Weekly Market Wrap – 29th May 2026

🌟 AI Keeps the Rally Running While Oil Loses Heat

It was another risk-on week for global markets. Investors were pulled in two directions: inflation is still uncomfortable, but hopes of progress on the US-Iran conflict helped oil prices fall and lifted confidence. At the same time, strong AI-linked company results reminded investors that earnings growth is still doing a lot of the heavy lifting.

📈 Weekly Scoreboard

🌍 Global Drivers & Macro

• US-Iran ceasefire hopes drove the biggest oil price drop since 2020. Reports emerged mid-week that Washington and Tehran had agreed in principle to extend their ceasefire by 60 days and potentially reopen the Strait of Hormuz to shipping. This sent Brent crude falling ~19% in May alone — a huge deal for inflation and central bank thinking globally.
• US inflation remains stubbornly hot, complicating the Fed’s path. The US Personal Consumption Expenditures (PCE) price index — the Federal Reserve’s preferred inflation measure — rose 3.8% year-on-year in April, the highest reading since May 2023. This was driven largely by surging energy prices from the Iran conflict, and it confirms the Fed is unlikely to cut rates any time soon.
• Tech earnings supercharged Wall Street. Dell Technologies surged over 32% after blowout results, while Salesforce added more than 8% following its report. The AI investment theme continues to drive outsized gains for companies demonstrating real revenue growth from their technology platforms.
• Japan hit a record high. The Nikkei 225 closed at an all-time high of 66,329 points — a remarkable milestone for Japanese equities, driven by global risk appetite and a weaker yen boosting export-heavy firms.

🇬🇧 UK Corner

• The FTSE 100 slipped slightly this week, despite ending May with a modest monthly gain. The index remains heavily influenced by banks, oil majors, miners and global currency moves.
• The FTSE 250 was the brighter UK story. Mid-cap shares gained on Friday and rose strongly across May, helped by improving risk appetite and hopes that lower oil prices could ease pressure on consumers.
• The Bank of England looks set to wait. Governor Andrew Bailey suggested the Bank is not in a rush to raise rates, even though inflation may sit above target for a while. For investors, that means gilts, cash rates and mortgage expectations remain sensitive to every inflation update.

🏦 Asset Movers

• 💵 GBP/USD weakened to around $1.34. The pound fell over 1% against the dollar during May, pressured by a mix of political headwinds — including Labour’s poor performance in local elections — and broader uncertainty around Iran-linked inflation. A weaker pound raises the cost of imports and overseas holidays, but helps FTSE 100 multinationals that earn in dollars.
• 🛢️ Brent crude fell sharply, closing near $91 per barrel. Oil is on course for its steepest monthly decline since 2020, down roughly 19% in May alone on ceasefire optimism. Lower oil prices are the single biggest potential driver of falling inflation globally — good news for consumers and central banks alike.
• Gold steadied near $4,535–$4,580 per ounce. Gold had a volatile week — initially falling as Iran peace hopes reduced the “safe haven” bid, then recovering as investors noted the deal is still not finalised. The metal remains elevated overall, reflecting persistent inflation and geopolitical uncertainty.

📰 Key Headlines

• Oil on track for biggest monthly drop since 2020 (The Guardian, 29 May) — Brent crude fell ~19% in May as US-Iran ceasefire reports reduced fears of a prolonged Strait of Hormuz closure, easing the global energy price shock.
• Dell Technologies surges 32% on AI-driven earnings beat (MarketScreener, 29 May) — Dell reported blowout results driven by surging AI server demand, becoming the week’s standout mover in global equities.
• Salesforce gains 8% after strong quarterly results (MarketScreener, 29 May) — The cloud software giant beat expectations, with AI-related product revenue accelerating, adding to the week’s tech rally.
• US PCE inflation hits 3.8% in April — highest since 2023 (Reuters/James Sharp, 29 May) — Surging energy costs from the Iran war pushed the Fed’s preferred inflation gauge sharply higher, cementing expectations that US rate cuts remain a long way off.
• Nikkei 225 closes at all-time record high of 66,329 (FT Markets, 29 May) — Japan’s benchmark index hit a historic milestone, powered by global risk appetite and currency tailwinds for Japanese exporters.
• UK consumer confidence edges up but spending intentions at 18-month low (GfK/Reuters, 22 May) — GfK’s index rose slightly to -23, but willingness to make major purchases dropped sharply — consumers are dipping into savings to cover everyday costs.
• S&P 500 records eighth consecutive weekly gain (Yahoo Finance, 29 May) — The longest winning streak since 2023 saw the S&P 500 gain 5% for the month of May, powered by tech earnings and easing geopolitical tensions.

📑 Companies Reporting

⚖️ Investor Sentiment Dashboard

The VIX fell to the mid-teens, suggesting calmer markets. The CNN Fear & Greed Index moved into “Greed” territory, while the AAII bull-bear spread stayed negative, meaning individual investors are still more cautious than the headline market rally suggests.

Overall conclusion: Risk-On, but not euphoric. Investors are buying growth and AI winners, but they are not all-in across the board.

Fund flows support that view. Global equity funds saw modest inflows, led by US and European equities, while technology funds attracted strong demand. Bond funds also continued to take in money, showing investors still want some ballast rather than pure risk.

📅 Next Week’s Radar

• Monday 1 June, 15:00 UK: US ISM Manufacturing PMI. A key check on whether higher energy costs are hurting business activity.
• Tuesday 2 June, 10:00 UK: Eurozone flash CPI. Important because markets are watching whether the ECB may need to raise rates.
• Wednesday 3 June, 15:00 UK / 19:00 UK: US ISM Services and Federal Reserve Beige Book. These will help show whether inflation is feeding into wages and services.
• Friday 5 June, 13:30 UK: US non-farm payrolls. This is the big one. A strong jobs number could push bond yields higher and test the equity rally.

⚡ The Final Take

May 2026 ended on a high note for global equity investors — the prospect of peace in the Middle East and blockbuster AI-driven tech earnings drove Wall Street to fresh records, and even the more cautious FTSE held its ground above 10,400. The key question heading into June is whether the Iran ceasefire becomes a lasting deal: if the Strait of Hormuz reopens fully, expect oil prices to fall further, inflation to ease, and central banks — including the Bank of England — to have more room to manoeuvre.

© Clearly Investments Ltd. Educational information only. This is not investment advice.