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.  

The infoshot to help kick-start your week

Coming up this week:

Interest rate decisions – Tuesday to Thursday

The Federal Reserve, Bank of England, Bank of Japan and the European Central Bank will all hold meetings this week to make their latest decisions on interest rates. Across the board, no rate changes are widely expected. However, analysts and investors will have a firm eye on the statements and guidance to gauge the likelihood of rate changes later in the year and get a better grasp of the economic fallout from the conflict in Iran.

This week’s Federal Reserve meeting could be the last presided over by Jerome Powell. His likely successor, Kevin Warsh, faced some tough questioning from senators during his confirmation hearing last week. He denied Elizabeth Warren’s characterisation of him as President Trump’s “sock puppet” and said, “The president never once asked me to commit any particular interest rate decision, and nor would I ever agree to do so if he had”. Republican Senator Thom Tillis was still withholding his support due to the US Justice Department’s investigation into Jerome Powell. On Friday, it was announced that the department had dropped the investigation, potentially clearing the way for Warsh.

Mag’ 7 earnings – Wednesday & Thursday

Five of the “Magnificent Seven” tech companies report their first quarter earnings this week. Aside from earnings, the reports will also provide updates about their massive AI spending plans.

Last week:

AI helps Asian and US markets defy war

On Tuesday, Trump indefinitely extended the US’s ceasefire with Iran. During the week, Iran seized two ships, and the US continued its blockade of Iranian ports, turning thirty ships back around. Oil prices rose steadily throughout the week. However, for some markets, like the week before, AI optimism outweighed energy concerns. Japanese and South Korean markets reached record highs today. Their dominance in the semiconductor and memory chip markets has largely been behind the recent tailwinds.

US markets have fully recovered from their major slump at the end of March. 28% of large US firms have now reported their Q1 earnings, so far 84% are beating estimates.

UK updates on inflation and unemployment, BoE warning

Without a meaningful UK presence in the AI industry, the lack of progress in Iran meant UK equity markets fell last week.

The latest UK Consumer Price Inflation (CPI) from the Office for National Statistics (ONS) showed inflation rose as expected by 3.3% in March. The Iran war has caused the biggest jump in fuel prices for three years.

The UK unemployment rate unexpectedly fell to 4.9%. The fall was driven by an increase in the number of people not actively seeking work, including fewer students looking for work while studying. This meant the inactivity rate rose from 20.7% to 21%.

On Friday, the Bank of England (BoE) issued another warning about inflated stock market valuations. The bank’s Deputy Governor, Sarah Breeden warned, “There’s a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point.” She didn’t suggest when or by how much markets could fall but said she feared the impact of risks like private credit and the AI boom crystalising at the same time.

DeepSeek spares markets this time around

DeepSeek, the Chinese AI startup who shook up markets in January 2025, launched a preview of their new model on Friday. It didn’t disturb markets like it did last year (Nvidia actually finished the week at a record high), but the pricing is significantly cheaper than its American counterparts and it’s easier to optimise, raising questions for DeepSeek’s US rivals. That said, Tesla has announced that their capital expenditure plan for 2026 will treble in order to invest more in AI, robotaxis and robotics, and Meta will cut staff by 10% to compensate for already-announced increases in AI spending. We would expect market watchers to take a keen interest in the evolution of earnings from, and investment in, AI that will be announced by other “Magnificent Seven” companies later in the week.

The infoshot to help kick-start your week

Coming up this week:

Starmer addresses parliament about Mandelson vetting scandal – Monday

Prime Minister Sir Keir Starmer is set to address MPs this afternoon over the Peter Mandelson vetting scandal. Starmer is under pressure following the news that the Foreign Office overruled Mandelson’s vetting failure so he could become British Ambassador to the United States in December 2024. Starmer says he was not informed of the Foreign Office’s decision.

Despite calls from opposition leaders for Starmer to resign, reports suggest it’s unlikely Labour MPs will also call for his resignation. Investors will be keeping an eye on today’s statement to gauge how long-lasting and impactful the current political turmoil might be. 

Kevin Warsh confirmation hearing – Tuesday

Kevin Warsh, Trump’s pick to succeed Jerome Powell as Chair of the Federal Reserve, will testify in front of the Senate Banking Committee tomorrow. His nomination must be approved by a majority of the committee before a full Senate vote.

Powell’s term is set to end on 15 May 2026. Last week, Trump threatened to fire Powell if he doesn’t step aside at the end of his term. Powell is planning to remain in his post until Warsh is confirmed in the Senate. Several Republicans have said they will block Warsh’s appointment until the criminal investigation into Powell over the renovation of the Federal Reserve office is dropped. 

UK CPI (March) – Wednesday

On Wednesday, the Office for National Statistics (ONS) will release the latest Consumer Price Index (CPI) report. The data will provide an insight into the war in Iran’s impact on inflation here in the UK. The current forecast is for the annual CPI rate to increase from 3% to 3.3%.

Last week:

Positive week for markets as they ride the conflict wave

Broadly speaking, markets across the globe had a positive week following several optimistic updates about an end to the conflict in Iran, and the reopening of the Strait of Hormuz. On Wednesday, President Trump said the war was “close to over” and that during a call with President Xi, China was very happy that he was “permanently opening” the strait.

However, after being briefly reopened on Friday, the shipping route was shut again Saturday evening. The Islamic Revolutionary Guard Corps Navy (IRGCN) said it would stay closed until the US lifted its blockade on Iranian ports. Trump said the blockade will remain in place until a peace deal can be reached. Oil prices have risen in response to the closure. However, this morning Japanese markets haven’t fallen in tandem for a change as optimism around the AI sector has trumped concerns about the crisis in the Middle East.

A resolution still looks some way off. Iranian state media have reported that Iran are not planning to take part in another round of peace talks. Trump has again threatened to destroy power plants and bridges if a deal can’t be reached.

UK GDP better than expected

The latest GDP report from the Office for National Statistics (ONS) showed UK GDP increased 0.5% in February. That’s higher than the 0.1% forecast. January’s flatlining figure was also revised upwards to 0.1%. Strong performances in services and manufacturing contributed heavily to the growth.

In contrast, the International Monetary Fund (IMF) cut its growth prospects for the UK due to the knock-on effects of the Iran war. The IMF estimates that UK GDP will rise by just 0.8% this year, down from the previous forecast of 1.3%. The 0.5% cut is bigger than the downgrades for the other G7 countries.

Big US banks break records

Market volatility, and its subsequent increase in client trades, helped several major US banks post record-breaking profit numbers last week. Collectively, Bank of America, Morgan Stanley, Goldman Sachs, JP Morgan, Citi and Wells Fargo have taken in $47.4bn in profits in the first quarter of 2026

The infoshot to help kick-start your week

Gains halted by blockade announcement

When markets reopened after Easter, the conflict in Iran was inevitably top of the agenda. On Tuesday, President Trump threatened “A whole civilisation will die tonight” if a deal to reopen the Strait of Hormuz couldn’t be reached by his 8pm deadline. Thankfully, Trump backed down and agreed to a two-week ceasefire. 

Markets responded well to the news, sending US and European markets up, and pushing Japanese indexes up around 7% week on week. Due to their reliance on oil exports that come via the Middle East, Japan is particularly affected by Hormuz’s closure. Last week, Prime Minister Sanae Takaichi announced another 20 days’ worth of oil from their national reserves will be released in May. On Tuesday, the Executive Director of the International Energy Agency (IEA), Fatih Birol, said the impact of the current crisis on the oil market is “more serious than the ones in 1973, 1979 and 2022 together”.

Over the weekend, Vice President JD Vance led US peace talks with Iran. No agreement could be reached following twenty hours of negotiations. In response, Trump has announced that the US navy will start blockading the Strait of Hormuz from 2pm today. Around 100 tankers have gone through the Strait since the conflict started, paying Iran up to $2mn each time. A US blockade would mean no ships could pass through the Strait. Oil prices have surged on the back of the news, with Brent and Crude going above $100 dollars a barrel again. So far today, European and Asian markets have fallen in response, and US futures are trending downwards.

US CPI and GDP numbers

Seven weeks into the war in Iran, we’re starting to see its impact on US inflation. On Friday, the US Bureau of Labour Statistics (BLS) released the Consumer Price Index (CPI) data for March. The energy part of the index rose 10.9% in March. Gasoline increased 21.2% over the month, its largest monthly increase since the CPI was first published in 1967. Fuel oil increased 30.7%, its biggest monthly jump in 26 years. Overall, the energy index has increased 12.5% over the last twelve months.

US economic growth slowed more than expected in Q4 2025. The latest release from the Bureau of Economic Analysis (BEA) showed GDP rose just 0.5%, down from the 0.7% forecast and a big drop off from the 4.4% growth seen in Q3. According to the BEA, increases in consumer spending and investment were offset by decreases in government spending and exports.

Coming up this week

Big US banks release earnings – Monday to Wednesday

Major US banks including Goldman Sachs, JP Morgan, Citigroup and Bank of America all release their Q1 earning reports this week. Their results may give more information about how the ongoing conflict in Iran is impacting the US economy. Following last week’s high inflation numbers, investors will be watching for changes in trading activity and what mergers and acquisitions are being lined up or postponed. They’ll also have an eye on any results related to the banks’ private credit arms due to concerns around weak lending standards and the AI investment boom.

US PPI (March) – Tuesday

Following last week’s CPI data, the US BLS will publish the latest Producer Price Index (PPI) tomorrow. Whereas the CPI measures inflation from the consumer’s perspective, the PPI measures it based on the money received by domestic producers and sellers. The current forecast is for the index to rise from 3.4% to 4.6%.

UK GDP – Thursday

The latest GDP figures from the Office for National Statistics (ONS) are set to be released on Thursday. Last time around, the ONS numbers showed the UK economy unexpectedly flatlined to 0% growth in January. With analysts expecting growth of 0.2%, we saw the pound fall and bond yields rise on the back of it. Forecasters are expecting 0.1% growth this time around.

The infoshot to help kick-start your week

Markets bounce into week six of the war

Last Monday, President Trump sent US markets down after he threatened to “obliterate” Iran’s power stations and water plants if they didn’t “shortly” agree to peace terms. Optimism that Trump was trying to wind down the war gave markets a lift on Tuesday and Wednesday, with the S&P 500 ultimately soaring 6% and ending a five-week losing streak. Trump’s prime time address on Wednesday evening failed to reassure investors and markets took a hit when they opened on Thursday. However, by the close of play, US indexes recovered and finished just below Wednesday’s peak as we went into the Easter weekend.

Six weeks into the war, as last week demonstrates, the conflict and Trump’s rhetoric continue to mould global markets. With the Iranians only allowing a limited number of ships through the Strait of Hormuz, oil and gas have hit a four-year high and fertiliser prices are up 30% in the US. Global shipping operations have started relying more on alternative routes, including Cape diversions and Red Sea corridors. Maritime operations are having to face up to the fact that, even if the conflict ends in the near future, Hormuz’s commercial shipping activities will not go back to normal anytime soon.

On Easter Sunday, Trump took to Truth Social to repeat his threats to destroy Iranian infrastructure. He set a new deadline for 8pm today to reopen the Strait of Hormuz and has since said he “is not at all” worried about his potential actions being considered war crimes. S&P futures held up despite Trump’s violent language, and Asian and European markets are up slightly this morning. The chances of a solution being reached by 8pm look low. This is the fifth deadline Trump has given the Iranians since the war started. According to the US Human Rights Activist News Agency (HRANA), 3,540 people have been killed in Iran so far, including 1,616 civilians.

Blue Owl caps withdrawals as private credit worries grow

On Friday, private credit investment firm, Blue Owl Capital, imposed a 5% quarterly cap on investor withdrawals as they try to deal with a surge in redemption requests. Filings released on Thursday showed between January and March, investors asked to withdraw 21.9% from their Credit Income Corp fund and 40.7% from their tech lending fund, Blue Owl Technology Income Corp.

The surge comes after growing concerns over weak lending standards in the private credit industry and worries about its AI spending boom exposure. Other private credit firms like Ares Management, Apollo Global, Blackstone and the private credit arms of banks like Morgan Stanley, J.P. Morgan and Goldman Sachs have also placed caps on redemptions in recent months.

OpenAI closes record-breaking funding round

OpenAI closed its latest funding round on Tuesday, raising a record-breaking $122bn of committed capital, leaving the company valued at $852bn. Despite ChatGPT having more than 900 million weekly users the company is a long way off being profitable. OpenAI made $13.1bn in revenue last year. They said on Tuesday that they’re currently generating $2bn in revenue a month in 2026. Veteran investor and hedge fund founder, George Noble, recently estimated that OpenAI needs to generate an annual revenue of $200bn by 2030 to meet their spending projections. OpenAI has started cutting spending plans and closing unprofitable features like the AI video app Sora as they gear up for their likely IPO later this year.

Trump appointed the CEOs of various tech giants to the President’s Council of Advisers on Science and Technology. Meta’s Mark Zuckerberg, Nvidia’s Jensen Huang and Oracle’s Larry Ellison, were all included in the initial batch of 13 members. The council will help lead the US’s strategic plans in the ongoing AI race with China.

Ellison’s Oracle laid off 30,000 employees across the globe on Wednesday. Despite revenues increasing 22% in the last quarter, Oracle decided to cut 18% of their workforce to help fund more AI infrastructure projects. The firm raised $50bn in debt and equity in January, and analysts estimate the layoffs could free up a further $10bn in free cash.