In the United States, it was a volatile trading week, with market sentiment largely driven by developments in the conflict in Iran. While Monday initially appeared set to be another negative session, a post from President Trump on his social media platform Truth Social, stating that the US and Iran were working towards a ceasefire, sent equity markets sharply higher. Both the S&P 500 and NASDAQ Composite gained over 1% on the day as a result. However, as Iran and Israel continued to exchange missile strikes, uncertainty returned to markets and weighed on equity indices. President Trump’s remarks indicating he had stepped back from earlier threats targeting Iranian energy infrastructure provided some support to sentiment while negotiations were ongoing. Nevertheless, rising oil prices on Thursday, following a three-day decline, brought the rally to an end, with both the S&P 500 and NASDAQ falling by more than 0.5%. AI-related stocks were among the hardest hit, as higher energy prices are expected to increase the operating costs of hyperscale data centres. Overall, it was a turbulent week for US equities, with the S&P 500 and NASDAQ closing -3.63% and -4.87% lower.
In corporate developments, Berkshire Hathaway announced that it had acquired a stake in Tokio Marine, one of Japan’s largest non-life insurers. The $1.8 billion investment will see Berkshire—now led operationally by Greg Abel—acquire a 2.5% stake in the business, while also reinsuring a portion of Tokio Marine’s policies and collaborating on future M&A opportunities. This marks Berkshire’s second major investment in Japan, following earlier investments coordinated by Warren Buffett in trading houses such as Mitsubishi Corporation, Itochu Corporation and Mitsui & Co. Elsewhere, in the pharmaceutical sector, Merck & Co. agreed to acquire Terns Pharmaceuticals in a deal valued at $5.7 billion. Merck is the developer of the oncology drug Keytruda, which is used in the treatment of various cancers, including lymphoma and melanoma. However, the drug’s patent is due to expire in 2028, which is expected to negatively impact revenues. As a result, Merck has embarked on an acquisition strategy, with Terns representing its latest addition. Terns is developing treatments for rare blood and bone cancers caused by genetic mutations, with its lead candidate, TERN-701, expected to enter late-stage trials in late 2026 or early 2027.
In technology, Apple Inc. announced that it will add four US manufacturing companies to its American Manufacturing Program, aimed at expanding domestic production of key components. The $400 million initiative, which runs through 2030, will involve companies such as Bosch and Cirrus Logic developing sensors and integrated circuits. Bosch will also partner with Apple and TSMC to produce sensor-related chips at TSMC’s facility in Washington State.
In Europe, markets rose strongly in the early part of last week, as hopes of de-escalation in the Middle East eased concerns around inflation and interest rates. The Euro Stoxx 50 and STOXX Europe 600 both recorded gains of close to 2% by Wednesday. However, much of these gains were reversed on Thursday amid a sharp sell-off, as renewed uncertainty in the Middle East weighed on market sentiment. For the week, the Euro Stoxx 50 and STOXX Europe 600 closed higher, up 1.68% and 1.86%, respectively, aided by the significant rally on Monday which offset the midweek declines.
In corporate developments, Danone announced that it had acquired UK-based nutrition brand Huel in a deal valued at close to €1 billion. The acquisition reflects Danone’s continued expansion into the fast-growing active nutrition segment, driven by increasing consumer focus on health and wellness. Huel has gained significant popularity among younger professionals, supported in part by promotion through media such as The Overlap. The company will continue to operate independently while reporting into Danone. Elsewhere, SK Hynix, a leading producer of high-bandwidth memory (HBM) chips, agreed to purchase nearly $8 billion worth of extreme ultraviolet lithography equipment from ASML. This represents the largest single customer order in ASML’s history and highlights its critical role in the global semiconductor supply chain. Finally, Ferrari has resorted to transporting customised supercars to high-net-worth clients in the Middle East via cargo aircraft, as standard delivery routes have been disrupted by the conflict. Air transport can cost four to five times more than sea freight; however, strong demand has led customers to absorb the premium.
In the United Kingdom, the FTSE 100 rose earlier in the week as optimism around a potential de-escalation in Iran supported market sentiment, even as oil majors were pressured by falling oil prices. The heavy weighting of companies such as Shell plc and BP limited gains relative to European peers, although the index still rose by over 1% before Thursday. These gains were subsequently reversed as uncertainty increased regarding the likelihood of US–Iran negotiations. Despite declines between Wednesday and Friday, the rally on Monday was enough for the FTSE 100 to close 1.83% higher for the week.
