MARKET WRAPS
Stocks:
U.K. shares were lower Friday in thin trading with markets across Europe closed for May Day.
The Stoxx 600 snapped a four-day losing streak yesterday to finish April up 4.83%, its largest monthly gain since January 2025.
"For a change, geopolitics was not the main market driver yesterday," Jefferies said. The focus was on earnings and central bank decisions where the Bank of England and European Central Bank sounded more cautious on raising interest rates than expected , Jefferies added.
Oil prices remained elevated with U.S.-Iran talks still at an impasse.
Iran warned the U.S. on Thursday against potential military action after Axios reported that the U.S. was considering fresh strikes to break the negotiating deadlock .
Trump faces a U.S. deadline today to end the war or make the case to Congress for extending it.
Stocks to Watch
AstraZeneca lost around 1.8% in opening trading after its breast-cancer candidate drug failed to get backing at a key advisory committee vote.
Carlsberg can keep delivering growth, Berenberg said.
"On our forecasts, we believe that Carlsberg has potential to consistently deliver high-single-digit earnings growth over the coming years."
Economic Insight
One or two precautionary rate hikes by the ECB could help reassure markets and anchor inflation expectations, while retaining the flexibility to reverse course quickly once the outlook becomes clearer, Insight Investment said.
Market Insight
Europe's jewelers and watchmakers can expect a boost from a changing energy and commodity landscape, RBC Capital Markets said.
Falling gold and silver prices is good news for companies like Richemont, Swatch and Pandora. Those groups also have relatively little exposure to higher oil prices.
Sporting-goods companies, however, look more exposed than other apparel and fashion sectors to a hit from high oil prices, RBC Capital Markets added.
The potential implication for financial performance at Nike, Adidas and Puma is "very negative," the bank said.
U.S. Markets:
Stock futures were trading around flat.
In April, the S&P 500 and the Nasdaq posted their best monthly performance since November and April 2020, respectively.
Strong results from Alphabet and Caterpillar had helped push indexes higher.
In what was a recurring theme for markets in April, enthusiasm for corporate earnings and the AI revolution trumped concerns over conflict, inflation and interest rates.
Forex:
The dollar rose on higher oil prices and demand for safe havens with the U.S. and Iran no closer in reaching a peace deal.
The euro strengthened against the dollar.
ING said the ECB's decision to leave interest rates unchanged Thursday probably had little impact on the euro.
"Given the volatility in oil markets yesterday, it has been hard to disentangle how much impact communication from the ECB has had on short-dated euro interest rates and the euro."
Sterling was lower versus the euro.
ING said the paring of U.K. interest-rate rise expectations Thursday likely reflected oil prices easing rather than the BOE decision.
The greenback fell to a two-month low against the yen .
ING said Japanese authorities appeared to have intervened to shore up the yen on Thursday and could take more action.
Bonds:
Treasury yields traded steady , with continued uncertainty surrounding the war in the Middle East offset by oil prices dropping back following a large spike early on Thursday.
Deutsche Bank said Treasury yields fell on Thursday largely due to the drop in oil prices easing concerns around inflation.
Trade is quiet, with European markets closed for the May 1 holiday.
HSBC expects the Treasury to leave nominal coupon and floating rate note auction sizes unchanged for a ninth consecutive quarter , in line with previous forward guidance.
Yields on gilts rose following the BOE rate decision.
BOE Governor Andrew Bailey signaled a possibility that rates could have to rise in future to temper the effects of higher energy prices, although he didn't suggest there was any urgency for now. Markets scaled back high expectations for rate increases.
Energy:
Oil prices remained in triple-digit territory after hitting a wartime high in the previous session.
The international oil benchmark surged to its highest in four years on Thursday, before easing by the close as markets await progress in negotiations.
Metals:
Gold prices were headed for a weekly loss as higher oil prices fuel expectations that central banks might keep interest rates higher for longer . Silver futures and platinum also fell.
Citi expects gold to remain under pressure in the near term amid Middle East uncertainty, particularly "in the case of higher oil prices and another wave of equity market correction." It reiterates a $4,300/oz target for the next 0-3 months.
Aluminum
LME 3-month aluminum was higher.
Bank of America pulled forward its $4,000/metric ton aluminum-price forecast to 4Q 2026 from 2Q 2027, citing damage to smelters in the Middle East.
EMEA HEADLINES
AstraZeneca's Breast-Cancer Candidate Drug Loses FDA Panel Vote
British pharmaceutical group AstraZeneca said it would continue to work with U.S. regulators on a review of its breast-cancer candidate after the drug failed to get backing at a key advisory committee vote.
The Food and Drug Administration's oncologic drugs advisory committee voted six to three against the benefit-risk profile of camizestrant, a candidate drug for the treatment of breast cancer, the FTSE 100-listed drugmaker said late Thursday.
U.K. Bank NatWest Expects Income at Top End of Range
NatWest expects revenue for the year to come in at the top end of its guided range after reporting a strong start to 2026.
The British high-street bank now expects total income excluding notable items for the year at the upper end of the 17.2 billion to 17.6 billion pounds ($23.40 billion-$23.94 billion) range, based on its updated expectations on interest rates and economic conditions.
Pearson Sticks to Guidance After Key Metric Rises
Pearson said it remains on track to meet its full-year guidance after reporting higher underlying sales for the first quarter, mainly driven by growth in its virtual learning division.
The London-listed education company said Friday that underlying group sales rose 4%. Virtual learning sales surged 21%, reflecting strong enrolment momentum for the 2025-26 academic year, with enrolment growth increasing to 15%.
U.S. to Remove Tariffs on Scotch Whisky After King Charles-Trump Meeting
The U.S. will remove tariffs on whisky from the United Kingdom, the Trump administration announced.
President Trump posted on social media that King Charles III persuaded him to lift the levies. "The King and Queen got me to do something that nobody else was able to do, without hardly even asking!" Trump posted.
GLOBAL NEWS
Stock Futures Higher, Oil Elevated as European and Asian Markets Shut
U.S. stock futures edged higher after most major indexes recorded their best month in six years, as the continued impasse in U.S.-Iran peace talks took a back seat.
Market sentiment was driven by renewed optimism around technology, even as Brent crude oil remained above $100 a barrel on the continued effective closure of the Strait of Hormuz.
Iran Is Grasping for a Solution to an American Blockade It Can't Break
For almost five decades, Iran's Islamic government has survived financial pressure from the U.S. by selling oil to China. It confronted American military might with guerrilla tactics. But with the U.S. Navy's blockade, that strategy might have met its match, analysts said.
Tehran thought it was gaining the upper hand after the war started in February as it attacked ships navigating the Strait of Hormuz, shutting down commercial traffic and blocking a fifth of the world's oil and liquefied natural gas supplies. Six weeks into the conflict, the U.S. responded by blockading shipments from all Iranian ports.
Unprecedented AI Spending Is Rewriting Big Tech's Earnings Season Playbook
The rules have changed for Big Tech earnings season. Beating expectations and providing good guidance isn't enough anymore, and it's not entirely clear what the mark for enough is. During Wednesday afternoon's lightning round of Microsoft, Alphabet, Amazon.com, and Meta Platforms reporting earnings all at once, the reactions were mixed and at times chaotic.
What's changed is the massive spending spree on artificial-intelligence data centers, on which the four companies will spend a total of around $700 billion this year. With the exception of Amazon, these have been relatively asset-light companies with high free cash flow. Now their balance sheets are starting to look more like manufacturers than tech companies, and free cash flow is dwindling. Amazon already has free cash outflows, and Meta may join it later this year. Because of that pressure, both Meta and Alphabet opted not to buy back any shares in the first quarter after spending a combined $28 billion on share repurchases in the first quarter of 2025.
Trump Poised to Defy Congress on War Authorization
The Trump administration is on course to blow past an initial deadline for congressional approval for the Iran war on the grounds that the ongoing cease-fire stopped the clock on a 60-day deadline-an assertion met with outrage from Democrats and skepticism from Republicans on Capitol Hill.
Under a 1973 law called the War Powers Resolution, the president is required to notify Congress within 48 hours of military action and withdraw U.S. troops 60 days later, unless lawmakers declare war or authorize the use of force. The expectation on Capitol Hill was that the 60-day deadline expires on Friday.
(MORE TO FOLLOW) Dow Jones Newswires
05-01-26 0517ET
