The infoshot to help kick-start your week

Coming up this week:

Federal Reserve Meeting Minutes – Wednesday 8th July

Investors will scrutinise the minutes from the Fed’s latest policy meeting for clues about the future path of interest rates.

Samsung Earnings Results – Tuesday 7th July

The world’s largest memory chipmaker is projected to report preliminary operating profit of 84.3 trillion won for the quarter ended June, according to an average of analysts’ estimates compiled by Bloomberg, marking an 18-fold jump from a year ago to dwarf the company’s profit for all of 2025.

Last week:

US Job Market

US nonfarm payrolls increased by 57,000 jobs in June, missing estimates for around 110,000 and marking the softest reading since February’s fall. Prior months were also revised lower, with May’s gain cut to 129,000 from 172,000 and April’s revised to 148,000 from 179,000. The hiring slowdown was led by the biggest decline in US leisure and hospitality payrolls since 2020. The US unemployment rate ticked down to 4.2%.

AI selloff 

Asian semiconductor stocks tumbled on Thursday, tracking tech losses on Wall Street after Meta’s plan, to develop a business that would sell access to AI computing power, raised worries about overcapacity. Shares of South Korea’s SK Hynix and Samsung slumped about 14% and 9%, respectively. Japan’s memory chipmaker Kioxia plunged more than 13%. The sector was also hit by concerns about rising competition and the potential impact of soaring memory prices driven by AI appetite on earnings growth and demand.

EU CPI

The rate of consumer price inflation in the eurozone fell to 2.8% in June. A reading that was lower than the 3.2% recorded in May and market expectations for 3%. Inflation slowed in some of the region’s biggest economies, including Germany, France, and Italy. Although the headline inflation rate remained above the European Central Bank’s 2% target, the latest inflation data could ease the urgency for the central bank to increase interest rates.

The infoshot to help kick-start your week

Coming up this week:

Copia Capital Quarterly Market Review – 10am Wednesday 

I’ll be joined by our Managing Director, Ian Hooper, for our next Quarterly Market Review. Ian will give a very quick update on Copia before I go through market performance in the last quarter. I’ve also prepared an extended section on AI and tech following all the recent turbulence. If you’re free at 10am on Wednesday, you can register for the 30-minute webinar here.

ECB Forum on Central Banking 2026 – Monday to Wednesday 

This year’s ECB Forum on Central Banking starts today. Central bank governors and academics will discuss topics around growth, AI, digital payments and migration. New Fed Chair, Kevin Warsh, will join Andrew Bailey, Christine Lagarde and Tiff Macklem for the policy panel at 2pm on Wednesday. You can read my thoughts on the challenges facing central banks following the war in Iran here.

Last week:

AI drags US and Asian markets down

In a turbulent week, worries about the US war in Iran took a backseat with the future of AI in the spotlight again.

Tuesday’s tech sell off was sparked by concerns about valuations (seven tech companies currently make up 30% of the US’s main index’s value), high capital expenditure plans, the prospect of higher US interest rates, and some profit taking. SpaceX’s announcement that it’s looking to raise $20bn in a bond sale restarted the conversation around the massive cost of AI spending. The downturn spread across to Asia sending South Korea’s main index down 9.99%, its biggest drop in three months.

On Thursday, Apple raised the price of iPads and MacBooks by as much as 25% to keep up with the soaring cost of memory and storage chips. Apple said in their statement, “We have never seen a component price increase this much, this quickly” and “we have now reached a point where we need to begin raising prices”. According to TrendForce, the price of RAM (Random-access memory) has increased 98% in the first quarter of 2026 and could rise another 63% in the current quarter. Reports later in the week suggested OpenAI are now considering delaying their IPO until next year. SpaceX’s rocky market debut saw them close week two down -13% costing, Elon Musk his trillionaire status, and sparking concerns that OpenAI will struggle to meet Sam Altman’s ambition of a trillion-dollar valuation. Apple’s response to AI inflation, and the OpenAI news, helped kick start another sell off. It carried on into Friday to cap off a five-day losing streak for US markets.

Investors rotated into more defensive sectors like healthcare and real estate, and with Europe’s heatwave dominating the news, various air conditioning and construction stocks performed well last week.

UK markets flat following Starmer resignation 

Here in the UK, markets were relatively flat despite the resignation of yet another Prime Minister. With a leadership change largely priced-in already, UK bond yields fell following a brief spike on Monday.

Reports on Friday suggest Andy Burnham is set to become Prime Minister on Monday 20 July 2026. He’ll deliver his first major policy speech in Manchester this morning. Expect him to provide more detail on how he’ll try to deliver growth across the country via devolution and the transferring of power out of Westminster to local communities.

Hormuz traffic off to a sluggish restart

The Strait of Hormuz tried to start its return to normality last week. Seventy-three vessels left the waterway on Wednesday, the highest number since the war began at the end of February. That was still way below the pre-war numbers where up to 160 ships would sail through the passage every day. However, traffic slowed down again this weekend following renewed strikes by US and Iranian forces.

The infoshot to help kick-start your week

Coming up this week:

Starmer steps down – Today 

As I write this morning, Prime Minister Sir Keir Starmer has just announced his resignation. Following Andy Burnham’s resounding victory in the Makerfield by-election last week, he is expected to take over the reins. This week we’re likely to find out whether he’ll have to fight a full leadership contest or be elected PM without challenge. Potential contender, Wes Streeting has already come out and backed Burnham, simplifying Burnham’s path to number 10.

In the weeks and months ahead, investors will be keeping a keen eye on who Burnham appoints as Chancellor, any plans to deviate from the current fiscal limits, and whether he can repeat his Manchester growth story on a national level. Widely seen as the UK’s fastest growing city, Manchester’s economy has grown by 28% since 2015, more than double the national rate.

US-Iran talks continue – all week 

Peace talks that were scheduled for Friday were delayed after Israel and Hezbollah started exchanging fire again. On Saturday, the Strait of Hormuz was shut by the Iranians after Israeli strikes on Southern Lebanon killed 47 people. In-person negotiations between senior officials started yesterday and lower-ranked officials will continue talks this week. The US and Iran have agreed to a roadmap for finalising a deal within 60 days. The US Treasury is preparing to issue a 60-day wavier of sanctions on Iran, meaning they could sell oil in the meanwhile without the threat of repercussions. Iran’s Foreign Minister, Abbas Araghchi, said yesterday, “the elimination of the conflict in Lebanon [is] the first real test”, and it looks like the success of week one will come down to whether Israel and Hezbollah can show restraint in Lebanon.

Last week:

Interest rate decisions

We had a trio of important interest rate decisions last week. All went as expected.

The Federal Reserve held US interest rates following Kevin Warsh’s first meeting as Fed Chair. With inflation at 4.2% and no real certainty around when a deal with Iran will be concluded, all twelve members of the committee voted to keep rates the same. Interestingly, the Fed released each committee member’s (aside from Warsh’s) predictions for rate changes this year and nine members expected at least one rate increase. In a TV interview, Trump repeated his desire for rate cuts but said Warsh, “is fantastic, and I want him to do whatever he wants.” During Wednesday’s press conference, Warsh declined to say whether he had met with Trump since becoming Chair.

Here in the UK, the Bank of England also elected to keep its benchmark interest rate the same for a fourth time in a row. The Bank’s Governor, Andrew Bailey, said he was encouraged by recent oil price falls but that the war meant “Whatever happens in the future, the higher energy prices of the past four months mean there’s already some inflationary pressure in the pipeline.” Two of the nine committee members voted to increase rates to 4%. Analysts are now favouring no rate changes before the end of the year but will be wary of all the current geopolitical and domestic uncertainty.

On Tuesday, Japan’s main interest rate was raised to a 31-year high of 1%. The Bank of Japan felt forced to react to higher energy prices and their knock-on effect on inflation. It’s the second rate rise since Sanae Takaichi became Prime Minister. Her drive to boost spending in the country has led to her dismissing the idea of hikes in the past. However, so far, she hasn’t expressed any criticism for the Bank’s decisions as they try to combat inflation.

Tech stocks rebound following Intel-Apple deal

US tech stocks rallied last week after the news of a chip-production deal between Intel and Apple lifted both firms and the broader market. Announced by Trump on Thursday, Intel will start manufacturing chips for Apple in the US, helping them diversify their manufacturing base and become less reliant on Taiwanese companies. The US government took a 10% stake in Intel last August.

Ahead of their upcoming IPO, OpenAI’s financials were leaked to independent journalist and blogger Ed Zitron. Verified by the FT, the numbers showed that despite net revenue tripling to $13.1bn in 2025, the company lost $38.5bn. The losses were exacerbated by the company’s change from a non-profit to a for-profit. But to put them in perspective they’re more than double the infamous losses incurred by Meta’s virtual reality division, Reality Labs, in 2024. In other IPO news, don’t expect the recently floated SpaceX to appear in any ESG funds after it was awarded the lowest possible ESG rating of CCC by MSCI. The report cited governance and sustainability concerns and placed SpaceX in the same rating category as Russia after the invasion of Ukraine.

The infoshot to help kick-start your week

Coming up this week:

Interest rate decisions

Kevin Warsh will chair his first US Federal Reserve Committee meeting this week. With inflation at a three-year high due to soaring energy costs, and recent US job numbers beating expectations, the Fed is widely expected to leave interest rates unchanged.

The Bank of England are also expected to hold interest rates when they meet this week. On Friday the European Central Bank (ECB) raised its main deposit rate by 0.25% to 2.25%. The Bank of Japan is expected to follow suit on Wednesday and raise its interest rate by the same margin, taking it to 1%. If you want more information on Warsh’s appointment and the outlook for interest rates, I’ve recently written a longer piece on the subjects which we’ll be publishing later this week.

Last week:

US-Iran peace deal agreed

Investors drew a collective sigh of relief last night after Pakistan’s Prime Minister Shehbaz Sharif announced a deal between the US and Iran to end the conflict in the Middle East. Sharif said both sides had agreed to “the immediate and permanent termination of military operations on all fronts, including Lebanon”.

However, the situation in Lebanon could jeopardise the signing of the deal. Israel’s Defence Minister, Israel Katz, says the IDF plans to stay in Lebanon “without time limits”, whereas Iran’s Foreign Minister, Seyyed Abbas Araghchi has said today that a “complete halt” to Israeli attacks in Lebanon is required. Under the deal, the US blockade of Iranian ports will be removed, allowing the Strait of Hormuz to finally reopen. On Truth Social, Trump posted “Ships of the World, start your engines. Let the oil flow!” According to Trump the strait will reopen when the deal is signed on Friday. However, it could take weeks or months for mines to be cleared and damaged gas facilities to be repaired and transit to return to normal.

Oil prices tumbled after the announcement, falling to around $80 a barrel at the time of writing today. Asian markets reacted positively, with Japan’s leading index up nearly 5% when it closed.

SpaceX completes largest IPO in history

Elon Musk effectively became the world’s first trillionaire on Friday after SpaceX landed on the stock market and exceeded its estimated listing price by 18%. Musk’s majority ownership of class B shares also now means he’ll control over 85% of shareholder voting power. The float is expected to create 4,000 new millionaires among SpaceX’s current and former employees. Normally, early investors and employees would have to wait 180 days before selling their shares; however, they can gradually start selling (initially up to 20%) once SpaceX’s Q2 earnings get released in late July or early August. SpaceX’s valuation finished trading at $2.1tn. Widening operating losses and the AI division’s huge capital expenditure didn’t put off investors. Demand was reportedly four times oversubscribed, leading Senator Elizabeth Warren to call for the IPO to be delayed over “inaccurate or misleading accounting or valuation.”

One of the next AI-related IPO-listing firms, Anthropic, suffered a setback on Friday when its Fable 5 and Mythos 5 AI models were suspended for non-US citizens over security concerns. The ruling by the US Department for Commerce forced Anthropic to disable both models. The company said they think “the government believes it has become aware of a method of bypassing or jail breaking Fable 5”. Reports this weekend suggest rivals at Amazon tipped off the state department about the potential to bypass Fable 5’s safety and security restrictions.

UK economy contracts

The latest release from the Office for National Statistics (ONS) showed the UK economy contracted by 0.1% in April, its first contraction since August 2025. Rising energy costs caused by the conflict in the Middle East were the main downward driver as the services and construction sectors both fell. The contraction will increase the likelihood of the Bank of England keeping interest rates unchanged on Wednesday. 

The infoshot to help kick-start your week

Coming up this week:

Trump to meet AI leaders to discuss government stakes

US President Donald Trump is set to meet leaders of major AI companies this week to discuss the US government investing and becoming a stakeholder. Former Democratic leadership candidate, Bernie Sanders, has been on the road in the last few weeks proposing a government run wealth fund which would take a 50% stake in major AI companies, and Trump didn’t completely dismiss Sanders’ plan when asked, “Where economics are concerned, we have things that aren’t that far apart.” Trump’s comments come as Elon Musk’s SpaceX kick off the AI-IPOs on Friday. SpaceX has set a valuation target of $1.75tn. The company is trying to raise $75bn, nearly three times the amount raised by Saudi Aramco in 2019. On Monday, Anthropic, the owners of Claude AI, filed for their IPO valuing the company at more than $1tn.

OPEC monthly report

The latest OPEC Monthly Oil Market Report (MOMR) is due this weekend. It’ll shed more light on oil demand and supplies now the Strait of Hormuz has been effectively closed for 100 days. With the world burning through 8.7 million barrels of oil a day from global stockpiles, last week, various senior oil executives issued warnings about oil prices and inventories, with ExxonMobil’s Senior Vice President Niel Chapman stating, “We’re approaching unheard of [low] inventory levels.” US crude oil inventories sat at 1.57 billion barrels at the end of May, their lowest level in 22 years.

Last week:

Tech stocks have worst day since Liberation Day

The US tech index fell by more than 4% on Friday as it suffered its worst sell-off since Trump’s Liberation Day tariff announcement in April 2025. Surprisingly strong US jobs data from the Bureau of Labor Statistics kick started the fall. The latest report from the Bureau showed the US economy added 172,000 jobs in May, well ahead of the initial 80,000 estimate. They also revised April’s number upwards from 115,000 to 179,000. The positive numbers mean it’s more likely the Federal Reserve will raise interest rates this year, which might have encouraged investors to flee from AI and tech to safer investments. Healthcare, utilities and consumer staples all saw a boost but with AI-related stocks now accounting for nearly half of the US’s leading index, it wasn’t enough to counter the overall decline.

The sell-off hit leading markets in Asia today. South Korea’s leading index was forced to halt trading for 20 minutes after it plunged 9% when it opened. 

UN and OECD issue warnings

On Wednesday, the UN released a new report on the environmental cost of AI energy use. The report estimates that data centres consumed 448 terawatts-hours of electricity in 2025 with AI-related workloads accounting for 20% of this demand. They estimate this is set to skyrocket to 945 terawatt-hours by 2030. To put this in perspective, the world’s fifth largest electricity consumer, Japan, uses 913 terawatt-hours annually. Data centre water usage is estimated to reach 9.3 trillion litres a year by 2030, enough to meet the drinking needs of everyone on the planet for roughly 1.6 years.

In their latest quarterly update, the OECD cut its 2026 global economic growth forecast down from 2.9% to 2.8%, warning that rising energy prices, geopolitical tensions and inflation will hit the developing world particularly hard and could push several countries into recession.

Trade Department announces new tariffs

The US Trade Department announced new tariffs of between 10% and 12.5% on 60 trading partners, including the UK, EU, Canada and China. They’re attempting to use alleged forced labour failures in the latest attempt to revive Trump’s tariff policy. US trade representative, Jamieson Greer said, “The failure of our most important trading partners to address the importation of goods with forced labour is unacceptable” and creates an “unlevel playing field” which these tariffs would supposedly rectify.

The new tariffs can’t be blocked by Congress and could be implemented in July, subject to comments and review, under Section 301 of the Trade Act of 1974.

The infoshot to help kick-start your week

Coming up this week:

Federal Reserve Beige Book – Wednesday

The Federal Reserve will release its next Beige Book on Wednesday. Published eight times a year, April’s edition showed mixed growth due to price pressures. With the conflict in Iran dragging on and continuing to inflate energy prices it’s likely we’ll see more murky economic conditions.

Andrew Bailey speaks – Tuesday and Thursday

The Bank of England Governor, Andrew Bailey, will speak twice this week. On Friday, in his speech delivered at the Reykjavik 2026 Economic Conference, he said the bank will continue to take a wait-and-see approach over whether the Iran war could trigger interest rate hikes.

Last week:

Ceasefire extension with Trump

Reports that the US and Iran were progressing towards another ceasefire extension pushed oil prices lower and buoyed US markets last week. If signed off by President Trump, the tentative agreement will extend the ceasefire by 60 days and start talks over Iran’s nuclear programme.

However, peace deal optimism took some blows over the weekend following US strikes on radar sites in Iran and Iranian missile attacks on Kuwait. Israel also stepped up their activities in Lebanon, capturing the Beaufort Castle. Today, Benjamin Netanyahu has instructed Israeli forces to bomb southern parts of Beirut. Any deal between the US and Iran will be contingent on Israel ending the fighting in Lebanon. Oil prices have risen 3.5% at the time of writing. The conflict had a major impact on the latest US Consumer Price Index (CPI) numbers which showed inflation accelerated to 3.8% in April, its highest level since May 2023. Energy costs shot up 17.9% with gasoline up 28.4% and fuel oil up 54.3%.

Japan and Korean markets continue to surge

Leading Asian markets surged again last week. Japan’s largest index rose more than 3% taking it to new highs. South Korea’s major index is now up 100% in 2026, with technology companies Micron Technology, SK Hynix and Samsung leading the way thanks to their positions in the AI supply chain. Playing a key role in the AI supply chain has helped Japan and Korea counter the disruption caused by the conflict in Iran and the closing of the Strait of Hormuz. Other South Asian countries like Singapore and Malaysia are also benefiting. They’ve seen exports of electronic goods sharply rise in the last 12 months by 46.4% and 66.7% respectively.

The AI boom is also dominating US market growth again, sending the US information technology sector up 17% in May. To put this in perspective, US materials, industrials, communication services, financials, consumer staples, utilities and energy sectors all fell between-0.01% and -4.80% during the same period.

UK markets down and Milburn interim report released

Falling house prices and energy price concerns dragged our home market down last week. According to Nationwide, average house prices fell 0.6% in May as demand was hit by the prospect of interest rate rises triggered by the war in Iran.

Recently we looked at the latest concerning UK unemployment numbers, which showed 13.5% of young people are not in employment, education or training (Neet). Following on from this, on Wednesday we saw the release of the independent interim report led by former minister Alan Milburn on young people and work. The report found that work opportunities for young people are “shrinking” at an alarming rate with one in six set to be Neet within the next five years. One million Neet young people is estimated to be currently costing the UK economy £125bn a year. The report blames the situation on the Covid pandemic, smartphones and the sharp decline in entry-level and hospitality jobs, and states that there is no evidence of a link between migration and youth unemployment.

The infoshot to help kick-start your week

Coming up this week:

US GDP and inflation data – Thursday 

Analysts will be keeping a keen eye on US GDP and inflation numbers on Thursday. Increases in defence and security spending have kept the GDP forecast at 2%. Thursday’s update to the PCE index will be being studied closely by the Federal Reserve in advance of their next meeting in three weeks’ time.

Peace talks in Qatar

Iranian and US delegates are set to begin new peace talks in Qatar. Despite the impending negotiations, US forces have launched strikes in Southern Iran targeting missile launch sites and mine-laying boats. The talks will aim to reopen the Strait of Hormuz, reach another 60-day ceasefire agreement that also covers Lebanon, and set up further discussions over Iran’s nuclear enrichment programme.

Last week:

US markets break more records despite worries about the economy

Major US markets closed last week at an all-time high thanks to optimism around a peace deal between the US and Iran and more AI enthusiasm. Markets once again seemed immune from broader concerns about the US economy as 30-year Treasury bond yields climbed to their highest level in 19 years, and the minutes from the last Fed meeting highlighted growing concerns around inflation.

The world’s most valuable company, Nvidia, posted stronger than expected earnings on Wednesday. Data centre revenue nearly doubled for the period and revenue beat expectations. CEO Jensen Huang called it “an extraordinary quarter” and said that “demand has gone parabolic” due to the arrival of Agentic AI. However, the record-breaking quarter wasn’t enough for investors. Nvidia’s share price fell during after-hours trading amid concerns about the evolving data centre landscape and major tech firms starting to develop their own chips.  

In other AI news, Elon Musk’s lawsuit against OpenAI, and its CEO, Sam Altman, was thrown out of court last Monday. Musk had accused Altman of deception when he moved OpenAI from a non-profit to a for-profit company. The jury decided that Musk had waited too long to file his case, leaving his claims expired.

UK unemployment rises while vacancies shrink

UK unemployment unexpectedly rose to 5% between January and March. According to ONS director of economic statistics, Liz Mckeown, hospitality and retail sectors “have seen some of the largest falls in vacancies and payroll numbers”.

Job vacancies fell by 28,000 to 705,000 taking vacancies to a five-year low. Firms have been citing economic and geopolitical uncertainty as reasons for halting recruitment. The fall in graduate jobs has continued this year. The jobs platform Adzuna recently estimated there has been a 35% fall in vacancies in the last 12 months. All this has hit younger workers particularly hard, with the youth unemployment rate now at 14.7%, its highest level since 2014.

Japan GDP and inflation data

Japan’s GDP results surpassed analysts’ expectations, posting a 2.1% expansion in Q1, thanks to higher consumption and export numbers. Export growth was helped by a 29.3% increase in semiconductor equipment sales.

Inflation also eased more than expected, down to its lowest level since March 2022. Government action and subsidies in response to the Iran war, saw energy prices fall 3.9% in April.

The infoshot to help kick-start your week

Coming up this week:

Japan GDP and inflation data – Tuesday & Friday 

The Japanese Cabinet Office is due to release Japan’s Q1 GDP data on Tuesday. Analysts are expecting to see a moderate rise largely thanks to AI sector driven growth. The impact of the energy shock caused by the war in Iran is more likely to be visible in Japan’s inflation numbers when published on Friday. Higher energy costs are expected to push up the overall inflation number although energy subsidies and the release of oil reserves should mean the impact is less significant than in other parts of Asia. 

International Research Forum on Monetary Policy 2026 – Monday & Tuesday

Members of the European Central Bank (ECB) and the US Federal Reserve will meet this week in Frankfurt at the 14^th edition of the International Research Forum on Monetary Policy. This year’s programme includes talks on oil shocks, fiscal policy and inflation, and wealth redistribution. This year’s keynote speech is being delivered by Italian economist Giancarlo Corsetti. He’ll be focusing on trade wars, exchange rates and monetary policy.

Last week:

US-China summit

President Trump took an entourage of top US CEOs to Beijing for the latest US-China summit. In his opening night speech at the state banquet, Trump heralded basketball and the popularity of Chinese takeaways as demonstrations of America’s deep ties to China. In quite a stark contrast, President Xi referred to the “Thucydides Trap” to issue a warning to the US about what can go wrong when an established power feels threatened by a rising power.

Trump left Beijing claiming he’d struck “fantastic trade deals, great for both countries” but no breakthroughs or business deals were officially announced. The current trade war truce that was sparked by last year’s Liberation Day tariffs is set to expire in November. President Xi is expected to visit Washington for another summit in September. How much help China has promised to provide regarding the situation in Iran is unclear, however Trump said on Friday that he will consider lifting the sanctions on Chinese firms that purchase Iranian oil.

Markets fall on Friday

Following a record-setting few days for US markets, most major indexes fell on Friday. Concerns over rising bond yields across the globe, a tech selloff, high US inflation data and elevated oil prices may all have had an impact.

30-year bond yields in the US hit their highest level in 12 months, and the UK and Japanese equivalents reached their highest levels since the late nineties. Here in the UK, concerns over the leadership of the Labour Party pushed our home bond markets (Gilts) and the pound down, and the yields on those Gilts up.

The shrinking likelihood of US Fed interest rate cuts and profit-taking caused much of the tech selloff on Friday. The US Consumer Price Index (CPI) data for April showed inflation rose 3.8% annually, the highest jump for three years. The annual rate was 0.1% ahead of expectations. Energy price rises accounted for more than 40% of the gain. The report also showed that average US hourly wages have fallen 0.3% in the last year. Kevin Warsh’s role as Fed Chair was also confirmed by the US senate last week, but with inflation going in the wrong direction it’s looking increasingly unlikely that he’ll be able to cut interest rates anytime soon.

Last night, in amongst a batch of posts containing AI-generated images, including one of himself and a topless alien, Trump took to Truth Social to threaten Iran again, “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” In response, oil prices rose again this morning hitting Asian markets when they opened.

The infoshot to help kick-start your week

Coming up this week:

Trump peace proposal 

All eyes continue to be on the conflict in Iran after President Trump called Iran’s reply to his proposed peace plan “totally unacceptable”. Earlier on last week Trump predicted that the war in Iran will be “over quickly” and said that most people understand his goal of ending Tehran’s nuclear ambitions. But Israeli Prime Minister Benjamin Netanyahu said that Iran’s stockpile of enriched uranium must be “taken out” before the war against Iran can be considered over. Trump had proposed that Iran permit shipping to pass through Hormuz while Washington ends its blockade of Iranian ports, with month-long nuclear talks to follow. Oil rose again on Monday following Trump’s social media posts.

US CPI – Tuesday

US CPI inflation is forecasted to increase from 3.3% in March to 3.7% in April, with the conflict in the Middle East adding another layer of inflationary pressures on top of the tariff shock.

Trump visit to Beijing – Wednesday to Friday 

US and Chinese officials have reportedly intensified discussions to extend the current trade truce and explore potential agreements on agricultural purchases, AI safeguards, and supply chain resilience. A successful meeting between the two leaders this week could therefore provide an extra boost for Chinese equities, which have lagged their Asian peers even as regional markets rallied last month due to AI optimism and easing concerns over the Iran war.

Last week:

UK elections

Sir Kier Starmer has insisted he will carry on as prime minister despite a disastrous set of local election results for Labour which have seen his own MPs call for his resignation. Local election results showed Nigel Farage’s Reform UK making sweeping gains, while  Starmer’s Labour Party lost more than half the seats it was defending, fuelling political uncertainty. The turmoil has caused 30-year UK bond yields to rise to 5.81%, their highest level since July 1998.

US nonfarm payroll data 

Nonfarm payrolls in April increased for the second consecutive month, marking the strongest two-month period for nonfarm payroll increases since 2024. The US economy added 115,000 jobs, up from a forecast of 62,000, while last month’s initial print of 178,000 is now 185,000. Job gains in healthcare, transportation and warehousing, and retail were notable drivers. The unemployment rate remained at 4.3%. However, the percentage of people working or seeking work fell to the lowest level since October 2021.

The infoshot to help kick-start your week

Coming up this week:

Iran ceasefire under threat as tensions escalate

All eyes will be on the conflict in Iran after tensions escalated during the Bank Holiday weekend. Yesterday, President Trump announced operation “Project Freedom” in an attempt to help the hundreds of ships trapped in the Strait of Hormuz. Trump warned Iran’s forces they would be “blown off the face of the Earth” if they attacked US ships. Countering, Iran threatened to strike any US navy ship approaching the Strait and claimed to have struck a US frigate with missiles. This weekend, the UAE accused Iran of firing missiles into the region for the first time since the ceasefire. The ceasefire is now in its fourth week. American military have had time to restock and refuel, and if a deal can’t be reached the situation could be set to escalate.

Complicating the situation further, on Saturday, Beijing ordered Chinese companies to defy US sanctions on private refiners linked to the Iranian oil trade. China purchased more than 80% of Iran’s oil exports in 2025. Ahead of Xi Jinping’s summit with Trump later this month, Beijing appears to be taking a more aggressive stance on trade and US investments. For example, last week they blocked Meta’s $2bn purchase of AI agent developer Manus. 

US payroll data – Wednesday 

US payroll numbers recovered in March, climbing by 178K. Another set of strong numbers this week, combined with rising inflation, would lower the pressure on the Fed to cut interest rates this year.

Last week:

Interest rate decisions

As expected, the Bank of England, Federal Reserve, Bank of Japan and ECB all held interest rates last week. The Bank of England said further rate rises were likely due to the Iran war and its impact on energy prices and inflation. The Bank estimates average household gas and electric bills will rise from £1,641 to “close to £1,900” in July. They also think food inflation could rise to 4.6% by September.

Over in the US, Jerome Powell chaired the Fed Committee for the last time. During the press conference afterwards, he announced that he will remain on the Fed’s Board of Governors until the investigations against him and the Fed are “well and truly over, with transparency and finality”. 

Big tech contributes to best month of the year while US public debt exceeds GDP

Amazon, Alphabet and Microsoft all demonstrated returns from their AI investments during their Q1 reports last week. Double digit gains were achieved in cloud computing units as the firms benefited from the intense demand for AI infrastructure. Palantir also reported sharp growth with US revenue up 133% as they try to make their AI Platform (AIP) the default option for US firms. The largely positive earnings reports from US firms have helped the largest US index record its best month since November. Meta, who don’t do cloud computing, failed to meet expectations and their plans to increase capital expenditure were met with alarm from investors. Though Meta CEO, Mark Zuckerberg, said the business was “on track to deliver personal super-intelligence to billions of people”. Meta, Microsoft and Amazon all announced or confirmed an array of layoffs as they continue to shrink their workforces.

AI spending helped US GDP rise to 2% during the first quarter of 2026. However, last week’s reading wasn’t enough to stop US public debt exceeding US annual GDP. On Thursday, the Committee for a Responsible Budget (CRFB) announced that US public debt has now reached $31.27tn, surpassing the country’s $31.22tn annual GDP. This is the first time US public debt has exceeded the size of its economy since World War Two. The nation’s gross debt, including money the federal government owes to itself, is approaching $39tn. The US is spending more servicing interest payments than it does funding defence or Medicare.