Donald Trump repeatedly described the conflict in Iran as an "excursion", implying it would be over within a matter of weeks. After a prolonged spell of doubt, Wall Street now seems to agree. Earlier this week, the S&P 500 had already erased all the losses suffered since the first strike, turning the episode into a wash for the market. It is the V-shaped rebound we referred to a few days ago. Yesterday, the broad US index went one better, climbing to a new all-time high above the symbolic 7,000-point mark. The strength of the rally is striking. The S&P 500 has posted just one losing session since the start of April. The Nasdaq has been even stronger, racking up 11 consecutive advances. I went back over the chart this morning: the last streak of that length dates back to December 2019, and one has to go back to July 2017 to find 12 successive gains.

As we have noted repeatedly in these columns, the economic aftershocks will continue to spread long after the fighting itself has stopped. Shipping through the Strait of Hormuz remains close to paralysed, caught between Iranian controls and the US blockade. But equity markets look ahead. Investors are betting that the conflict is now moving towards resolution and that conditions will gradually return to normal. Several media reports yesterday suggested that the ceasefire between the United States and Iran could be extended, with a further round of talks between negotiators from both sides expected in Islamabad in the coming days.

A few telling details capture the change in mood. Yesterday, The Washington Post reported that the Pentagon would send several thousand additional troops to the Middle East. Two weeks ago, such a headline would almost certainly have rattled investors. Yesterday, it barely caused a ripple. The story did not even flash up in red on Bloomberg. The conflict is not formally over and its effects are still plainly visible, but the market has already turned its attention elsewhere. Donald Trump has even gone back to harrying Jerome Powell, which tells you everything about how quickly normal service is resuming.

In Europe, Wednesday's session ended modestly lower, with the exception of the DAX. The main drag came from luxury stocks, which sold off sharply after results from Hermès and Kering. The two shares fell 8% and 9% respectively. In Kering's case, the move suggests the recovery in sales investors had hoped for following Luca de Meo's arrival will take longer to materialise. That ought not to have come as a surprise, but the market had got carried away a few months ago, driving the stock sharply higher on hopes of a swift turnaround. Hermès was a slightly different story. A fall of that size is unusual, though not without precedent after recent earnings. Even the sector's standout performer is not immune from the turbulence hitting luxury goods, an industry that was already under pressure before the conflict in the Middle East, one of its natural growth markets.

In the United States, as mentioned, the S&P 500 and Nasdaq both closed firmly higher. The Dow Jones, by contrast, ended slightly lower. Investors welcomed results from Bank of America and Morgan Stanley, but weakness in energy and industrial stocks weighed on the index. This week, US banks, Wells Fargo aside, have all delivered very strong numbers. Two factors explain the strength of those results: buoyant trading revenue amid elevated volatility, and a pick-up in mergers and acquisitions.

Today, corporate earnings will again set the tone. PepsiCo reports around midday, while Netflix is due after the close. In Europe, Pernod Ricard and Tesco are also reporting. The macroeconomic calendar is busy too, especially in China, where first-quarter 2026 growth came in at 5% year on year, ahead of expectations. Retail sales, however, were slightly softer than forecast. A heavy run of US data is due early this afternoon. In Europe, the calendar is thinner, although there is some market chatter around the ECB. Bloomberg reports that the central bank is expected to leave rates unchanged at its 30 April meeting.

In Asia-Pacific, the rally rolls on. Japan and Hong Kong are up 1.5%, while South Korea is adding 1.9%. Australia is down 0.4%. Taiwan is worth noting this morning, not because its gain is especially dramatic at 0.9%, but because it is enough to lift the total market capitalisation of Taiwanese equities above that of the UK market. With no meaningful technology segment to speak of, Europe has now been pushed firmly into the second tier, even if much of Taiwan's market strength still rests on TSMC, which accounts for more than 40% of the benchmark. Futures are pointing to a slightly firmer start in Europe this morning.

Today's economic highlights:

Today's agenda includes: in China, the House Price Index, Fixed Asset Investment, Retail Sales, Industrial Production, GDP Growth Rate YoY and QoQ, and FDI; in Australia, Employment Change, Unemployment Rate, Full Time Employment Change, and RBA Hunter Speech; in the United Kingdom, Goods Trade Balance Non-EU, GDP MoM, GDP 3-Month Avg, Goods Trade Balance, Industrial Production MoM, and Manufacturing Production MoM; in the Euro Area, ECB Monetary Policy Meeting Accounts; in the United States, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Fed Williams Speech, and Industrial Production MoM. See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$4,825.58
  • Crude Oil (BRENT): US$94.96
  • United States 10 years: 4.28%
  • BITCOIN: US$75,052.7

In corporate news:

  • JD Sports Fashion plans to sell 11 million shares in Applied Nutrition through an accelerated bookbuild, reducing its stake in the company.
  • Madison Air raised $2.2 billion in its U.S. IPO, valuing the company at $13.2 billion.
  • Organigram completed its €107.3 million acquisition of Sanity Group, including a private placement with British American Tobacco.
  • Standard Life announced a £2.0 billion acquisition of Aegon UK's insurance and pensions operations.
  • Antofagasta reported a 19% quarterly drop in copper production but maintained its 2026 production and cost guidance.
  • Barratt Redrow reaffirmed its full-year guidance for home completions and profit, while reducing land investment due to macroeconomic uncertainties.
  • Barry Callebaut reports a rise in half-year net profit despite a fall in turnover.
  • Saipem wins two offshore contracts in Saudi Arabia worth around $400 million.
  • The former CEO of Banca Monte Dei Paschi, Luigi Lovaglio, has been re-elected to everyone’s surprise.
  • Fincantieri has secured its first contract with the US Navy for the LSM programme.
  • JD Sports Fashion is selling shares in Applied Nutrition via an accelerated placement.
  • Freenet is launching a strategic review of waipu.tv, with the option of an IPO under consideration.
  • Proximus appoints Cécile Coune as chair of the board of directors.
  • Gerresheimer’s creditors agree to postpone the deadline for publishing the annual accounts.
  • Swedish firm Sivers Semiconductors is considering a dual listing on the Nasdaq in New York.
  • Doug Field, a former executive at Tesla and Apple, is leaving Ford as part of a reorganisation, the WSJ reports.
  • Johnson Controls is considering selling off businesses valued at up to $4.5 billion, according to Bloomberg.
  • Alphabet could realise $100 billion in capital gains from its investment in SpaceX, again according to Bloomberg.
  • Snap is laying off 1,000 people, citing advances in AI.
  • Live Nation Entertainment has illegally monopolised the ticketing market, according to a federal jury in New York.
  • PPG is acquiring road marking manufacturer Ozark Materials.
  • L3Harris has announced a $1 billion expansion to boost its production of solid-propellant rocket motors in Virginia.
  • Today’s key earnings reports: Netflix, PepsiCo, Abbott, Charles Schwab, Prologis, Tesco, Aker BP, VAT Group, Rentokil…

See more news from UK listed companies here

Analyst Recommendations:

  • Antofagasta Plc: Berenberg downgrades to hold from buy with a target price of GBX 3700.
  • Astrazeneca Plc: DNB Carnegie maintains its buy recommendation and raises the target price from SEK 1850 to SEK 1920.
  • Bytes Technology Group Plc: UBS downgrades to neutral from buy and reduces the target price from GBX 415 to GBX 305.
  • Diageo Plc: HSBC maintains its hold recommendation and reduces the target price from GBP 18 to GBP 17.
  • Anglo American Plc: Oddo BHF upgrades to outperform from neutral with a price target raised from GBP 27.50 to GBP 42.50.
  • Shell Plc: TPH&Co. maintains its buy recommendation and raises the target price from USD 85 to USD 100.
  • Halma Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 45.50 to GBP 49.30.
  • Quilter Plc: Citi maintains its neutral recommendation and reduces the target price from GBP 2 to GBP 1.90.
  • Ceres Power Holdings Plc: Jefferies maintains its buy recommendation and raises the target price from GBX 460 to GBX 480.
  • Rio Tinto Plc: Macquarie maintains its outperform recommendation and raises the target price from GBP 70 to GBP 76.
  • St. James's Place Plc: Citi maintains its buy recommendation and reduces the target price from GBP 18.70 to GBP 18.10.