The Americans and Iranians traded a few shots yesterday near the Strait of Hormuz, costing the peace camp and equity indices a few points. Each belligerent accused the other of having started it. To twist a ready-made phrase, all is fair in war. Donald Trump, who needs the conflict to end for political reasons, insisted that the ceasefire is still in force. He added one of his usual punchlines, threatening Tehran to "knock Iran out" if the country drags its feet in signing a peace agreement. That is less biting than "sending the country back to the Stone Age" or ensuring its people "live in hell". The carrot-and-stick approach has not really borne fruit so far, and markets, which the day before yesterday were getting excited about a swift exit from the crisis, have once again revised their view.

European equities generally gave back more than 1%, while Wall Street managed the disappointment a little better, limiting losses to 0.4% on the S&P 500. The story has not changed in New York: anything that looks remotely like AI is being bought frantically. Stocks that are not posting double-digit gains are losers. Datadog, which raised its guidance, gained 31% yesterday, for example. That is rather more exciting than watching your Sanofi shares move.

To give you an idea of investors' level of frenzy, just look at Anthropic's valuation curve. The company is not listed, but the successive funding rounds made necessary by the tens of billions swallowed up in boosting its computing capacity give a good idea of its heft and current returns on investment. In March 2025, the financiers who bought into the company did so on the basis of a USD61.5bn valuation. Those who arrived in September 2025 paid three times as much, USD183bn, but that was still half what the latecomers paid in February 2026, USD380bn. Three months later, that is, right now, rumour has it that those wanting to buy into Anthropic will do so on the basis of a USD1,000bn valuation. Since February, people have realised that Claude can hack complex systems, pilot killer drones, manage multiple tasks, replace whole boxes of developers and even enable your granny to code her own dating app for her Doro.

In these conditions, how can investors be expected to keep hunting for the latest value gem nobody has spotted? The 2026 investor is drawn to AI just as the acne-covered teenager in lockdown was once drawn to cryptocurrencies. So much for risk management.

In the real world, the latest twists in the Middle East have halted oil's retreat. That is not the White House's only headache. The US courts have rejected the 10% tariffs meant to replace those that had previously been struck down. The Trump administration will have to find another stratagem to bring them back. Europeans, for their part, have won a reprieve. The US president has abandoned plans to raise tariffs on European cars. He has given the EU until 4 July to conclude a final trade agreement.

The final session of the week, a public holiday but not a non-working day in France, otherwise I would have got up far too early for nothing, will be marked by the publication of the NFP, the monthly US employment report. The latest indicators show that the labour market is not weakening across the Atlantic, and that the first AI-related layoffs are not creating an insurmountable problem.

In another register, Bloomberg has calculated that the Japanese authorities may have spent an additional USD30bn to support the yen by intervening in foreign-exchange markets in recent days, after already spending USD34bn a little earlier.

In Asia-Pacific, markets are retreating in orderly fashion after recent gains. While Australia is down 1.5%, other markets are generally limiting their declines to less than 1%. South Korea, the world's most prolific market in 2026, still struggles to fall: down just 0.1% this morning, with a fifth consecutive week of gains for the KOSPI. Europe is expected to open in the red this morning, despite gains in US futures.

Today's economic highlights: 

See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$4,727.74
  • Crude Oil (BRENT): US$100.95
  • United States 10 years: 4.38%
  • BITCOIN: US$79,484.5

In corporate news:

  • Shell's CEO warned that the oil market is facing a shortfall of nearly one billion barrels due to the Iranian conflict.
  • Commerzbank posted higher consolidated profit in Q1 despite a decline in net interest income.
  • Clariant reported lower first-quarter sales.
  • Evonik is seeing stronger demand for certain chemicals following the disruption in the Middle East.
  • Lonza confirmed its targets for the 2026 financial year.
  • Pirelli reported Q1 figures above consensus expectations.
  • Leonardo appointed Lorenzo Mariani as chief executive officer.
  • Eni launched the first tranche of its new share buyback programme.
  • Logitech launched a new share buyback programme after completing the previous one.
  • Novartis has started construction of a cancer therapies manufacturing facility in Texas.
  • Atlantic Lithium reached a buyout agreement with China's Huayou Cobalt.
  • Interroll acquired Royal Apollo Group in the Netherlands.
  • Main earnings releases today: Intesa Sanpaolo, Commerzbank, Amadeus IT Group, International Consolidated Airlines Group
  • The Trump administration is considering inviting the CEOs of Nvidia, Apple and Exxon on its trip to China, according to Semafor.
  • OpenAI's AI chip project with Broadcom has hit an USD18bn funding obstacle, The Information reported.
  • Private debt fund Blue Owl will reduce its exposure to the software sector, according to its CEO.
  • Spatial analytics company HawkEye was valued at USD3.15bn for its NYSE debut.
  • Iren is expanding its AI cloud platform into Europe through the acquisition of Nostrum Group.
  • Cloudflare will cut around 20% of its workforce as AI reshapes its operations.

See more news from UK listed companies here

Analyst Recommendations:

  • M&G Plc: Mediobanca maintains its underperform recommendation and reduces the target price from GBX 250 to GBX 247.
  • Coca-Cola Hellenic: Bernstein maintains its outperform recommendation and reduces the target price from EUR 58.30 to EUR 57.10.
  • Marks & Spencer Group Plc: Citi maintains its buy recommendation and reduces the target price from GBP 4.30 to GBP 4.10.
  • Shell Plc: Goldman Sachs maintains its buy recommendation and raises the target price from EUR 45 to EUR 47.
  • Hsbc Holdings Plc: Keefe Bruyette & Woods maintains its outperform rating and raises the target price from GBX 1470 to GBX 1500.
  • Antofagasta Plc: AlphaValue/Baader Europe maintains its sell recommendation and raises the target price from GBX 2569 to GBX 3029.
  • Barclays Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 590 to GBX 630.
  • Avolta Ag: Mediobanca maintains its outperform recommendation and reduces the target price from CHF 56 to CHF 54.
  • Swiss Re Ltd: Mediobanca maintains its neutral recommendation and reduces the target price from CHF 145 to CHF 140.
  • Nexi S.p.a: Mediobanca maintains its neutral recommendation and raises the target price from EUR 3.80 to EUR 4.50.
  • Rheinmetall Ag: Mediobanca maintains its outperform rating and reduces the target price from EUR 2210 to EUR 2140.
  • Continental Ag: JP Morgan maintains its overweight recommendation and raises the target price from EUR 75 to EUR 78.
  • Deutsche Bank Ag: Oddo BHF upgrades to outperform from neutral with a price target raised from EUR 32 to EUR 34.