Market drivers and catalysts
Equities: US and Europe rallied on peace hopes, while Asia jumped as Korean chipmakers turned AI optimism into a sprint
Volatility: VIX stable, short-term vols higher, Iran deal focus
Digital Assets: BTC ~81k, ETH ~2.3k, altcoins mixed, IBIT inflows supportive
Fixed Income: Yields lower, curve steepening, global bond rally, oil impact
Currencies: USD weaker, EUR/GBP higher, JPY stronger, intervention watch
Commodities: Oil -7%, Iran deal hopes, metals higher, gold supported
Macro events: US sends one-page peace proposal to reopen Strait of Hormuz
Macro headlines
US-Iran peace hopes moved from a geopolitical headline to the main macro driver. Oil fell sharply on Wednesday as markets priced a lower risk of prolonged disruption in the Strait of Hormuz, after the US reportedly sent a one-page proposal through Pakistan aimed at ending the conflict and gradually reopening the waterway. Iran is expected to respond in the coming days, with nuclear talks likely to follow later. The catch is that talks are not a deal, and oil has already rebounded this morning as investors reassess how firm the progress really is. Good news, but not yet a holiday brochure.
The rate story also softened slightly as lower oil prices helped investors reduce expectations for additional rate pressure, especially in Europe and the UK. In the US, private payrolls rose by 109,000 in April, above expectations, ahead of Friday’s official jobs report, pointing to a labour market that is cooling but not cracking. That keeps the Federal Reserve in wait-and-see mode rather than giving markets a clean rate-cut signal. In Japan, Bank of Japan members said a rate hike would be appropriate if the outlook is met, with one noting that the policy rate remains well below neutral.
Sweden’s Riksbank announces its policy decision at 09:30 CEST, followed by a press conference at 11:00 CEST, with markets expecting a hold at 1.75% but watching the tone closely as higher energy prices keep inflation less comfortable. Norges Bank follows at 10:00 CEST, with its press conference at 10:30 CEST, and the decision looks more finely balanced as economists are split between a hold at 4.00% and a 25 basis-point hike, leaving the Norwegian krone sensitive to the statement.
Macro calendar highlights (times in GMT)
0930 – Sweden’s Riksbank policy decision
1000 – Norges Bank announces its policy decision
1430 – US weekly initial jobless claims
Earnings this week
Wednesday (yesterday): Disney, Uber, Arm, DoorDash, CVS Health, Marriott, Novo Nordisk, Johnson Controls.
Thursday (today): Airbnb, McDonald’s, Canadian Natural Resources, AppLovin, Realty Income, KKR
Friday: Wendy’s, Brookfield Asset Management, Enbridge.
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 rose 1.5% to 7,365.12, its largest gain since 8 April, while the Nasdaq 100 jumped 2.1% to a record 25,838.94 and the Dow gained 1.2%. Markets rallied as hopes for a US-Iran peace deal pushed oil lower, while strong earnings kept risk appetite alive. Advanced Micro Devices surged 18.6% after strong results and data-centre chip demand, Super Micro Computer rose 24.5% on renewed confidence in AI server demand, Disney gained 7.5% after earnings beat estimates, and Uber rose 8.5% after stronger bookings guidance pointed to resilient ride-hailing and delivery demand. Investors now watch whether earnings can keep matching the geopolitical relief.
Europe: The Stoxx Europe 600 climbed 2.2% to 623.25, its biggest gain since 8 April, while Germany’s DAX rose 2.1%, the FTSE 100 gained 2.2%, and the Euro Stoxx 50 advanced 2.7%. The rally followed renewed hopes for a US-Iran peace agreement, lower oil prices and stronger company updates, with banks, travel and industrial shares leading the move. HSBC rose 5.0% as banks benefited from better risk appetite, MTU Aero Engines gained 10.1% on strength in aerospace, Demant jumped 13.3% after stronger sales growth, and Novo Nordisk added 2.5% after raising 2026 profit guidance. Markets now look for confirmation that lower energy stress can support earnings.
Asia: Asian equities rose broadly, led by South Korea, where the Kospi surged 6.5% to 7,384.56 and broke above 7,000 for the first time, while Hong Kong’s Hang Seng gained 1.2% and China’s Shanghai Composite rose 1.2%. The region followed the global risk rally, but the main engine was artificial intelligence hardware demand. Samsung Electronics jumped 14.4% as its market value moved above USD 1 trillion, while SK Hynix rose 10.6% on strength in memory chips used in AI systems. Japan was closed for Golden Week, with the Tokyo Stock Exchange shut for the observed Constitution Memorial Day holiday, so investors will watch for catch-up moves when trading resumes.
Volatility
Volatility remains contained as equities extend their rally, with the S&P 500 closing at 7,365.12 (+1.46%) and the VIX holding at 17.39, signalling a market that is calm but still responsive to macro developments. Short-term measures ticked higher, with VIX1D at 11.66 (+8.47%) and VIX9D at 14.76, reflecting some near-term event sensitivity around data and earnings. For investors, the key drivers remain oil prices, bond yields and progress on a potential US–Iran agreement, which continues to underpin risk sentiment.
Based on current options pricing, the S&P 500 is implying a move of around 54 points (0.74%) into Friday’s expiry.
0DTE skew indicator: near-the-money calls are priced slightly above puts, pointing to mild upside bias and continued dip-buying rather than strong demand for protection.
Digital Assets
Crypto markets are consolidating after recent gains, with Bitcoin trading around USD 81,000 and Ether near USD 2,330, both holding close to multi-month highs despite a modest pullback. The broader tone remains constructive, supported by improving global risk sentiment and easing geopolitical tensions. Solana is holding in the high-USD 80s, XRP near USD 1.40, while Dogecoin is softer after its recent rally.
ETF flows continue to provide underlying support, with IBIT still attracting net inflows and ETHA seeing smaller but steady demand, indicating continued institutional interest. Options flow suggests investors remain selectively constructive on crypto-linked equities and miners, although positioning is more measured around event-sensitive names such as Coinbase and Strategy.
Fixed Income
Bond markets rallied as falling oil prices eased inflation concerns, pulling yields lower across the curve. The US 10-year yield declined to 4.35%, the 2-year to 3.87%, and the 30-year to 4.94%, marking a broad move into duration. Global bonds followed, with European yields also moving lower, while the US yield curve steepened modestly, with the 2s10s spread widening to 48.4 basis points. Municipal bonds saw similar demand, with long-end yields edging down.
For investors, this reflects a shift back toward a “goldilocks” narrative - cooler inflation expectations without a clear growth shock - but the durability of this move depends on oil stabilising and upcoming data confirming the trend.
Commodities
Commodities moved sharply as geopolitics drove sentiment, with oil leading declines and metals benefiting from improved risk appetite. WTI crude fell 7% to USD 95.08, while Brent dropped 7.83% to USD 101.27, briefly trading below USD 100 for the first time since April, as hopes for a US–Iran deal raised expectations of increased supply.
In contrast, precious and industrial metals rallied: gold gained as yields eased and safe-haven demand persisted, silver surged 5.07%, and copper rose to USD 13,392 per ton on improving growth sentiment. For investors, the key question is whether lower energy prices can sustain the current equity rally while supporting margins and easing inflation pressures.
Currencies
The US dollar weakened as geopolitical tensions eased, with the Bloomberg Dollar Spot Index falling 0.6% to its lowest level since late February. EURUSD rose to 1.1749 and GBPUSD to 1.3594, reflecting improved global risk sentiment and limited hedging demand ahead of UK local elections. The Japanese yen strengthened, with USDJPY falling around 1% to 156.36, after briefly touching 155.04, fuelling speculation of official support.
Strategists suggest authorities may tolerate further yen strength, but not a sharp move toward deflationary levels. For investors, FX markets are increasingly driven by the same theme as equities and bonds: whether geopolitical relief translates into sustained macro stability.
