EMEA Morning Briefing : Wall Street Posts Best Month Since 2020
META
Published on 05/01/2026 at 12:14 am EDT
MARKET WRAPS
Watch For:
U.K. Nationwide house price index, money and credit, S&P Global Mfg PMI; trading updates for Pearson, NatWest Group
Opening Call:
European stock futures were mixed. U.S. Treasurys were flat. The dollar strengthened. Gold and oil rose.
Equities:
European futures were mixed after stocks on Wall Street moved higher despite a divided Federal Reserve, the war in the Middle East, powered by a ganlet of tech earnings to wrap up their best month in six years.
Over the past four weeks, investors demonstrated an optimism about corporate earnings growth that has taken the bears by surprise.
Worries about dramatic declines in crude supplies and natural gas flowing through the Strait of Hormuz--a situation that remains unresolved--were quickly overshadowed by early indications that prices north of $4 for a gallon of gas haven't done much to dent consumer spending.
Meanwhile, money has continued to pour into the building of new data centers to power AI, helping to fuel a roaring rally in semiconductor stocks.
All of this has helped stocks stage what--by at least one measure--has been one of the fastest rebounds into record territory ever.
"It has been wild, to say the least," HB Wealth chief market strategist Gina Martin Adams said. I find most fascinating is just how, behaviorally, it seems the market is trying to trade the war just like it traded trade policy in 2025."
Forex:
The U.S. dollar strengthened, as investors saw less of a need to pile into safe haven assets.
The Japanese yen rose on likely government intervention, though its downward momentum--driven by rising energy import costs and concerns over a deteriorating economy--shows no signs of changing, said Mizuho Securities economist Yusuke Matsuo.
From a fundamental standpoint, as long as tensions in the Middle East persist, the economic environment remains conducive to a weaker yen, he said. "Doubts remain as to whether any foreign exchange intervention can have a lasting effect," he added.
Bonds:
Treasury yields were flat, but still ended April with a rise, as the Strait of Hormuz ongoing closure boosts energy prices and inflation.
Markets saw yesterday's Fed decision as a hawkish hold, with robust U.S. indicators and corporate earnings keeping equity markets in good mood.
Oil prices have become the main driver of concerns about inflation, with investors expecting that rising energy prices will keep interest rates steady in the coming months.
"The markets always test the new Fed chair," said David Waddell, chief investment strategist at Waddell and Associates, adding, "we'll at least get one rate cut at year-end--at least as a token of appreciation."
Energy:
Oil rose, with prices remaining high on increasing concern about the geopolitical situation in the Middle East, said Daniel Takieddine of Sky Links Capital Group.
With negotiations reaching a standstill, the market weighed the possibility of a prolonged closure of the Strait of Hormuz, which could continue to physically constrain the global crude supply, he wrote.
The market is expected to remain highly sensitive to further developments in the region, and any new escalation could push oil prices higher, Takieddine added.
Metals:
Gold prices rose after cementing their worst two-month decline on record on Thursday. But prices for the precious metal could still nearly double in the next five years if emerging-market central banks ramp up their push to diversify their reserves away from the dollar, according to Deutsche Bank.
The precious metal could rise to $8,000 in that time if emerging-market countries all target a 40% gold share in their reserves, even if their foreign-exchange reserves overall fall to $5 trillion, said Jim Reid, global head of macro and thematic research at Deutsche Bank.
Gold is still up 7% year to date and 39.5% over the past 12 months. Emerging-market and developing economies were recently holding roughly the equivalent of $7.5 trillion to $8 trillion in reserves, according to the International Monetary Fund's latest annual report.
-
Copper was higher as prices were supported by signs of stronger demand in China, said ANZ research analysts in a commentary.
Manufacturing activity in China continued to grow, with the official manufacturing PMI in expansionary territory with a 50.3 reading for April, the analysts said, adding that investors are also closely watching the developments in the Middle East.
TODAY'S TOP HEADLINES
U.S. Leading Indicators Forecasts Further Slowdown
U.S. leading economic indicators fell in March, signaling slower growth ahead as higher oil prices and supply-chain tensions will likely place additional upward pressure on inflation and further reduce consumers' purchasing power, according to a basket of monthly economic indicators.
The Leading Economic Index, or LEI, published Thursday by research group The Conference Board, declined by 0.6% in March to 97.3. That reversed its 0.3% increase in February to 97.9.
Five Takeaways From the Journal's Analysis of the U.A.E.'s Exit From OPEC
The United Arab Emirates' decision to withdraw from OPEC marked a new alignment in the Middle East, where the tiny but fantastically wealthy Persian Gulf country becomes more tied to Israel and the U.S. than the Arab world.
For decades, the Gulf, led by Saudi Arabia, favored stability at all costs in the region, avoiding provocations with a hostile Iran and backing dictatorship over democracy. Now, the U.A.E. has taken on a more disruptive role, embracing Israel's military dominance and rethinking its role in traditional Arab-led institutions.
Europe's Economy Stutters as War Drives Up Inflation
Europe's economy nearly flatlined in the first quarter as the war in the Middle East derails a long-awaited economic revival.
Mark Zuckerberg Blames Slower Sales on War, Layoffs on AI Costs in Meeting
Meta Platforms Chief Executive Mark Zuckerberg offered fresh details on the company's aggressive AI plans and addressed the market's negative reaction to its first-quarter results in a companywide meeting Thursday, according to a recording reviewed by The Wall Street Journal.
Zuckerberg attributed the 8% drop in Meta's shares to investor concern over an upward revision in its expected capital expenditures and to its preview of slower growth in the second quarter.
Write to [email protected]
Expected Major Events for Friday
00:01/IRL: Apr Ireland Manufacturing PMI
04:30/NED: Mar Retail turnover
06:00/UK: Apr Nationwide House Price Index
06:30/SWI: Mar Retail Sales
08:30/UK: Mar Bank of England effective interest rates
08:30/UK: Mar Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit
08:30/UK: Mar Monetary & Financial Statistics
08:30/UK: Apr S&P Global UK Manufacturing PMI
All times in GMT. Powered by Onclusive and Dow Jones.
Write to us at [email protected]
We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
05-01-26 0013ET