Public Markets 3 Days

Last updated: May 7, 2026, 2:30 AM ET

Geopolitical Tensions Drive Commodity & Currency Moves

Hopes that the US and Iran were nearing a deal to end the Middle East conflict fueled a global stock rally, sending the Nikkei 225 to a record high as markets reopened after a holiday. This optimism, however, did not translate to sustained strength in commodities, as copper edged lower alongside aluminum while Tehran reviewed a fresh US proposal. The prospect of easing tensions immediately pressured energy markets, causing oil to steady after losing nearly 8% in the prior session, which in turn provided relief to the Philippine peso, setting it up for its best daily gain in a month. Conversely, the durability of the yen’s recent advance is being questioned as repeated suspected intervention by Japan has failed to push the currency past the 155-to-the-dollar level, presenting a high hurdle for the intervention rally.

The energy disruption stemming from the conflict continues to ripple across various sectors, with US gasoline prices topping $4.50 a gallon for the first time since mid-2022, straining consumers. This environment has benefitted producers, as US exports of oil products reached a record high last week, filling supply gaps created by the Middle East crisis. In Europe, Portugal is with a plan to impose a windfall tax on energy companies to shield consumers from escalating costs, a move contested by French President Emmanuel Macron, who stated that energy firms are not currently realizing undue profits. Meanwhile, Gold Fields affirmed its full-year guidance but cautioned that rising oil prices could impede its ability to meet cost expectations.

Corporate Earnings & Sector Performance

European corporate results revealed a significant divergence, with the consumer discretionary sector, encompassing luxury goods, carmakers, and hotels, emerging as the worst performer due to mounting inflation and geopolitical uncertainties. In contrast, carriers like Safaricom Plc posted a 67% jump in annual profit, significantly exceeding analyst expectations, largely due to the narrowing losses at its Ethiopian unit. Amid the tech sector's strong performance, which drove hedge funds to their biggest gains since 2020, South Korean unions at Samsung are demanding a larger share of the surging AI profits, threatening strike action for what they deem adequate compensation.

In the infrastructure and industrial space, Vestas Wind Systems A/S beat first-quarter profit estimates as demand for its wind turbines swelled, while Leonardo’s outgoing CEO suggested that strong order growth would justify an outlook upgrade soon. On the M&A front, Bayer plans to acquire eye-drug developer Perfuse Therapeutics for up to $2.45 billion to bolster its ophthalmology pipeline. Financing activity remains busy, with Yotta Data Services Pvt. reportedly hiring advisors for a potential Mumbai IPO targeting $900 million, and a Pan-African infrastructure fund aiming for a final close at $400 million in June.

Fixed Income, Private Markets, and Policy

US Treasury yields stabilized in Asian trade following a rally earlier in the week that pushed yields lower, as markets digested the evolving geopolitical outlook. In the private capital sphere, Apollo Global Management’s CEO, Marc Rowan, criticized the "day one mark-ups" applied to private equity funds being sold to retail investors, echoing concerns about asset valuations. Separately, Swedish credit management firm Intrum AB is planning to raise 7.5 billion Swedish kronor ($812 in equity capital as it tackles a heavy debt load. In the UK, debt funds have doubled their share of the real estate lending market over five years, constrained by post-crisis regulations that have limited banks’ direct lending capacity.

Central banks globally showed varying approaches to policy amid inflation pressures; Malaysia’s central bank is expected to keep its benchmark rate unchanged as the Iran war has yet to significantly lift domestic inflation. Conversely, Colombia’s central bank surprised markets by holding rates steady in late April, explaining the move was intended to avoid the perception of election interference. Meanwhile, the OECD warned New Zealand that frequent adjustments to the Reserve Bank’s remit risk monetary policy errors.

Tech, Retail, and Litigation

The technology rally, particularly in semiconductors, propelled US stocks to a record closing high on Tuesday, driven by optimism surrounding the potential ceasefire and surging AI demand. Chipmaker Infineon Technologies lifted its annual guidance, projecting significant revenue growth fueled by artificial intelligence requirements, a trend also reflected in the Australian pension fund Brighter Super, which is tilting its portfolio toward global stocks over local shares due to AI exposure. In the retail landscape, Instacart reported higher first-quarter revenue, noting that customers are increasingly gravitating toward value-focused retailers amid affordability concerns. However, regulatory scrutiny continues, with PayPal, Mastercard, and Visa facing a UK probe over alleged antitrust breaches.

In the realm of corporate governance and legal disputes, Wells Fargo’s former security chief is appealing to have his $180 million whistleblower award restored after it was cut to $55 million following a leadership change at the SEC. In tech wrangling, testimony revealed that Elon Musk attempted to recruit Sam Altman for a role at Tesla prior to the fallout that led to litigation concerning the future of the OpenAI lab. Furthermore, the Swiss Re net profit received a boost from lower-than-expected natural catastrophe losses and favorable US mortality trends in its life-and-health segment.