An update on the latest news, insights, and market views shaping global wealth management and investment trends.

Weekly Snapshot

This section highlights weekly performance, notable volatility, and significant currency moves shaping investor sentiment.

• In the week when softer-than-expected monthly US core inflation rate suggested early signs of easing price pressures, the S&P 500 (closed MON) is up 1.30% and the Nasdaq (closed MON) is up 2.85%. Europe was up 0.35%. The Nikkei was up 4.72% and China's mainland market was up 1.04%
• The week ended with South Korea's Kospi reaching a fresh intraday record, closing at 8'476.15, while Japan's Topix also hit a new all-time high, coming in at 3'957.17. In the US, both the S&P 500 and the Nasdaq reached intraday record highs on Thursday, peaking at 7'563.63 and 26'917.47 respectively. Midweek, the 30-stock Dow rose to a new record, closing at 50'644.28
• Following the Memorial Day closure of the Nasdaq, US Treasury yields fell on Tuesday as bond markets reopened amid renewed hopes for a Middle East peace deal. The yield on the US 10Y Treasury declined by more than 8 basis points to 4.489%, even as US forces carried out what Central Command described as "self-defense" strikes in southern Iran early in the session. Midweek, the US 10Y yield continued its downward trend, edging down 1 basis point to 4.481%, as investor optimism over a potential US - Iran peace agreement remained intact despite renewed pressures on the fragile truce. Reports that Washington and Tehran had largely agreed on the terms of a 60-day deal to extend the ceasefire, pending approval from the US President, pushed the US 10Y yield lower by more than 3 basis points. The week ended with the US 10Y yield at 4.451%, as investors focused on developments in the Middle East amid growing signs that a lasting US - Iran ceasefire agreement could be within reach
• Brent began the week with a sharp 7% decline, settling at $96.14 per barrel after the US President stated that discussions with Iran were "proceeding nicely". On Tuesday, Brent rebounded strongly, gaining more than 3% to close at $99.58 per barrel, as uncertainty intensified following US strikes in southern Iran and President Trump's mixed messaging regarding negotiations between Washington and Tehran. The downward trend in Brent resumed by midweek, with the benchmark losing more than 5% to settle at $94.29 per barrel after Marco Rubio stated that the US would give talks with Iran "every chance to succeed". Later in the week, reports that US and Iranian negotiators had reached a 60-day memorandum of understanding to extend the ceasefire pushed Brent down by 58 cents, closing at $93.71 per barrel. As markets awaited President Trump's approval and the finalization of the agreement, Brent continued to decline on Friday, bringing weekly losses to 11%, its steepest weekly drop since April 6
• Gold rose 2.17% to $4'591.62 per ounce on Friday, supported by renewed optimism surrounding a potential US - Iran ceasefire agreement. Nevertheless, the precious metal remains on track for a third consecutive monthly decline, as persistent inflation concerns strengthened expectations of further interest rate hikes. Bullion notably fell to a two-month low of $4'365.76 on Thursday and has declined by around 2% so far this month
• Following reports that the US and Iran may have reached an agreement to extend their ceasefire and ease restrictions on shipping through the Strait of Hormuz, the dollar fell 0.3% over the week, although it steadied against other major currencies on Friday. Meanwhile, the Japanese yen traded at 159.3 per dollar on Friday, remaining close to the 160-per-dollar threshold, a level that has previously prompted intervention from Japanese authorities

Geopolitical Landscape

A summary of key political and geopolitical developments during the week that may influence global markets and impact portfolio positioning.

• The week started with the US saying it was ready to sign a solid agreement with Iran. In parallel, Iran said that progress had been made in talks with the US, although an agreement was not imminent, even if officials announced they had reached conclusions on a large part of the issues under discussion
• However, shortly after both the US and Iran signaled that negotiations were making progress, the US military conducted strikes in southern Iran. The operation targeted missile launch sites and vessels allegedly attempting to lay mines despite the ceasefire. Nevertheless, Marco Rubio maintained that an agreement with Iran could still be reached within the coming days
• In response, Iran’s Islamic Revolutionary Guard Corps accused Washington of violating the ceasefire over the previous 48 hours in the south of the country. By midweek, however, Iranian officials downplayed the risk of a renewed conflict, arguing that the likelihood of war resuming remained low due to what they described as US weakness, while stressing that their forces remained on high alert. On the same day, Iranian State TV reported the existence of a potential unofficial draft interim peace agreement that would provide for the normalization of maritime traffic through the Strait of Hormuz within one month of the agreement's finalization. The US later denied these claims, dismissing the reported proposal, including allegations of a US willingness to lift the naval blockade, as a complete fabrication. President Trump added that, for the time being, he remained unsatisfied with Iran’s approach to reaching a peace agreement and ending the conflict
• During the night from Wednesday to Thursday, the US carried out new strikes in Iran, shooting down four Iranian drones deemed to pose a potential threat around the Strait of Hormuz and striking a ground base. A US official said these were defensive operations conducted with the intention of preserving the ceasefire. In response, Iran's Revolutionary Guards retaliated by attacking a US base located in Kuwait. Iranian forces also fired warning shots at four vessels attempting to pass through the Strait of Hormuz. Iran condemned what it describes as continued US violations of the ceasefire, while the US in turn denounced what it considers a flagrant breach of the truce by Iran
• By the end of the week, Washington and Tehran reportedly agreed on a deal to extend the ceasefire and open new negotiations on Iran’s nuclear program, as well as on sanctions relief and the unfreezing of Iranian assets held abroad as part of the talks. The agreement would still require approval from the US President. It also reportedly includes provisions for unrestricted navigation through the Strait of Hormuz and a gradual lifting of the US naval blockade. Iran quickly tempered this news, stating that the text had yet to be finalized
• Regarding the Strait of Hormuz, Iran clarified that the charges imposed on vessels transiting the strategic waterway should not be regarded as transit tolls, but rather as navigation service fees. Tehran stated that these fees are intended to fund maritime services as well as environmental protection measures in the Strait of Hormuz, the Persian Gulf, and the Sea of Oman. Earlier this week, Iran and Oman jointly negotiated a new mechanism governing vessel transit through the Strait of Hormuz. Midweek, Trump announced sanctions against the body established by Iran to oversee the Strait of Hormuz, known as the Iranian Authority of the Persian Gulf Strait, and later threatened to sanction the Sultanate of Oman if it continues to cooperate with Iran, despite Oman being a US ally
• Regarding the Israel – Hezbollah conflict, Netanyahu began the week by intensifying operations against Hezbollah in Lebanon, with the stated objective of weakening the group. Over the course of the week, he declared all Lebanese territory south of the Zahrani River a combat zone. This escalation comes just ahead of a military meeting between Lebanon and Israel scheduled for Friday, and only days before a new round of negotiations set to take place on June 2 and 3

Macroeconomic Developments

Key macroeconomic data releases and economic indicators across major regions and individual countries, providing insight into growth trends, and the broader economic outlook.

• Excluding food and energy, US core prices rose 0.2% in April and 3.3% YoY, broadly in line with expectations of 0.3% and 3.3%. The soft monthly reading may suggest that the recent surge in prices is beginning to ease. However, the annual core inflation rate reached its highest level since November 2023
• US quarterly GDP growth came in below expectations, expanding at an annualized rate of 1.6%, compared with an initial estimate of 2%. Despite this weaker-than-expected figure, consumer spending rose 0.5% in April, in line with forecasts, supported by a decline in the personal savings rate, which fell to 2.6%, its lowest level since June 2022
• Initial jobless claims for the week ending May 23 totaled a seasonally adjusted 215'000, up 5'000 from the previous week and slightly above the 213'000 forecast. Meanwhile, orders for durable goods, such as aircraft, appliances and computers, surged 7.9% in April, significantly outperforming expectations of a 3.5% increase
• One of the ECB's top policymakers stated that the institution "will do what is necessary as an independent central bank to bring inflation back to target", reaffirming the ECB's commitment to restoring inflation to 2% over the medium term. Although eurozone inflation had fallen below the ECB's target to 1.9% before the outbreak of the conflict in the Middle East, it subsequently accelerated to 3% in April , up from 2.6% in March
• China's industrial profits surged by 24.7% in April from a year earlier, marking the fastest growth since November 2023 and accelerating from a 15.8% rise in March
• In the context of its ongoing conflict with Ukraine, Russia has passed a law authorizing its central bank and other financial institutions to defend themselves against drone attacks using their own security systems. The legislation allows employees of Russia's central bank to carry weapons and operate equipment designed to detect and shoot down unmanned aerial vehicles, without requiring the involvement of special forces
• Singapore reported a softer-than-expected increase in consumer prices for April, with headline inflation coming in at 1.8%, below market expectations of 2%. Despite the moderation in inflation, imported cost pressures in the city-state are expected to strengthen and broaden in the coming months. The Monetary Authority of Singapore forecasts headline inflation to average 1.5% for 2026. Earlier in the day, Singapore also sharply revised higher its quarterly GDP growth figure to 6%, up from the preliminary estimate of 4.6% and well above Reuters consensus forecasts of 5.1%
• Norway’s quarterly economic growth has been driven by a surge in oil prices, as the country remains Europe’s largest hydrocarbons exporter outside Russia. Its quarterly GDP rose by 6.2%, while its trade surplus reached 226 billion Norwegian kroner

Corporate & Sector Highlights

Insights into notable developments among major global companies and sectors, including earnings results, strategic initiatives, mergers and acquisitions, regulatory developments, and trends influencing corporate performance.

• Dell reported its fastest revenue growth since returning to the public market more than seven years ago, significantly exceeding analysts' expectations for both sales and profitability. Adjusted EPS reached $4.86 versus the $2.94 consensus estimate, while quarterly revenue came in at $43.84bn, well above expectations of $35.43bn. Overall revenue surged nearly 88% YoY. The company's acceleration continues to be fueled primarily by AI-related demand. Revenue from AI servers jumped 757% from the prior period to $16.1bn. Reflecting this momentum, Dell raised its full-year AI revenue forecast to $60bn from the $50bn projected in February, implying approximately 144% YoY growth. Dell also increased its outlook for fiscal 2027. The earnings report was released during the same week that the firm secured a five-year, $9.7bn contract with the US Department of Defense to provide software solutions for the military
• Okta exceeded Wall Street's fiscal quarterly expectations as demand for identity security solutions accelerated amid the rise of agentic AI applications. The company reported adjusted EPS of 91 cents, ahead of the 85 cents consensus estimate, while revenue reached $765m versus forecasts of $752m. Revenue increased 11% YoY
• Abercrombie & Fitch reported mixed fiscal quarterly results after sales were negatively affected by the conflict in the Middle East, which reduced quarterly total company net sales growth by more than 0.5 percentage point relative to its outlook. Despite these headwinds, EPS came in at $1.47, comfortably above the $1.28 expected. Revenue reached $1.11bn, slightly below the $1.12bn forecast. However, the company issued weaker-than-expected guidance. For the current quarter, Abercrombie expects EPS between $1.8 and $2, well below analyst estimates of $2.54. Despite the softer outlook, the retailer reaffirmed its full-year guidance, forecasting net sales growth of 3% to 5% and EPS in the range of $10.2 to $11
• Best Buy reported fiscal quarterly results that exceeded expectations on both revenue and earnings. The retailer posted adjusted EPS of $1.28, ahead of the $1.23 consensus estimate, while quarterly revenue reached $8.94bn versus forecasts of $8.83bn. The company reaffirmed its full-year outlook, projecting revenue between $41.2bn and $42.1bn, alongside adjusted EPS guidance of $6.3 to $6.6. Investors welcomed the strong performance and guidance, sending Best Buy shares up 15% on Thursday. The company is also accelerating its AI strategy, working with OpenAI and Gemini to enhance the customer experience
• Shortly after Ferrari launched its first fully electric vehicle, its shares fell 6% on Tuesday morning. The luxury carmaker is down nearly 27% over the last 12 months
• Shares in Delivery Hero rose more than 10% on Monday morning following reports that Uber was considering an improved takeover bid for the German food delivery group. On Saturday, Delivery Herot confirmed that it had received an initial acquisition offer from Uber of €33 per share, valuing the company at more than €10bn. According to reports on Sunday, Uber's board convened on Saturday to discuss a higher bid for Delivery Hero after an earlier €38-per-share proposal was reportedly rejected by one of Delivery Hero's major shareholders
• Eli Lilly unveiled plans to acquire three companies for nearly $4bn in cash as part of its strategy to expand its R&D capabilities in infectious diseases
• Shares of BP fell by as much as 9% after the company announced the unexpected removal of Chairman Albert Manifold. The decision, which took immediate effect, followed serious concerns regarding governance standards, oversight and conduct. The stock later trimmed part of its losses
• Micron topped a $1tn market value for the first time on Tuesday, as shares jumped 18% on the back of strong AI-driven demand for its memory chips. The surge followed UBS nearly tripling its price target on the stock from $535 to $1'625 per share, citing long-term contract opportunities with partially fixed pricing. Micron's stock has now more than tripled year to date. The boom in demand for AI-related semiconductor stocks also propelled SK Hynix shares up by as much as 11%, pushing the South Korean chipmaker's market capitalization above $1tn. Since the beginning of the year, SK Hynix shares have soared by around 250%
• Shares of LG Energy Solution surged as much as 16.56% on Thursday after its US unit secured a deal to supply battery cells for DTE Energy's storage projects in Michigan. The agreement, which covers eight projects expected to deliver 1.5 gigawatts of battery storage capacity, is valued at $1.6bn
• Snowflake unveiled a plan to spend $6bn on compute infrastructure from Amazon, expanding its use of Amazon's in-house AI chips. The cloud software company also delivered fiscal quarterly results that exceeded Wall Street expectations, driven by continued AI-related momentum. Revenue rose 33% YoY to $1.39bn. Following the announcements, shares of the software company surged 36% on Thursday, marking their best single-day performance on record
• Innovent Biologics shares climbed 10% after the company announced a deal worth up to $10.5bn with Pfizer to jointly develop oncology treatments. The collaboration will focus on the R&D of 12 early-stage and de novo cancer medicines. In addition, Innovent and Pfizer will co-develop four global programs. Under the agreement, Innovent will co-commercialize the products with Pfizer in the US and Europe and share profits generated in those markets, while retaining exclusive rights in Greater China. The deal also includes potential double-digit royalties on sales of each approved product
• LG Electronics shares surged as much as 23.95% after the company unveiled a range of automative innovations developed using technology from Google. The new solution is designed to help automakers significantly lower the cost of deploying multi-display in-cabin systems

Looking Ahead

A forward-looking overview of the upcoming week, highlighting scheduled economic data releases, central bank events, corporate earnings, and geopolitical milestones that may shape market direction.

• 31.05: China NBS Manufacturing PMI (May)
• 01.06: China RatingDog Manufacturing PMI (May), US ISM Manufacturing PMI & Prices (May), US S&P Global Manufacturing PMI (May)
• 02.06: Euro Area Inflation Rate YoY Flash (May), US JOLTs Job Openings (Apr)
• 03.06: Australia GDP Growth Rate QoQ (Q1), US ISM Non-Manufacturing PMI & Prices (May), US S&P Global Services PMI (May), US ADP Non-Farm Employment Change (May)
• 04.06: Australia Balance of Trade (Apr)
• 05.06: India GDP Growth Rate YoY (Q1), Canada Unemployment Rate (May), Canada Ivey PMI s.a. (May), US Non-Farm Payrolls (May), US Unemployment Rate (May), US Average Hourly Earnings MoM (May)

Chart of the Week

For BCα Research, AI is very likely amid an earnings bubble. However, at this stage, there is no clear indication that the bubble is close to bursting. As an earnings bubble, the current AI boom is driven by rapid and potentially unsustainable increase in earnings.

The present cycle is primarily fueled by huge demand for semiconductors. This is not unusual according to BCα Research: semiconductor markets have historically been at the center of multiple boom-bust cycles over the past three decades. Since 1993, the industry has experienced several notable cycles, including the memory cycle of 1993 - 1996, the dotcom / telecom cycle of 1999 - 2001, the GPU crypto mining boom of 2016 - 2020, the memory cycle of 2017 - 2019, the COVID cycle of 2021 - 2023 and the ongoing cycle beginning 2024.

These cycles tend to follow a similar pattern: an initial surge in semiconductor companies' profitability, followed by a sharp reversal. For example, during the 1993 - 1996 memory cycle, Micron's net income surged from $104m in FY1993 to $844m in FY1995, before the cycle reversed and the company experienced sustained losses between 1998 and 2003, with only a brief return to profitability in FY2000.

The sudden drop in sales that characterizes a bubble occurs when supply growth eventually exceeds demand growth. In the early phase, the bubble is driven by strong demand for a scarce good, available in insufficient quantities, which can therefore be sold at very high prices. In turn, these elevated prices incentivize investments in new production capacity. Once this capacity expansion materializes, supply catches up with demand, prices and profits collapse and the earnings bubble ultimately bursts.

One factor, among many others, that may help explain why the current cycle has not yet peaked is growing public opposition to data centers construction. This opposition may be slowing the expansion of production capacity. Thus, the adjustment in supply is delayed, temporarily maintaining semiconductor scarcity, preventing prices from normalizing, and therefore delaying the bursting of the bubble. 

A bursting AI earnings bubble could cause significant economic disruption, particularly through a sharp decline in stock prices and the resulting negative wealth effect. US households are currently estimated to hold $74 trillion in equity wealth, with nearly half concentrated in tech stocks. This would ultimately weigh on GDP, as, according to BCα Research, a 20% decline in stock market wealth could reduce US consumption by 2.7%, or about 1.9% of GDP.

Source: BCα Research, Federal Reserve