Market developments
Equities: Global equity markets posted broad gains this week, with the S&P 500 on track for its eighth consecutive weekly advance. The rally was driven by two dominant themes: sustained enthusiasm for AI-linked stocks and growing optimism around a potential US-Iran peace deal. European equities also had a strong week, with the Stoxx 600 rising 3% over five straight sessions of gains, led by tech and banking stocks.
Fixed Income: Government bond markets came under significant pressure this week, with yields rising sharply before partially retreating. The 30-year US Treasury yield hit 5.20% on May 19, its highest level since mid2007. The trend was global, with yields on UK gilts, German Bunds and Japanese government bonds all rising in tandem.
Commodities: Oil remained elevated and a central market theme throughout the week, with Brent crude trading above $100 per barrel and WTI around $95/bbl by Friday afternoon. However, Brent slipped roughly 5% on the week as Middle East ceasefire hopes eased some of the geopolitical risk premium. Gold remained in a downtrend, pressured by elevated oil prices and rising yields.