Public Markets 3 Days

Last updated: April 29, 2026, 5:30 PM ET

Geopolitical Tensions and Inflation Fears Drive Markets

Global markets showed heightened sensitivity to escalating Middle East tensions, with Brent crude touching a wartime high that fueled inflation warnings, even as the Fed held rates steady. In his final press conference as chair, Jerome Powell cautioned that price pressures had not yet peaked, providing context for the market’s wavering sentiment as Treasury yields climbed following the Fed split. The conflict’s economic fallout is substantial: the Pentagon estimated the cost of the Iran war at $25 billion, driven by expensive missile use, while the World Bank forecasts energy prices will surge 24 percent by 2026.

The impact of energy volatility is being felt across international trade and central bank policy. India’s Finance Ministry expressed serious concern over a hit to domestic demand resulting from supply shocks tied to the Middle East war. Simultaneously, the Bank of Thailand opted to hold its benchmark rate at a near four-year low to support the economy against the oil shock, contrasting with the Bank of Canada, which is expected to pause hikes while weighing oil inflation versus tariff damage Bank of Canada Likely to Hold. Adding to energy market complexity, U.S. crude stockpiles unexpectedly fell by 6.2 million barrels as weekly exports hit a record 1.6 million barrels a day.

Further evidence of geopolitical risk altering energy flows emerged as a Japan-linked oil tanker completed a difficult transit of the Strait of Hormuz, which has been functionally closed to most international traffic for nearly three months, while Iran’s currency simultaneously fell to a fresh record low under the pressure of the U.S. naval blockade. Meanwhile, the conflict is spurring investment shifts, with Atome PLC reporting that rising geopolitical risks are steering buyers toward long-term contracts in the low-carbon fertilizer sector, and traders at Deutsche Bank and JPMorgan are increasing bets on energy-linked currencies.

Tech Sector Earnings Dominated by AI Spending

Major technology firms reported quarterly results that underscored the massive capital expenditure required to fuel the artificial intelligence arms race. Meta Platforms posted its largest revenue jump in recent memory for the first quarter but simultaneously announced plans to increase spending on AI data centers beyond previous forecasts. Similarly, Microsoft exceeded expectations with $82.9 billion in sales for the January-to-March period, though questions about the ultimate return on its AI investments persist. Amazon also beat analyst estimates, reporting a 17% revenue jump anchored by a sharp increase in its Web Services division.

In semiconductor and software spheres, Qualcomm’s second-quarter sales rose driven by automotive and IoT growth, even as the firm managed pressure from memory supply shortages, while a new chip startup, founded by Google and Meta veterans, claims to have a solution to the dreaded memory wall that is currently overwhelming AI servers. Separately, the race for AI infrastructure financing saw Blackstone’s QTS seek $2 billion from banks specifically to guarantee electricity procurement for its data centers. Regarding corporate structure, PayPal announced a reorganization into three distinct business units—Checkout Solutions, Consumer Financial Services, and Payment Services—as part of a streamlining effort.

Corporate Earnings Show Consumer Resilience and Sectoral Divergence

Corporate earnings reflected a mixed picture of consumer behavior, with some sectors defying macroeconomic uncertainty while others faced headwinds. The Cheesecake Factory reported higher profit, noting that comparable sales ticked up 1.6% year-over-year, mirroring a trend of spending resilience seen at Mattel, whose CEO stated that sales of Uno and Hot Wheels were accelerating despite macro concerns. In contrast, casino operator MGM Resorts logged lower quarterly profit, despite higher revenue figures attributed to growth in China. E-commerce platform EBay posted higher first-quarter revenue, supported by an 18% climb in gross merchandise volume.

The automotive sector showed divergence: Carvana reported a $405 million profit following a record sale of 187,393 retail units, while Ford expects a $1.3 billion federal tariff refund following a Supreme Court ruling. However, European automakers faced regional softness; Mercedes-Benz maintained an upbeat tone despite a 4.9% revenue fall, hoping new models will spur sluggish sales, while Airbus profits halved due to persistent delays in receiving engines for its A320 aircraft. Pharmaceutical company Biogen saw revenue rise due to growth products, though GSK experienced its steepest stock dive in nearly two years as older medicines delivered lackluster sales, forcing growth to rely solely on HIV and cancer drugs GSK’s Overhaul Undermined.

Regulatory Scrutiny and Dealmaking Activity

The regulatory environment continued to exert pressure on various industries globally. In the tech domain, Google confirmed its AI deal with the Pentagon following internal staff backlash, while Beijing’s demand that Meta unwind a deal with a Chinese AI startup deepens the geopolitical split between Silicon Valley and China. In finance, activist investor Starboard Value built a significant stake in Flowserve Corp. and is pushing for internal changes. Meanwhile, private equity interest in data centers remains high, with a developer offering $999 million in junk bonds for a project leased to a SoftBank subsidiary.

In other deal news, EQT AB is reportedly preparing an improved takeover offer for the UK’s Intertek Group Plc after initial bids were rejected. Away from M&A, the used-car marketplace Carvana posted a $405 million profit after selling a record 187,393 retail units. In entertainment, Universal Music saw revenue rise 8.1% year-over-year, driven by strong subscription and streaming growth, while Apple is transforming Formula One into an entertainment pillar through a $630 million movie and a five-year streaming deal.

Political and Legal Developments

Political and legal news reflected ongoing domestic and international disputes. The fallout from the White House correspondents’ dinner shooting continued, with prosecutors detailing the assailant’s preparations made weeks before the gala, overshadowing the subsequent state visit by King Charles King Charles Visits Trump’s Washington. On the political front, Prime Minister Narendra Modi is poised to win in West Bengal, reinforcing his domestic standing, while in the U.S., two California ballot initiatives, partially funded by Sergey Brin, are set for November, potentially conflicting with a proposed billionaire wealth tax. In legal matters, the Trump Administration sued New Jersey over a governor’s order barring federal immigration agents from wearing masks.