The week was dominated by a “tug of war” between strong US tech/AI momentum, sticky energy prices and ongoing Middle East tensions that kept volatility elevated around key macro events. US chip and broader AI linked names continued to power Wall Street higher, while Europe lagged under the weight of higher oil and gas costs and Asia traded mixed, split between AI enthusiasm and pressure on energy importing economies.
FX Market Reactions
The US dollar index hovered just below the 100 handle, with a late week quote around 98.46 as traders balanced resilient US data against rising expectations for eventual Fed easing.
EUR/USD recovered from early weakness to trade back near 1.1730, suggesting euro bears were reluctant to press shorts aggressively while risk sentiment in equities remained constructive.
Elsewhere, ranges remained relatively contained, with no clear breakout in the major pairs as markets waited for the next round of central bank guidance and inflation data into the turn of the month.
Commodities Market Reactions
Energy remained structurally tight. S&P Global noted that crude oil, refined products and natural gas prices stayed elevated versus earlier forecasts, with the ongoing Middle East war and disrupted traffic through the Strait of Hormuz keeping a sizeable risk premium in the complex.
Even though April’s earlier deescalation took some of the extreme edge off the move, analysts still expect oil and gas prices to remain high through the rest of 2026 as inventories are rebuilt and damaged infrastructure constrains supply.
That backdrop continued to filter into chemicals and petrochemicals, where price forecasts were revised higher in tandem with upstream energy.
Indices Market Reactions
Equity indices reflected this split narrative. Analysts latest take highlighted US equities as the clear leader, with chipmakers and broader AI plays driving gains and keeping major indices close to, or at, record territory.
In contrast, European markets underperformed as higher energy costs squeezed margins and weighed more heavily on cyclical sectors.
Asian indices were mixed, with tech heavy markets benefiting from the AI trade while more energy dependent markets struggled under the combination of elevated oil and lingering geopolitical risk.
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