Iran diplomacy lifts equities and sends oil lower as Nvidia signals a new AI era.
This week @ 1515 Friday 22nd May in London.
Markets:
- FTSE 100 rose 2.67% this week to 10,468.08, lifting to its highest level since late April as growing optimism over US-Iran peace negotiations reduced energy cost fears and supported broad market sentiment.
- S&P 500 rose 0.50% this week to 7,445.72, supported by Nvidia’s blowout earnings results and continued AI infrastructure enthusiasm, though fiscal concerns following House passage of Trump’s budget bill capped gains.
- Nasdaq Composite rose 0.67% this week to 26,400.38, driven by strength in semiconductor and AI-related names in the wake of Nvidia’s record revenue quarter.
- Euro Stoxx 50 rose 2.98% this week to 5,197.66, supported by progress in US-Iran diplomacy, a positive luxury sector read-across from Richemont’s full-year results, and a broad recovery in European risk appetite.
Bonds:
- UK 10-year gilt yields fell 25.1 bps this week to 4.90%, the sharpest weekly decline since 2024, as weaker-than-expected retail sales, a widening April budget deficit scaled back expectations for further BoE hikes.
- US 10-year Treasury yields fell 4.3 bps this week to 4.55%, as Iran ceasefire optimism eased safe-haven selling.
Commodities:
- Brent crude fell 4.22% this week to $104.65/bbl, as US-Iran peace negotiations advanced with Secretary of State Rubio citing “some good signs” and both sides indicating gaps had narrowed.
- Gold fell 1.05% this week to $4,514.20/oz, as improving risk appetite on Iran diplomatic progress reduced safe-haven demand, with hawkish central bank signals adding further headwinds.
- Copper rose 0.74% this week to $6.34/lbs, reflecting cautious optimism that a resolution to the Iran conflict could ease the energy shock weighing on industrial activity.
FX:
- GBP/USD rose 0.76% this week to 1.3428, as the dollar weakened broadly on fiscal uncertainty following passage of Trump’s budget legislation and on easing geopolitical risk.
- GBP/EUR rose 0.94% this week to 1.1572, as a sharp deterioration in Eurozone PMI data and growing ECB rate hike expectations pushed the euro lower, outweighing weak UK domestic data.
Macro:
- UK flash PMI (May): The composite index fell to 48.5, a 13-month low and the first contraction in private sector activity since April 2025.
- UK retail sales (April): Fell 1.3% month-on-month, nearly double the 0.6% decline forecast, as rising energy costs weighed on households.
- UK public finances (April): The budget deficit widened to £24.3bn, well above the £20.9bn estimate and the highest April shortfall since 2020.
- Eurozone flash PMI (May): The composite PMI returned to contraction at its fastest pace since late 2023.
Company news:
- Nvidia: Reported Q1 FY2027 results Wednesday evening. Revenue of $81.6 billion (up 85% year-on-year) exceeded the $78.9 billion consensus, and net income of $58.3 billion beat analyst estimates of $42.9 billion. CEO Jensen Huang declared “Agentic AI has arrived,”.
- LVMH: Shares rose this week, lifted by positive read-across from Richemont’s full-year results, which showed sales ahead of expectations.
- ASML: Rose 2.6% on Friday, outperforming the broader market as semiconductor names benefited from Nvidia’s results and sustained confidence in AI-driven chip demand.
What we will be keeping an eye on next week…
w/c 25th May 2026
- 26th May: US Conference Board Consumer Confidence: the May reading will be closely watched following this week’s softness in services PMI.
- 28 May: US April PCE inflation, the Fed’s preferred inflation gauge and a key input ahead of the June FOMC decision.
- 28 May: US Q1 GDP second estimate.
- 28 May: Eurozone Economic Sentiment Indicator and Consumer Confidence: Following the flash reading of -19.0 this week which surprised to the upside relative to expectations of -20.8. Confidence remains well below its long-term average and pre-conflict levels.
- Earnings: Salesforce (27 May, after close); Costco and Dell (28 May, after close).
Enjoy the Bank Holiday weekend
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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