In the United States, equity markets fluctuated last week as geopolitical risk subsided and earnings data took centre stage. On the geopolitical front, there were no clear signs of an agreement between the US and Iran; instead, rhetoric intensified, particularly from the US. Military officials reportedly briefed President Donald Trump on potential further action against Iran, pushing oil prices above $100 per barrel. Washington also rejected Iran’s proposals and insisted it would continue its blockade of the country’s ports until an agreement on its nuclear programme is reached. For the week, the S&P 500 and NASDAQ Composite closed higher, up 1.04% and 1.57% respectively.
In earnings, it was a technology-heavy week, with Meta Platforms and Alphabet Inc. both reporting first-quarter results. Starting with Meta, the Facebook owner reported revenues of $56.3 billion, nearly $1 billion ahead of estimates. However, capital expenditure dominated the release. The company reported Q1 capital spending of $19.84 billion, below Wall Street estimates of $27.5 billion. Despite this, Meta raised its full-year capex guidance to between $125 billion and $145 billion, indicating a significant increase in spending as the year progresses, which the company attributed to higher component costs. On the user side, daily active users declined by more than 5% compared with the previous quarter, largely due to internet disruptions in Iran linked to the conflict with the US and restrictions on WhatsApp in Russia. Shares fell 7% in extended trading, as investors focused on increased capital spending rather than strong revenue growth. Alphabet, meanwhile, delivered positive earnings growth, with revenues rising to $109.9 billion, ahead of estimates of $107.2 billion. Its Cloud division, benefiting from rising demand driven by AI development, also exceeded expectations, reporting $20.02 billion in revenue versus $18.05 billion forecast. The company reported capex of $35.7 billion in Q1 and increased its full-year capex guidance to a range of $180 billion to $190 billion, up from $175 billion to $185 billion. Shares rose 7% in extended trading, reaching an all-time high.
In corporate developments, Pershing Square Capital Management, the hedge fund run by Bill Ackman, listed on the New York Stock Exchange last week, raising $5 billion. Pershing Square USA, a new closed-end fund based on the firm’s main strategy, listed on Wednesday and fell 18% from its initial offering price, closing at $40.90. Pershing Square, the management company, also listed on Wednesday and traded broadly flat on its first day. The $5 billion raised was at the lower end of expectations, with initial projections suggesting the combined listings could raise up to $10 billion.
In the technology sector, China has intervened in Meta’s acquisition of Manus, a Chinese-founded but Singapore-based AI company. Beijing’s attempt to unwind the deal may prove challenging, given that Meta has already begun integrating Manus’s software into its operations. If Meta fails to comply, Chinese authorities could restrict its business activities in the country and impose financial penalties. Meta acquired Manus last year for a reported $2 billion, and the intervention comes just weeks before a planned meeting between President Trump and Xi Jinping.
In Europe, equity markets declined for most of last week before rebounding on Thursday after the European Central Bank maintained interest rates at their current level and oil prices retreated from four-year highs. Earnings were mixed, with car manufacturers Stellantis and Volkswagen declining after missing revenue estimates. Meanwhile, French banks BNP Paribas and Crédit Agricole also saw their shares fall by more than 4%. For the week, the Euro Stoxx 50 and STOXX Europe 600 closed lower, down 0.01% and 0.14% respectively.
In corporate developments, the first autocallable exchange-traded fund (ETF) was launched last week, offering investors a potential stream of income unless the underlying index falls below a specified level. The Calamos Autocallable Income ETF offers a yield of 14% and provides investors with access to a high-yielding strategy typically available through structured products. The ETF is linked to an index tied to the S&P 500 and contains 52 weekly autocallable notes. Returns are generated from each note provided the underlying index remains above 60% of its initial level, with the notes being called after one year if the index is above its starting level. Each note has a maximum term of five years.
In the United Kingdom, the FTSE 100 traded lower for much of last week before rebounding on Thursday, in line with broader European markets. Strong corporate earnings and the Bank of England’s decision to hold interest rates supported market sentiment. Among individual equities, Rolls-Royce Holdings shares rose 7% following positive first-quarter earnings, while Standard Chartered gained nearly 4% on Thursday after reporting record Q1 profits. For the week, the FTSE 100 closed marginally lower, down -0.02%.
In corporate developments, within the football sector, Brighton & Hove Albion F.C. announced plans to develop an £80 million purpose-built stadium for its women’s team, marking a first for both the UK and Europe. The proposed 10,000-capacity venue will be located near its existing home ground, the Amex Stadium. The announcement comes amid growing demand for women’s football, with Deloitte estimating that women’s sports globally will generate over $3 billion in revenue this year, representing a 340% increase since 2022.
