Ryanair expects passenger traffic to grow next year while acknowledging softer short-term fare conditions.
Prudential enters Indian life insurance market
Prudential plc agreed to acquire a 75% controlling stake in Bharti Life Insurance for $389 million, representing the company’s first controlling interest in an Indian life insurer. The deal could rise to $623 million subject to conditions. Prudential intends to pursue distribution partnerships with Bharti Airtel and 360 ONE and plans to reduce its stake in ICICI Prudential Life below 10% to satisfy regulatory requirements.
Standard Chartered cost reduction programme
Standard Chartered announced plans to reduce more than 15% of its corporate functions headcount by 2030 as part of a wider effort to streamline operations and improve profitability, reflecting continued reform progress under CEO Bill Winters. The bank is targeting a return on tangible equity of approximately 18%, high-teens earnings per share growth between 2025 and 2028, and a dividend payout ratio of at least 30%.
Uber increases stake in Delivery Hero
Uber more than doubled its holding in Germany’s Delivery Hero to approximately 19.5%, becoming the company’s largest shareholder with a position valued at around 1.7 billion euros. The ride-hailing company also holds options for an additional 5.6% stake, which could give it a blocking minority interest. Uber stated it does not intend to launch a full takeover bid. Delivery Hero shares rose 5.6% on the news.
Commerzbank rejects UniCredit takeover offer
Commerzbank formally rejected UniCredit’s takeover bid, with its board advising shareholders not to accept the offer. The bank characterised the proposal as undervaluing the lender, vague in its terms, and carrying significant strategic risks. UniCredit has continued to build its stake toward approximately 30% as the cross-border banking dispute escalates.
Lululemon and founder proxy dispute
Settlement discussions between Lululemon Athletica and founder Chip Wilson broke down after Wilson’s demands escalated to include three board appointments and regular meetings with the incoming chief executive. Wilson has been vocal in criticising what he describes as the brand’s declining appeal and continues to campaign for board changes ahead of the company’s annual meeting next month.
ACS to invest €1.8bn in digital infrastructure
Spanish firm ACS said it will invest approximately €1.8 billion in digital infrastructure, including data centres, chip facilities, and AI-related projects. Funding will come from a capital increase of approximately 2% of share capital alongside €1.1 billion from terminated equity swaps. Major shareholders, including Florentino Pérez and Criteria, will participate to maintain their stakes.
Analyst ratings and market outlook
RBC Capital Markets S&P 500 target
RBC Capital Markets set a 12-month price target of 7,900 for the S&P 500, implying moderate upside from current levels. Analyst Lori Calvasina flagged the potential for near-term volatility while noting limited downside risk unless recession concerns return. The outlook is premised on continued AI-driven earnings growth, stable Federal Reserve policy, and steady bond yields, with a preference for growth-oriented stocks over value and US equities over international peers.
JPMorgan gold price forecast revision
JPMorgan revised its 2026 gold price forecast lower, citing reduced investor demand, softer inflows into gold-backed exchange-traded funds, and slower central bank purchasing. The bank maintained a constructive longer-term view, arguing that geopolitical risks, fiscal pressures, and US policy uncertainty will continue to underpin prices. Analysts suggested that an easing of Iran-related tensions could stimulate fresh demand and lift gold prices later in the year.
Citigroup technology and defence upgrades
Citigroup raised price targets for both Intel and AMD following the introduction of a new server CPU market model, projecting the market to reach $131.5 billion by 2030 driven by demand from agentic AI applications. Intel is expected to lead market share gains, while AMD is seen benefiting from data centre growth and broader AI accelerator adoption.
On the defence side, Citigroup upgraded Rheinmetall to “buy” and raised Saab to “neutral”, arguing that recent share price declines in European defence equities are excessive and that the sector’s longer-term growth potential remains intact despite near-term uncertainty.
BofA software sector views
Bank of America initiated coverage of ServiceNow with a Buy rating, highlighting the company’s AI-driven workflow capabilities as a driver of sustainable revenue growth, margin expansion, and cash generation. The bank reinstated Salesforce as Underperform, warning that AI automation trends, slower customer growth, limited upselling opportunities, and competitive pressures will constrain the company’s ability to monetise its enterprise customer base over the longer term.
Other notable analyst actions
HSBC upgraded both Shell and Repsol to Buy, citing stronger cash generation, improved earnings momentum, and higher oil price assumptions. Repsol’s refining margins and cost discipline are expected to support higher cash flow and shareholder returns, while Shell benefits from recent acquisitions and production growth.
Zscaler shares over 8% after B.Riley upgraded the stock from Neutral to Buy, pointing to strong demand for secure access technology, AI-related tailwinds, and an expanding product suite. The analyst also noted that Zscaler’s valuation looked attractive relative to its historical range.
Roblox shares jumped 10% after third-party data showed a week-on-week increase in concurrent users, ending a 30-week declining streak. Analysts attributed the improvement to stronger engagement in top-performing and newer games but cautioned that a single data point is insufficient to confirm a lasting recovery.
Investor Michael Burry disclosed increased positions in MercadoLibre, Adobe, PayPal, Lululemon Athletica, and Zoetis, describing the latter as a “fat pitch” opportunity. He described the broader positioning as a “whale fall”, picking through quieter, overlooked parts of the market away from major headlines and momentum trades.
Upcoming economic data and events
Key releases and events scheduled for Tuesday include UK unemployment figures, US Redbook retail sales data, a speech by Federal Reserve Governor Christopher Waller, US pending home sales, and American Petroleum Institute crude oil inventory data. Major corporate earnings focus will fall on Home Depot, Toll Brothers, CAVA Group, and Vinci.
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