In the United States, equity markets rallied last week after experiencing significant volatility in recent weeks. Early in the week, gains were led by major technology names such as Apple and Microsoft, which reported earnings on Wednesday and Thursday, respectively. This momentum pushed the S&P 500 to a new high on Tuesday evening before it broke above the 7,000 level for the first time at the opening bell on Wednesday. However, declines in Microsoft and Tesla weighed on broader markets on Thursday. There was also focus on the Federal Reserve, which held its first policy meeting of 2026 last Wednesday, leaving interest rates unchanged. Market reaction to the decision was muted. On the geopolitical front, President Donald Trump returned his attention to trade policy, announcing a 25% tariff on South Korean imports before stating that both countries would work towards a solution, without providing further detail. Finally, a top court in Panama last week annulled the contract for a unit of CK Hutchinson, the Hong Kong based logistics giant, for the use of two ports along the Panama Canal. The decision is likely to delight the US, who, under the Trump administration have vowed to take back control of the key strait. For the week, the S&P 500 and NASDAQ finished -0.10% and -0.54% lower, respectively.
In earnings news, several of the world’s largest companies reported results. Four of the so-called “Magnificent Seven” — Microsoft, Apple, Alphabet, and Tesla — together representing close to $10tn in market capitalisation, all beat expectations for revenue and earnings per share. Despite this, share price performance was mixed. Microsoft fell by more than 10% over Wednesday and Thursday after disappointing investors with weaker-than-expected cloud revenue growth, while Tesla shares declined by over 3% following a strategic shift that included the cancellation of its Model S and Model X vehicles, as the company refocused on autonomous driving, robotaxis, and its Optimus robot programme.
By contrast, Meta shares surged more than 10% after delivering a strong earnings beat, with management attributing revenue growth to increased AI-driven demand. Apple also reported positive quarterly earnings, with soaring iPhone sales helping to drive record revenues in the previous quarter. Outside the Magnificent Seven, GE Vernova also reported positive earnings. The company, a key supplier of turbines used to power data centre facilities, has benefited from accelerating investment in AI infrastructure, with its shares rising by approximately 110% over the past year.
In corporate developments, NVIDIA announced a $2bn investment in CoreWeave, a move that will provide NVIDIA with access to an additional five gigawatts of compute capacity. The investment is also expected to accelerate the development of CoreWeave’s specialised data centres by 2030 and increases NVIDIA’s ownership stake in the company to over 12%.
In Europe, equity markets initially advanced at the start of last week before a midweek pullback driven by some weaker corporate earnings. Markets rose by almost a full percentage point on Tuesday after the European Union and India agreed a historic trade deal, with the Euro Stoxx 50 once again moving above the 6,000 level. However, weaker-than-expected earnings from LVMH and SAP on Wednesday and Thursday weighed on sentiment, erasing earlier gains. For the week, the Euro Stoxx 50 and the STOXX Europe 600 closed down -0.14% lower and 0.19% higher, respectively.
In earnings news, ASML, one of the companies central to the AI investment cycle, reported strong results, pushing its share price to a new record high. The Dutch-based manufacturer of extreme ultraviolet lithography machines — used to imprint circuitry onto silicon wafers — saw net bookings double in the fourth quarter of 2025 to €13.2bn, almost twice analysts’ expectations. ASML also forecast 2026 sales of between €34bn and €39bn, up from €32.7bn in 2025. LVMH, Europe’s second-largest company by market capitalisation, reported earnings that beat expectations but pointed to softer demand across several key segments. Comments from CEO Bernard Arnault added to investor concerns, sending shares down more than 7% on Wednesday — the company’s largest single-day decline since April 2025. Meanwhile, SAP shares recorded their worst day since 2020 after the software group missed expectations for cloud revenue and cloud backlog growth.
In the United Kingdom, the FTSE 100 continued to be influenced by fluctuating metal and oil prices, which impacted upon large cap mineral companies. Elevated oil and natural gas prices also supported the index, while falling metal prices pulled mining stocks lower. For the week, the FTSE 100 closed 0.32% higher.
In corporate developments, HSBC saw its market capitalisation reach a new record of over $300bn in dollar terms, moving the bank closer to overtaking AstraZeneca as the largest constituent of the FTSE 100. Lloyds Banking also saw shares rise after strong earnings, with pre-tax profits increasing by 12% to £6.7bn, reinforcing the resilience of the UK banking sector.
