Tuesday 19th May 2026
Weekly Market Update
Overview
Last week, global markets remained under pressure as rising inflation, higher oil prices, increasing bond yields, and ongoing geopolitical tensions continued to weigh on investor sentiment. Developed markets including the U.S., Europe, and Japan saw mixed to weaker performance, with investors becoming concerned that central banks may keep interest rates higher for longer due to persistent inflation and elevated energy costs. Technology and AI-related stocks experienced some profit taking, while defensive sectors such as healthcare and energy generally outperformed. In emerging markets, China and India both ended lower as investors remained cautious despite resilient economic data and signs of stable U.S.-China relations, while MENA markets stayed relatively resilient due to strong oil prices and solid economic fundamentals across the Gulf region. Commodity markets remained highly focused on Middle East tensions and risks to global oil supply, keeping oil prices elevated and adding to inflation concerns worldwide. Meanwhile, currency markets stayed volatile, with the U.S. dollar remaining strong as investors sought safe-haven assets amid geopolitical uncertainty and expectations of prolonged higher interest rates.
The Week Ahead
TUE: US Fed Governor Christopher Waller Speech- Investors will closely watch for any comments on inflation, interest rates, and the outlook for future Federal Reserve policy decisions.
WED: US Crude Oil Inventories Data- The report will provide insights into U.S. oil supply and demand conditions, which could influence energy prices and inflation expectations.
THU: US Initial Jobless Claims Report- Markets will monitor labour market strength through weekly unemployment claims data for signs of economic resilience or slowing employment conditions.
FRI: US Federal Reserve Balance Sheet Data- The update will show the pace of the Fed’s balance sheet reduction and overall liquidity conditions within the financial system.
Outlook: The tug-of-war between global economic growth and inflation appears to have reached a more feasible balancing point, giving central bankers room to cut interest rates further. We continue to own equities, buying high-quality, profitable, blue-chip equities with strong balance sheets and positive free-cashflow yields. Fixed-income securities also offer attractive yields at these levels, without subjecting portfolios to much downside risk. Emerging market equities and small companies are also available at attractive valuations relative to US Blue Chips. The overall outlook for equities remains cautiously optimistic, supported by a more dovish US Federal Reserve and a resilient US economy, though global risks and sector-specific performance will be closely watched.
Asset class forecasts*
Developed Markets
North America
Last week, U.S. markets ended slightly lower as concerns over rising inflation, higher oil prices, increasing Treasury yields, and geopolitical tensions outweighed continued optimism around large technology and AI-related stocks. Inflation data came in hotter than expected, with consumer and producer prices both rising sharply in April, mainly driven by higher energy costs, which increased worries that the Federal Reserve may keep interest rates elevated for longer. The U.S. 10-year Treasury yield climbed to around 4.59%, its highest level in over a year, putting additional pressure on equities and bonds. On the economic front, retail sales continued to grow at a slower pace, indicating resilient but moderating consumer spending, while jobless claims edged slightly higher, pointing to some softening in the labour market. Within the equity market, energy stocks performed best due to rising oil prices, whereas consumer discretionary, real estate, and materials sectors lagged.
Europe & UK
Last week, European markets ended lower as geopolitical tensions, rising energy prices, and concerns about inflation continued to pressure investor sentiment despite generally strong corporate earnings results. The pan-European STOXX Europe 600 Index declined, while major markets including Germany, France, Italy, and the UK also closed in negative territory. Investors remained cautious as stalled U.S.-Iran peace talks raised fears of higher oil prices, which could keep inflation elevated and interest rates higher for longer. Economic data from the eurozone showed industrial production growth was weaker than expected, with Germany’s output declining while France, Italy, and Spain recorded modest improvements. In France, unemployment rose to its highest level since 2021, highlighting ongoing labour market weakness. In Germany, investor sentiment improved slightly from April levels but remained negative due to concerns over weak industrial activity, high energy costs, and persistent inflation. Meanwhile, in the UK, political uncertainty surrounding Prime Minister Keir Starmer added pressure on markets, while retail sales contracted sharply in April, reflecting weaker consumer spending.
Japan
Last week, Japanese markets delivered mixed performance as investors booked profits in semiconductor and AI-related stocks after recent strong gains, while financial and value-oriented sectors benefited from rising bond yields and expectations that the Bank of Japan may continue normalizing monetary policy. The Nikkei 225 declined, whereas the broader TOPIX Index ended higher. Investor sentiment remained cautious due to concerns that rising oil prices could hurt Japan’s economy by increasing import costs and weakening household consumption, given the country’s reliance on imported energy. Meanwhile, the Japanese yen weakened further against the U.S. dollar despite suspected intervention by Japanese authorities, as markets continued focusing on the gap between the Federal Reserve’s tighter policy stance and the BoJ’s still-accommodative approach. Japan’s 10-year government bond yield climbed to its highest level since 1997 amid growing expectations of a possible BoJ interest rate hike in the coming months. Economic data also highlighted rising cost pressures and weak consumer demand, with corporate input prices rising sharply due to higher energy and chemical costs, while household spending declined more than expected.
Emerging Markets
China
Last week, Chinese markets ended lower as early optimism from the Trump-Xi summit and stronger-than-expected economic data faded later in the week. Mainland Chinese indexes posted modest declines, while Hong Kong equities underperformed due to continued caution around internet and export-related sectors. Investor sentiment was initially supported by signs of stable U.S.-China relations and resilient economic data, but markets lost momentum as the summit produced no major policy breakthroughs or rollback of trade restrictions. The meeting between Donald Trump and Xi Jinping reinforced expectations that both countries want to avoid further escalation in trade and technology tensions, helping limit downside risks for regional markets. Economic data also showed China’s services sector expanded faster than expected, supported by stronger domestic demand, although export orders remained weak. Inflation data surprised on the upside, with producer prices rising at the fastest pace since 2022 due to higher commodity and energy prices, while consumer inflation also strengthened modestly. Strong export and import growth further highlighted resilience in external demand and domestic activity, reducing expectations for additional large-scale monetary easing from Beijing in the near term.
India
Last week, Indian markets remained under pressure and ended lower due to broad-based selling across major sectors amid rising investor concerns over global macroeconomic conditions and increased market volatility. The Nifty 50 posted a sharp weekly decline, while broader markets including midcap stocks also weakened, indicating a wider risk-off sentiment among investors. Market volatility increased notably, with the India VIX rising sharply, reflecting higher investor anxiety and uncertainty. Defensive sectors such as pharma, healthcare, and metals outperformed and managed to post gains as investors shifted toward relatively safer areas of the market. On the other hand, growth-oriented and interest rate-sensitive sectors saw heavy selling pressure, with real estate, IT, consumer durables, and auto stocks leading the declines. Financials and oil & gas sectors also remained weak, while FMCG stocks were relatively stable compared to the broader market correction.
MENA
Last week, MENA markets remained relatively resilient despite rising geopolitical tensions and uncertainty surrounding the Strait of Hormuz, with investors closely monitoring oil prices, regional security developments, and global inflation concerns. Higher energy prices continued to support Gulf economies, particularly in the UAE and Saudi Arabia, while strong fiscal positions and ongoing economic diversification efforts helped maintain investor confidence across the region. Markets were also supported by expectations that GCC economies will continue to outperform many global peers due to robust non-oil growth, infrastructure investment, and strong banking sector fundamentals. However, concerns around regional conflict and trade disruptions kept volatility elevated, especially as tensions involving Iran and shipping routes in the Gulf remained in focus. Overall, sentiment in the region stayed cautiously optimistic, supported by resilient economic fundamentals despite short-term geopolitical risks.
Commodities and Forex
Commodities
Last week, global commodity markets remained highly focused on Middle East tensions and disruptions to oil supply routes, particularly around the Strait of Hormuz, which continued to keep energy prices elevated and markets volatile. Oil prices stayed above the $100 per barrel level despite occasional declines driven by hopes of diplomatic progress between the U.S. and Iran. Investors remained concerned that prolonged conflict and supply disruptions could fuel global inflation, pressure central banks to maintain higher interest rates, and slow economic growth. Energy markets were further supported by falling global oil inventories and concerns from the International Energy Agency that commercial stockpiles are being depleted rapidly. At the same time, uncertainty around shipping routes, sanctions, and production losses across the Middle East continued to create volatility in commodities, freight, and broader financial markets. Overall, commodity markets remained cautious as investors balanced geopolitical risks against expectations for potential diplomatic negotiations and eventual stabilization in oil supply.
Currencies
Last week, global currency markets remained volatile as investors reacted to rising inflation concerns, elevated oil prices, and ongoing geopolitical tensions in the Middle East. The U.S. dollar stayed relatively strong against most major currencies as markets increasingly expected the Federal Reserve to keep interest rates higher for longer following hotter-than-expected U.S. inflation data. Meanwhile, the Japanese yen remained under pressure near key intervention levels despite repeated warnings and suspected market intervention by Japanese authorities, as the gap between U.S. and Japanese interest rates continued to weigh on the currency. The euro and British pound also faced pressure amid concerns that higher energy prices and slower economic growth could weaken Europe’s outlook. Across Asia, several currencies weakened due to rising oil import costs and capital outflows, while investors closely monitored developments around the Strait of Hormuz and U.S.-Iran negotiations for their impact on inflation, energy markets, and global risk sentiment. Overall, currency markets remained cautious, with safe-haven demand supporting the dollar while geopolitical uncertainty and inflation fears kept volatility elevated.
Commodities
| Name | 18/05/26 | 30/04/26 | 31/03/26 | 31/12/24 |
|---|---|---|---|---|
| WTI Oil ($/barrel) | $95.42 | $105.07 | $101.38 | $71.72 |
| Brent Oil ($/barrel) | $101.29 | $114.01 | $118.35 | $74.64 |
| Gold ($/oz) | $4715.25 | $4617.85 | $4668.06 | $2624.50 |
| Natural Gas ($/mmBtu) | $2.76 | $2.77 | $2.88 | $3.63 |
Currency
| Name | 18/05/26 | 30/04/26 | 31/03/26 | 31/12/24 |
|---|---|---|---|---|
| Euro (€/$) | 1.1787 | 1.1731 | 1.1553 | 1.0354 |
| Pound (£/$) | 1.3631 | 1.3604 | 1.3227 | 1.2516 |
| Japanese Yen (¥/$) | 156.68 | 156.59 | 158.72 | 157.20 |
| Swiss Franc (CHF/€) | 0.9148 | 0.9165 | 0.9237 | 0.9401 |
| Chinese Yuan Renminbi (CNY/$) | 6.8005 | 6.8281 | 6.8944 | 7.2993 |
Index Valuations
Index Return
| Name | 1 Week (%) | Month-to-Date (%) | Quarter-to-Date (%) | Year-to-Date (%) |
|---|---|---|---|---|
| S&P 500 | 2.36% | 2.66% | 13.43% | 8.50% |
| NASDAQ Composite | 4.52% | 5.46% | 21.61% | 13.15% |
| DJ Industrial Average | 0.25% | -0.06% | 7.17% | 3.75% |
| S&P 400 | 1.67% | 1.67% | 9.67% | 12.40% |
| Russell 2000 | 1.73% | 2.20% | 14.76% | 15.81% |
| S&P 500 Equal Weight | 0.67% | 0.42% | 6.41% | 7.10% |
| STOXX Europe 50 (€) | 1.03% | 1.03% | 7.46% | 3.72% |
| STOXX Europe 600 (€) | 0.35% | 0.40% | 5.98% | 5.10% |
| MSCI EAFE Small Cap | 2.19% | 2.59% | 11.84% | 10.60% |
| FTSE 100 (£) | -1.22% | -1.36% | 0.89% | 4.35% |
| FTSE MIB (€) | 2.16% | 2.16% | 11.93% | 10.80% |
| CAC 40 (€) | 0.42% | 0.42% | 4.87% | 0.71% |
| DAX (€) | 0.19% | 0.19% | 7.31% | -0.62% |
| SWISS MKT (CHF) | -0.24% | -0.24% | 3.91% | 1.39% |
| TOPIX (¥) | 2.70% | 2.74% | 9.48% | 13.51% |
| Nifty 50 | 0.74% | 0.74% | 8.29% | -7.26% |
| Hang Seng (HKD) | 2.39% | 2.39% | 6.65% | 3.48% |
| MSCI World | 1.84% | 2.14% | 11.98% | 8.11% |
| MSCI China Free | 2.76% | 2.76% | 5.34% | -5.17% |
| MSCI EAFE | 1.10% | 1.44% | 9.10% | 7.94% |
| MSCI EM | 6.90% | 6.98% | 22.75% | 22.61% |
| MSCI Brazil (BRL) | -2.40% | -2.42% | -2.58% | 11.46% |
| MSCI India (INR) | 1.66% | 1.66% | 11.05% | -4.06% |
Fixed Income
| Name | 1 Week (%) | Month-to-Date (%) | Quarter-to-Date (%) | Year-to-Date (%) |
|---|---|---|---|---|
| Bloomberg US Aggregate | -0.39% | 0.11% | 0.22% | 0.18% |
| Bloomberg Global Aggregate | 0.07% | 0.20% | 1.45% | 0.36% |
| Bloomberg Euro Aggregate | 0.36% | 0.32% | 2.60% | 0.02% |
| Bloomberg US High Yield | 0.05% | 0.14% | 1.83% | 1.33% |
| Bloomberg Euro High Yield (€) | -0.13% | 0.00% | 1.92% | 0.39% |
Blend Fund Performance (Year-to-Date)
Direct Fund
| (18/05/26) | 1 Week (%) | 1 Month (%) | 6 Months (%) | Year-to-Date (%) | 1 Year (%) | 2 Years (%) |
|---|---|---|---|---|---|---|
| Aditum Global Discovery | -1.54% | 0.27% | -1.66% | 8.33% | 2.98% | 22.07% |
| Aditum India Explorer Fund | -2.27% | -5.34% | -10.49% | -10.04% | - | - |
| Ashoka WhiteOak India Opportunities | -2.44% | -3.68% | -6.83% | -13.88% | -10.94% | -12.57% |
| BlackRock GF World Healthscience USD | 0.17% | -2.82% | -8.10% | -3.75% | -5.97% | 8.99% |
| Emirates Global Sukuk | -0.32% | -0.12% | -1.02% | -0.09% | -0.65% | 4.09% |
| Emirates MENA Fixed Income | -0.44% | -0.12% | -1.63% | -1.53% | -1.96% | 5.82% |
| Emirates MENA Top Companies | -1.81% | -4.43% | -6.61% | 0.17% | 0.91% | 0.48% |
| Franklin Gold and Precious Metals USD | -7.47% | -9.62% | -7.60% | 31.55% | 7.43% | 115.19% |
| Harris Associates Global Equity | 0.44% | -1.04% | -2.95% | 6.93% | -0.70% | 9.00% |
| Loomis Sayles Global Growth Equity | -2.38% | -0.32% | 1.93% | -4.51% | -5.98% | 2.57% |
| Loomis Sayles Multisector Income | -1.09% | -1.31% | -2.15% | -0.06% | -1.03% | 4.54% |
| Loomis Sayles US Growth Equity | -0.67% | 1.91% | 5.38% | 2.91% | -1.36% | 11.30% |
| PineBridge Japan Small Cap Equity | 1.50% | 6.62% | 4.10% | 25.39% | 19.54% | 28.50% |
| UBAM 30 Global Leaders Equity | 0.52% | 3.86% | 6.20% | 4.44% | 2.50% | 10.16% |
| iShares US Corporate bond Index | -0.84% | -1.36% | 0.09% | -0.66% | 5.43% | 10.39% |
| iShares Developed World Index | -0.47% | 2.13% | 12.09% | 6.94% | 23.81% | 39.98% |
Nexus Blend Funds
| (18/05/26) | 1 Week (%) | 1 Month (%) | 6 Months (%) | Year-to-Date (%) | 1 Year (%) | 2 Years (%) |
|---|---|---|---|---|---|---|
| US Dollar High Risk Blend | -1.53% | 0.59% | 6.96% | 2.95% | 17.93% | 28.93% |
| US Dollar Medium-High Risk Blend | -1.19% | 0.64% | 5.75% | 2.49% | 17.51% | 28.71% |
| US Dollar Medium Risk Blend | -1.26% | 0.25% | 4.93% | 2.03% | 15.94% | 26.29% |
| US Dollar Medium-Low Risk Blend | -1.40% | -0.53% | 3.95% | 1.47% | 13.83% | 22.23% |
| US Dollar Low Risk Blend | -1.44% | -0.86% | 3.16% | 0.99% | 12.27% | 18.65% |
Zurich Mirror Funds
| (18/05/26) | 1 Week (%) | 1 Month (%) | 6 Months (%) | Year-to-Date(%) | 1 Year (%) | 2 Years (%) |
|---|---|---|---|---|---|---|
| Canaccord Genuity Balanced | -0.46% | 2.12% | 6.10% | 4.08% | 13.29% | 17.07% |
| Canaccord Genuity Growth | -0.46% | 2.90% | 7.13% | 4.60% | 15.96% | 20.12% |
| Canaccord Genuity Opportunity | 0.11% | 4.11% | 11.13% | 7.88% | 21.48% | 27.81% |
| Emirates Emerging Market Debt | -0.55% | 0.23% | 0.64% | 1.06% | 8.00% | 12.05% |
| Emirates Islamic Global Balanced | 0.66% | 3.47% | 5.46% | 4.34% | 16.34% | 21.64% |
* Data is lagged by 1 day.
** Data is lagged by 2 days.