Nicolas Laroche

Markets were driven by shifting rate expectations and geopolitical developments, with US–Iran tensions adding volatility.

Global markets are entering a more balanced phase, where higher‑for‑longer rates, renewed energy pressures and sticky inflation are starting to test an artificial intelligence (AI)‑driven equity rally rather than abruptly reversing it.

In April, we anticipated an inflationary shock and a persistently cautious stance from central banks. That scenario has now materialised, reducing the prospects of any meaningful monetary easing.

Global equities extended their rally, powered by significant technology sector strength and a standout earnings season: S&P 500 Q1 earnings per share (EPS) growth reached +27.7%, double initial expectations. Emerging markets outperformed, led by Taiwan and South Korea.

Global equities advanced, driven by strong US technology earnings, while fixed income markets slipped as yields moved higher and central banks maintained a cautious stance.

Global markets are navigating a fragile balance between resilient growth, persistent geopolitical tensions and cautious central banks.

Investors reacted positively to a further de-escalation in the Middle East last week.

Following the announcement of a two-week US–Iran ceasefire on Tuesday, 7 April, risk assets were supported by the perception that the worst may have been avoided.

Headlines about a potential ceasefire in the Middle East have started to appear, though visibility on the geopolitical outcome remains limited.