In the United States, markets were closed last Monday in observance of Washington’s Birthday, shortening the trading week. However, market sentiment remained mixed, as concerns surrounding artificial intelligence (AI), its impact on software companies, and the cost of its buildout continued to influence market movements. In addition, uncertainty regarding the future path of interest rates, combined with heightened geopolitical tensions between the United States and Iran, contributed to a generally volatile trading environment. On the geopolitical front, markets initially reacted positively after Iran’s Foreign Minister, Abbas Araghchi, stated on Tuesday that there had been constructive developments between the United States and Iran. However, tensions escalated later in the week, with the White House warning that Iran would be “very wise” to reach an agreement, and President Trump stating that he could potentially authorise a strike within 10 days if a deal was not reached. These developments weighed on broader markets on Thursday afternoon. For the week, after volatile trading on Friday the S&P 500 and NASDAQ closed 1.28% and 1.36% higher, respectively.
In earnings news, with approximately 75% of S&P 500 companies having reported fourth-quarter results, the overall picture remains positive. Of those reporting, 74% delivered earnings per share (EPS) above estimates, while 73% exceeded revenue expectations. Earnings growth is now projected to range between 12% and 14%, marking the fifth consecutive quarter of double-digit earnings growth for the S&P 500. This highlights the continued resilience of corporate earnings, despite the uncertainty currently facing markets.
In corporate developments, the Warner Bros. Discovery acquisition process took another turn last week, as the company reopened discussions with Paramount, granting the rival studio seven days to submit a revised best and final offer that could rival or exceed Netflix’s agreed bid. This provision was accepted by Netflix and will determine whether Paramount submits an improved offer or withdraws from negotiations, allowing the existing agreement to proceed. Shareholders are scheduled to vote on the Netflix deal on 20 March, should Paramount not submit a competing proposal.
In the technology sector, Meta agreed a multi-year deal with NVIDIA that will see the company invest billions in semiconductor chips, although the exact value has not been disclosed. Notably, Meta also agreed to purchase central processing units (CPUs) from NVIDIA, becoming the first company to acquire these products on a standalone basis. CPUs serve as the primary processing component in computing systems, managing and executing operational instructions. Previously, NVIDIA sold CPUs primarily alongside its other chip products; however, this agreement marks the first instance of standalone CPU sales. The deal underscores the strong and growing demand for semiconductor infrastructure linked to AI development, with Meta announcing plans to invest approximately $135bn in data centre capital expenditure in 2026.
Elsewhere, Berkshire Hathaway, the conglomerate long led by Warren Buffett, took the rare step of selling a portion of its utility business, PacifiCorp, to Portland General Electric for $1.9bn. This follows significant wildfire damage in California and Oregon, which resulted in infrastructure losses and legal proceedings alleging that the company failed to deactivate power lines during high-risk conditions. In addition to this divestment, Berkshire Hathaway initiated a new investment in The New York Times valued at approximately $351mn.
In Europe, equity markets reached record highs last week, supported by strong performance in consumer discretionary, financial, and defence sectors. Defence stocks in particular rose following solid earnings from BAE Systems, one of Europe’s largest aerospace and defence contractors, and amid rising geopolitical tensions between the United States and Iran. For the week, the Eurostoxx50 and STOXX600 closed 2.05% and 1.74% higher respectively.
In corporate developments, Klarna, the Swedish-based buy now, pay later firm and one of the largest initial public offerings (IPOs) of 2025, has seen its market capitalisation decline by approximately 50% since its listing on the New York Stock Exchange. This follows quarterly results showing losses of $273mn, despite revenues increasing by 38% year-on-year to $1.1bn in the fourth quarter. While Klarna’s core business remains its buy now, pay later offering, the company is increasingly expanding into broader banking services, including debit cards and interest-bearing loans. The company already has approximately 4.2 million active debit card users and is considering applying for a US banking licence as part of its longer-term expansion strategy.
In the United Kingdom, the FTSE 100 reached a new record high last week, broadly tracking gains seen across European markets. The rally was supported by encouraging inflation data, which showed the annual inflation rate slowing to 3.0%, the lowest level since March 2025. This reinforced expectations that the Bank of England may begin cutting interest rates in the coming months. The market was also supported by continued strength in commodity-linked stocks, driven by strong demand for precious and industrial metals. For the week, the FTSE 100 closed 2.23% higher.
In corporate developments, a London-based artificial intelligence startup founded by former Google DeepMind executive David Silver is reportedly seeking to raise approximately $1bn to support its efforts to develop advanced artificial intelligence systems. The company, Ineffable Intelligence, is led by one of the United Kingdom’s most prominent AI researchers, and the funding round would represent the largest seed investment ever raised in Europe.
