Update Equities: Geopolitics and earnings push markets higher
Equity markets were positive this week. Some major indices were able to reach fresh all-time highs, while others are just a small step away. This increase was mainly driven by optimistic news on a possible deal between the US and Iran and by solid company earnings.
The US and Iran are exploring a potential deal to end their ongoing conflict, as President Donald Trump looks for a way out of a war that has pushed up energy prices and hurt his domestic political standing. The US has presented Iran with a short, preliminary proposal that would gradually reopen the Strait of Hormuz and lift the US blockade on Iranian ports. More detailed negotiations on Iran’s nuclear programme would follow later, and no agreement has yet been reached.
The talks come after weeks of escalating tensions, including US and Israeli strikes on Iran, which disrupted global oil markets and sent gasoline prices sharply higher in the US. Iran is expected to respond via mediator Pakistan, although Iranian officials have already signalled concerns about parts of the proposal. Markets reacted cautiously but positively. However, Israel remains sceptical and says it will continue pressuring Iran until its nuclear and missile capabilities are fully dismantled. The situation remains fluid and can change rapidly.
This week there were still a number of companies presenting their earnings, which showed solid performance across several sectors, though share-price reactions varied. Semiconductor company AMDstood out with strong results, driven by booming artificial intelligence (AI) and datacentre demand. Revenue jumped by 38% and profits beat expectations, while management issued upbeat guidance for the second quarter. Investor confidence pushed the stock notably higher. Equipment provider Arista Networks also delivered strong growth and exceeded forecasts, supported by rising AI‑related networking demand. Despite this, the share price fell sharply, as investors reacted to high expectations and concerns around supply constraints.
Uber Technologies reported higher earnings, strong trip growth and better‑than‑expected guidance, signalling continued momentum. The share price responded positively. Walt Disneyalso surprised positively with solid revenue growth and a sharp improvement in streaming profitability. Management expects double‑digit earnings growth in 2026, driving a strong rally in the stock. Other companies, like Rheinmetalland Shell, posted solid profits, but saw shares dip due to weaker‑than‑expected revenue and capital allocation concerns, respectively.
Joost Olde Riekerink