Market Snapshot is a weekly view from our portfolio managers, offering sharp, thematic insights into the trends shaping markets right now.
Fast reading
- Upbeat earnings season sparks US equities rally.
- Nasdaq and S&P 500 hit all-time highs, led by large-cap tech.
- Dimming prospects for Middle East peace lights a fire under oil prices.
A bumper start to earnings season was the main event this week, with US equities driving higher in response.
Tech stocks led the charge, with many firms announcing record profits. By the start of the week the blended net profit margin for the S&P 500 index in Q1 2026 was 13.4%1, with five sectors reporting a year-over-year increase, led by Information Technology.
Less positive were the latest moves in commodities, where the prospect of renewed conflict in the Middle East briefly pushed the price per barrel for Brent Crude – the global benchmark – above US$125.
US equity indices finished the month well ahead, with the S&P 500 reaching above 7,200 for the first time by Thursday’s close (30 April). The Nasdaq followed suit with its own record high on the same day, climbing 15% for the month, its largest one-month percentage gain since April 20202.
Sentiment seems to have turned on a dime: where investors were preoccupied with the oil price and the dangers of inflation they’re now bullish about the prospect of economic growth
The investment team’s view
For Damian McIntyre, Head of the Multi-asset Solutions Team, the turnaround in US equities is not unexpected. “Even during the correction in the first quarter there was a disconnect between what the economic data was showing – which was actually looking very good – and how the market responded,” he says. “Since then, and helped by ongoing peace talks with Iran, sentiment seems to have turned on a dime: where investors were preoccupied with the oil price and the dangers of inflation they’re now bullish about the prospect of economic growth and how artificial intelligence (AI) can contribute towards that.”
Paul Dalton, Investment Director, Equities, highlights how earnings reporting from tech giants such as Alphabet, Amazon, Microsoft and Meta have reinforced a familiar narrative: strong revenue growth, sharply higher capex, persistent capacity constraints and rising demand for agentic AI and compute.
“After a year of alternating hype and caution, this season feels more like a ‘show‑me’ moment,” he says. “Fundamentals are becoming increasingly important and it’s no longer sufficient simply to have exposure to the AI theme; capital discipline and valuation are under greater investor scrutiny, with an increasing focus on execution, returns and margin sustainability.”
The result, says Dalton, was a mixed bag for the tech sector, despite positive earnings statements. “Cloud performance remains strong across platforms, but the relative winners are increasingly those with diversified business models and deep ecosystems. Meanwhile, infrastructure exposures are benefiting more tangibly, with data‑storage names seeing strong demand from unstructured, persistent AI workloads, supported by constrained capacity and pricing power.”
Beyond tech, according to Dalton, earnings commentary suggests the Iran conflict is feeding through in nuanced ways, reinforcing dispersion in earnings, guidance and market leadership. “Energy companies remain clear beneficiaries,” he says, “while some consumer and industrial firms are beginning to flag second‑order margin and demand risks into the second half of the year, which could become more pronounced if the conflict persists and oil prices remain elevated through the summer.”
View the latest Market Snapshot.
Share:
