Public Markets 3 Days

Last updated: May 8, 2026, 2:30 AM ET

Global Markets & Geopolitics: Iran Tensions and Economic Strain

Global markets experienced volatility at the end of the week as a stock rally faltered amid resurfacing doubts about an imminent US-Iran deal, which had previously fueled supply concerns. Crude oil whipped higher as escalating Middle East tensions revived fears over energy availability, even as OPEC production fell to a 36-year low due to the ongoing conflict choking Persian Gulf exports. US gasoline prices topped $4.50 a gallon, hitting levels not seen since July 2022, while grain and oilseed futures in Chicago slumped on peace optimism that a deal might ease supply concerns for crops. The conflict also impacted shipping, with over 20,000 sailors trapped in the Strait of Hormuz as the US attempts to guide stranded vessels under "Project Freedom", even as President Trump rejected curbs on oil exports.

Fixed Income & Central Bank Actions

U.S. Treasury yields edged lower in Asian trade as markets awaited the crucial April payrolls data release. Meanwhile, the debate over intervention in the yen continues, with markets questioning if Japan sold Treasuries while intervening to support its currency, evidenced by a drop in the Federal Reserve’s custody holdings. Elsewhere, Poland’s central bank held rates steady for a second month, citing revived domestic inflation driven by the Iran war’s energy price fallout. In contrast, New Zealand’s government repeated its call for state-owned Kiwibank to explore raising capital, possibly through a partial share sale, to enhance its competitive position, even as the OECD warned that the Reserve Bank of New Zealand’s frequent remit adjustments risk policy error.

Corporate Earnings & Sector Performance

Earnings reports revealed mixed fortunes across sectors, with strong software results limiting damage as the S&P 500 pulled back from records. Japanese electronics giant Sony saw quarterly profit slide by 63% to ¥83.12bn due to electric vehicle losses and gaming weakness, while also announcing a ¥500bn stock buyback alongside a warning that the successor to the PlayStation will increase development costs. In contrast, US consumer companies showed resilience; Tapestry lifted its outlook driven by the Coach brand's strong sales, and Texas Roadhouse shares climbed as diners adjusted to higher prices by choosing cheaper beef cuts. On the fintech front, DraftKings swung to a profit of $21.1 million due to better sportsbook margins, while Block raised its earnings guidance by 62% based on booming lending and payment volumes.

Private Credit Stresses & Asset Management Moves

Worries regarding the health of private credit are currently centered on liquidity, not underlying asset quality, according to Macquarie Group's CFO, who attributed angst to retail-driven redemption issues. This theme was echoed by other managers, as Golub Capital capped withdrawals after investors requested to pull 8.5% of shares, marking another instance of redemption restrictions industry-wide. In dealmaking, a Blackstone-led group is set to inject $100 million of fresh capital into Medallia Inc. as part of a restructuring that will grant them control. Meanwhile, the industry’s roots are being examined, with some commentators linking the current environment to the 1980s junk debt boom initiated by Michael Milken’s Drexel Burnham Lambert.

Technology, AI Spending, and Valuations

The massive capital expenditure by Big Tech on artificial intelligence, totaling $725bn, has pushed free cash flow to a decade low, transforming Silicon Valley firms into major infrastructure investors. Chinese giants like Tencent and Alibaba face slowing growth as AI investment costs mount amid intensifying domestic competition following DeepSeek's recent high-profile funding round. Separately, AI start-up Anthropic is reportedly weighing deals that could push its valuation toward $1tn, potentially surpassing rival OpenAI. Amidst this tech fervor, financiers at the Milken Institute gathering in Beverly Hills were reportedly exhibiting ‘blissful ignorance’ concerning geopolitical and private market strains.

UK Economy and Political Shifts

The strain of inflation is clearly visible in UK consumer behavior, with visits to physical retail shops dropping 10.7% year-on-year in April, marking the weakest performance in over five years. Despite this economic softness, the pound edged higher following early losses suffered by the Labour party in opinion polling. In corporate news, UK retailer Next raised its outlook as robust early demand offset rising cost estimates linked to the Middle East conflict. Furthermore, GSK is attempting to rebuild its oncology business, betting on R&D and acquisitions to achieve £40bn in sales a decade after exiting the sector.

Asia-Pacific Markets and Corporate Activity

The push for critical minerals saw US officials hold talks with South Africa aimed at breaking China’s dominance in the supply chain. In Japan, speculation is mounting over whether intervention to support the yen involved the offloading of U.S. Treasury holdings. In India, investors have been dumping assets as the energy shock stemming from the Middle East crisis caused the rupee to slide, making the nation ‘not a country to be invested in’, although Adani Energy stocks are performing as a proxy for India’s AI trade via green data center pushes. Meanwhile, taxi-hailing operator Go Inc. is targeting a $1.3bn valuation for its Tokyo IPO, hoping to raise as much as ¥90 billion in the listing backed by Goldman Sachs.

Regulatory Scrutiny and Political Maneuvering

In the US, political maneuvering continues, with Eric Trump and Donald Trump Jr. investing in a $1bn vehicle backing sectors favored by the former President, including drones and AI. Regulatory reviews are also underway, as the State Department announced it would review all Mexican consulates following conservative media claims of political interference. Furthermore, the US is awaiting Iran’s response to a proposal regarding the Strait of Hormuz, following recent clashes in the Gulf and Lebanon, even as one House Republican introduced a bill seeking to impose limits on military force.

Commodities & Asset Stability

Gold retained a positive technical structure, holding firm as long as it remained above the $4,680 level, with analysts suggesting an attempt at the $4,800 mark was increasing should momentum persist. For commodities executives, the environment is proving lucrative; Macquarie’s commodities chief saw his pay jump 56% to A$35mn after bumper profits driven by volatile energy markets. In rare earth finds, Myanmar announced the discovery of a massive 11,000-carat ruby near Mandalay, a find considered extremely rare. However, in South Africa, tensions persist over critical minerals, exemplified by the stalled health aid deal with the US after disputes with the Trump administration.

European Business & Tech Dynamics

European infrastructure is undergoing a security review, with grid operators building new defenses against cyberattacks and sabotage in a "wartime wake-up call." Consumer sentiment is also shifting toward energy independence; many Europeans now feel they are "one Trump-ignited war away" from crippling costs, boosting demand for solar panels and heat pumps. In corporate finance, struggling LIV Golf has tapped Gibson Dunn & Crutcher to advise on finding new investors after the Saudi Public Investment Fund pulled its backing. In London, Elliott Management is reportedly preparing for the combined IPO of Barnes & Noble and Waterstones, having selected banks to run the listing.