Oil surges past $126 as Strait of Hormuz blockade challenges AI driven markets.
This week @ 15:25pm Friday 1st May in London.
Markets:
- FTSE 100 fell 0.4% this week to 10,337, weighed down by weakness in banking stocks after NatWest missed expectations and AstraZeneca declined following a negative FDA advisory panel vote.
- S&P 500 rose 1.4% this week to 7,265, powered by blowout earnings from mega-cap technology names and first-quarter profits tracking over 20% year-over-year growth.
- Nasdaq Composite rose 1.3% this week to 25,152, as renewed enthusiasm for artificial intelligence infrastructure spending propelled technology stocks to record highs.
- Euro Stoxx 50 rose 1.1% this week to 5,882, snapping an eight-session losing streak and finishing April up 5.6% for its best monthly performance since January 2025, though most continental bourses were closed Friday for May Day.
Bonds:
- US 10-year Treasury yield rose 5bps this week to 4.39%, as surging oil prices and a hawkish Federal Reserve posture fuelled inflation expectations and prompted markets to price out any rate cuts for 2026.
- UK 10-year gilt yield rose sharply this week to 5.08%, its highest in a month, as the global energy shock compounded domestic political uncertainty surrounding Prime Minister Starmer, adding a fiscal risk premium to UK government debt.
Commodities:
- Brent crude surged 11.6% this week to $110.17/bbl, after briefly hitting a four-year high of $126.41/bbl as the Strait of Hormuz blockade continued to disrupt roughly 20% of global oil and LNG supply.
- Gold fell approximately 1.5% this week to around $4,595/oz, as hawkish central bank signals and higher-for-longer rate expectations offset the metal’s traditional inflation-hedge appeal despite soaring energy prices.
- Copper traded quietly this week amid the energy and precious metals drama, though broader commodity indices reflected strong momentum with the Bloomberg Commodity Total Return Index up 24.4% in Q1 alone.
FX:
- GBP/USD rose 1.1% this week to 1.3646, as the Bank of England’s hawkish hold and sticky UK inflation data supported sterling while the dollar weakened on war-premium concerns and shifting rate expectations.
- GBP/EUR rose 0.6% this week to 1.1580, driven by the pronounced 125bps rate differential favouring the pound and diverging growth outlooks, with the eurozone stagnating while UK GDP recovered to 0.6% in Q1.
Macro:
- US Q1 GDP came in at 2.0% annualised, a meaningful acceleration from the prior quarter’s 0.5%, suggesting the economy regained momentum despite elevated energy costs.
- Federal Reserve held rates steady at 3.50%–3.75% in a notably divided 8–4 vote — the most dissents since 1992 — with three regional presidents opposing the easing bias and Chair Powell indicating the bias could be formally dropped at the next meeting.
- Bank of England voted 8–1 to hold Bank Rate at 3.75%, as policymakers warned of material second-round effects from the energy price shock with UK inflation now at 3.3%.
Companies:
- Alphabet surged roughly 10% on Thursday after reporting its first-ever quarter with revenue exceeding $100 billion and delivering a massive cloud growth beat fuelled by AI momentum, adding a record $421 billion in market capitalisation in a single session.
- Coca-Cola gained nearly 4% on Tuesday after reporting better-than-expected earnings.
What we will be keeping an eye on next week…
w/c 4th May 2026
- The US April non-farm payrolls report on Friday 8th May, with consensus expectations pointing to 73,000 jobs added, a notable deceleration from March’s 178,000 gain.
- The OPEC+ meeting on Sunday, with the UAE’s departure from the cartel effective 1st May adding a significant variable to oil supply dynamics.
Markets move constantly and the numbers in this update will change. This is a snapshot only, pulled together from a range of sources, and is meant as a quick guide rather than a precise record. It’s not investment advice and shouldn’t be used to make trading or investment decisions. If you need more accurate or specific data over a defined period, please get in touch with a member of the team who will be happy to help.
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This article is for information only and does not constitute advice or recommendation and you should not make any investment decisions based on it. The views and opinions of this article are those of Casterbridge at the time of writing and may change without notice. Any opinions should not be viewed as indicating any guarantee of return from investments managed by Casterbridge nor as advice of any nature. It is important to remember that past performance and the value of an investment, and any income from it, may go down as well as up and the investor may not get back the original amount invested.