Despite escalating tensions in the Middle East, financial markets demonstrated remarkable resilience last week, with US equities closing positively even as the US-Iran ceasefire collapsed and hostilities continued throughout the week. Attention now turns to the start of earnings season, with strong corporate results expected to be a key market driver. Over the weekend, Iran again declared the Strait of Hormuz closed and the US launched a large-scale counterattack, raising the risk of significant price gaps and elevated volatility at the open — particularly in oil and currencies.
Market Review
Despite escalating tensions in the Middle East, financial markets demonstrated remarkable resilience last week. US equities closed positively even as the US-Iran ceasefire collapsed and both sides engaged in missile and drone exchanges throughout the week, with market sentiment remaining broadly unmoved.
Market attention is now shifting to the start of a new earnings season. Investors are looking to strong corporate results — particularly from the technology sector — to provide fresh upside momentum for equities. Over the coming weeks, earnings performance is expected to become a key driver of market sentiment, alongside several important economic data releases and the ongoing evolution of geopolitical developments.
The latest weekend developments suggest markets could face significant volatility at the open. Iran once again declared the Strait of Hormuz closed, with the United States responding with a large-scale counterattack, reportedly launching hundreds of strikes against Iranian targets. Iran simultaneously resumed attacks on US-allied Gulf states, casting a shadow over energy supply and regional stability. Traders are bracing for sharp moves when markets reopen, with oil and currency markets particularly exposed to gap risk and elevated volatility.
Week Ahead
Key Themes This Week
🔹 US CPI Inflation Data – USD
🔹 Bank of Canada Interest Rate Decision – CAD
🔹 UK GDP Data – GBP
Key Events This Week
| Date | Event | Market Focus |
|---|---|---|
| Monday | Fed’s Waller & Bowman Speak | USD |
| Tuesday | BoE Governor Bailey – Treasury Committee Hearing | GBP |
| Tuesday | US CPI Inflation Data | USD |
| Tuesday | Fed Chair Warsh – Congressional Testimony | USD |
| Wednesday | US PPI Producer Price Index | USD |
| Wednesday | Bank of Canada Interest Rate Decision | CAD |
| Wednesday | Fed Chair Warsh – Congressional Testimony (Day 2) | USD |
| Thursday | UK GDP Data | GBP |
| Thursday | US Retail Sales & Weekly Jobless Claims | USD |
| Thursday | Philadelphia Fed Manufacturing Index | USD |
| Friday | University of Michigan Consumer Sentiment & Inflation Expectations | USD |
Be ready for volatility. Trade the week ahead with focus.