Global equity markets finished the week higher, with the U.S. S&P 500 recording its eighth consecutive weekly gain. European markets also delivered strong performances, up over 2% and the UK’s FTSE 100 climbing 2.66%. After a volatile start to the week, sentiment improved as optimism surrounding technology and AI continued to support markets, helped in part by stronger-than-expected earnings from chipmaker NVIDIA. Hopes that diplomatic negotiations between the U.S. and Iran could reduce the risk of further escalation in the Middle East also helped underpin risk appetite, despite intermittent conflicting headlines throughout the week. Oil prices also reversed earlier gains and briefly moved back below $100 per barrel.
PMI data released during the week pointed to modest global economic growth but also highlighted ongoing inflationary pressures, particularly through rising input costs.
In the UK, manufacturing remained resilient, with the PMI reading rising to 53.7, beating expectations with more new orders and firms clearing backlogs. However, the services sector slipped into contraction territory at 47.9, reflecting softer demand and cautious client sentiment. UK consumers also pulled back spending in April, retail sales fell 1.3%. The decline was largely down to a 10.2% drop in fuel sales which declined sharply as motorists reduced consumption amid ongoing price volatility.
In the U.S., manufacturing activity strengthened further, with PMI rising to 55.3, its highest level since 2022 and ahead of forecasts. By contrast, the Eurozone continued to weaken, with the composite PMI falling to 47.5, signalling a second consecutive month of contraction and increasing concerns around recession risks. Weakness was driven primarily by the services sector, while rising input costs continued to indicate persistent inflationary pressures.
Sentiment was boosted by signs peace talk developments in the Middle East after President Trump stated on Wednesday that the U.S. was in the “final stages” of negotiations with Tehran, while simultaneously warning that military action remained possible if a deal could not be reached. Investors appeared encouraged by comments from Secretary of State Marco Rubio and reports from Iranian media suggesting progress was being made, although significant disagreements remain, particularly around Iran’s uranium stockpiles and nuclear ambitions.
Technology stocks remained a key driver of market performance. The U.S. semi-conductor giant, NVIDIA reported strong first-quarter earnings after the U.S. market close on Wednesday. Revenue exceeded $81 billion, representing growth of 20% from the previous quarter and 85% year-on-year. Despite the strong