Global markets

From Friday 22 May to Friday 29 May 2026, global equity markets delivered a broad-based advance, with the MSCI AC World rising 2.2% in USD total return terms. Markets navigated a volatile week defined by elevated inflation data, ongoing US-Iran tensions, and powerful earnings catalysts, ultimately concluding at or near record highs. Risk appetite recovered from mid-week turbulence on Friday, as reports of a tentative 60-day ceasefire extension and prospective nuclear negotiations between the US and Iran lifted sentiment and pushed oil prices materially lower.

Technology was once again the primary engine of returns globally, gaining close to 6% on the week, though leadership was notably broader than in prior periods. Beyond the headline AI infrastructure surge, software re-emerged as a meaningful outperformer for the first time in several quarters, suggesting the investment cycle may be broadening beyond hardware and chip vendors into the application and platform layer. The MSCI AC World Growth index advanced 2.9% against 1.5% for Value. Energy was the worst-performing sector, falling over 5% as markets priced in a Hormuz resolution, with defensives also lagging. Emerging markets were the standout regional performer, with the MSCI Emerging Markets index gaining 4.6%, driven primarily by South Korean equities. MSCI AC World ex-USA gained 2.7%, outpacing the US and reflecting broadening geographic participation in the rally.

US

The S&P 500 extended its winning streak to a ninth consecutive weekly gain, its longest since 2019, rising 1.8% to close at a record 7,580. The Nasdaq 100 gained 3.3%, while the Russell 2000 advanced 2.7% and the equal-weighted S&P 500 added 2.0%, consistent with broadening participation beyond mega-cap technology. Trading was compressed into a four-day week owing to the Memorial Day holiday, yet the price action was decisive.

Dell's blowout beat-and-raise on AI server infrastructure demand sent its shares up close to 33% on Friday, spurring sympathetic gains across the semiconductor supply chain. The more instructive development, however, was software's outperformance. Having trailed for several quarters and held technical support at the February and April lows, the complex broke out convincingly. Snowflake surged over 35% in a single session — its best day on record — after reporting product revenue growth of 34% year-on-year and describing the quarter as a clear inflection point for AI-driven demand. MongoDB and Okta added to the theme, both beating estimates and raising guidance on accelerating AI workload adoption. Not all names participated equally: Salesforce delivered a record beat yet closed little changed, as investors remain unconvinced its seat-based model is insulated from AI disruption. That divergence between perceived AI beneficiaries and potential AI victims is likely to remain a defining fault line within the sector.

Thursday's April PCE confirmed headline inflation at 3.8% year-on-year, the highest since May 2023, driven by Hormuz-related energy pass-through. Core PCE of 3.3% was in line with consensus, though the softer sequential monthly print of 0.2% offered a marginal reprieve. Consumer spending continues to run well ahead of income growth, with the savings rate near post-GFC lows, a dynamic that sustains near-term activity but raises the risk of a sharper pullback should energy prices re-accelerate. A downward revision to Q1 GDP growth to an annualised 1.6% added a note of caution, though equity markets looked through these headwinds, supported by Q1 2026 EPS momentum that was among the strongest in recent years.

Equity asset class

We maintain equity exposure at the upper end of our neutral allocation range.

Earnings

After a strong Q1 earnings season and upward guidance revisions, 2026 earnings expectations have been revised higher across all major regions and are now running at double-digit growth rates. Operating margins have reached all-time highs and continue to accelerate.