🌟 AI Stocks Rally, Oil Keeps Markets on Edge
It was a week of two stories. On one side, strong company earnings and artificial intelligence stocks pushed US tech shares higher. On the other, oil above $100 a barrel, Middle East uncertainty and a warning from the Bank of England kept investors nervous.
📈 Weekly Scoreboard
| Index | Weekly Change (%) | Current Level |
| S&P 500 | +1.2% | 7,165.08 |
| Nasdaq Composite | +1.1% | 24,698.28 |
| FTSE 100 | -2.7% | 10,379.08 |
| EURO STOXX 50 | -1.78% | 5,883.48 |
| Nikkei 225 | +1.52% | 59,716.18 |
| MSCI Emerging Markets | +0.94% | 1,612.20 |
| China (SSE Composite) | -0.32% | 4,079.90 |
🌍 Global Drivers & Macro
- AI optimism was back in charge. Intel’s strong results and upbeat revenue forecast reignited confidence in chipmakers, helping the Nasdaq outperform wider markets.
- Oil remained the market’s pressure point. Brent stayed above $100, keeping inflation worries alive and making investors more sensitive to Middle East headlines.
- Earnings were better than feared. Reuters reported that around 81% of S&P 500 companies reporting so far had beaten Q1 estimates, helping investors look through geopolitical risks.
- Europe lagged. European shares suffered a sharp weekly fall as higher energy prices and slower growth worries weighed more heavily than in the US.
- IMF cuts UK growth forecast: The IMF trimmed its 2026 UK growth forecast to just 0.8% (from 1.3%) — the biggest downgrade among G7 nations. This underscores the UK’s vulnerability to elevated energy costs and global trade disruption.
🇬🇧 UK Corner
- FTSE 100 has its worst week in a month: The index fell 2.70% to close at 10,379 — its largest one-week decline since March — snapping a four-week winning streak and hitting its lowest level since early April. Energy-heavy and internationally exposed UK companies bore the brunt of global jitters.
- UK inflation moved the wrong way. CPI rose to 3.3% in March, up from 3.0%, with petrol prices showing the early impact of the Iran war. That makes the Bank of England’s rate-cut path less straightforward.
- Retail sales looked stronger — but for the wrong reason. Sales rose 0.7% in March, mainly because drivers rushed to buy fuel after prices jumped. That is not the same as a broad consumer boom.
🏦 Key Asset Movers
- GBP/USD — pound holds steady: Sterling closed Friday at approximately $1.3469, roughly flat on the week. The pound has been a relative outperformer in 2026, supported by the UK’s comparatively high interest rates, though the weak growth outlook caps any significant upside.
- Brent Crude — near $104/barrel: Oil remained elevated, having risen over 58% in the past year as Middle East supply routes stay disrupted. For UK investors, persistently high oil prices feed directly into petrol costs and energy bills — and make the Bank of England’s job of cutting rates much harder.
- Gold at record highs — $4,721/oz: Gold rose to $4,721 per troy ounce this week — up over 42% year-on-year — reflecting investors’ desire for safety amid geopolitical risk. When gold surges like this, it typically signals that some investors are hedging against uncertainty rather than fully embracing the equity rally.
📰 Key Headlines
- Tesla beats profit forecasts (Reuters / Guardian, 22 Apr): Tesla posted Q1 EPS of $0.41 vs $0.37 expected, with gross margins jumping to 21.1% — its strongest in years — though revenue of $22.39bn narrowly missed the $22.6bn forecast.
- FTSE 100 logs worst week since March (Morningstar, 24 Apr): The blue-chip index fell 2.70% — its steepest weekly drop in over a month — as geopolitical uncertainty and elevated oil prices weighed on sentiment.
- Bank of England urged to hold rates (DIY Investor, 22 Apr): Following a fresh inflation uptick, economists are warning the BoE against cutting rates at its April meeting, with calls to wait for clearer data.
- London Stock Exchange records best-ever quarter (Alliance News / Morningstar, 23 Apr): LSEG reported total income growth of 9.8% on an organic basis in Q1 2026, raising its full-year guidance — a rare bright spot for UK financial stocks.
- S&P 500 hits record high mid-week (CNBC, 22 Apr): The S&P 500 briefly broke above 7,147 on Wednesday as Trump extended the Iran ceasefire, before paring gains to close the week around 7,108.
- UK inflation rebounds, squeezing household budgets (DIY Investor, 22 Apr): A rise in energy and food prices pushed UK CPI higher this month, complicating the outlook for mortgage holders hoping for imminent rate relief.
- IMF delivers biggest G7 growth downgrade to the UK (T. Rowe Price / SIB, 20 Apr): The UK’s 2026 growth forecast was slashed to 0.8%, the sharpest cut among G7 economies, reflecting the toll of high energy costs and global uncertainty.
📑 Companies Reporting This Week
| Company | Result summary | Market reaction |
|---|---|---|
| Intel | Strong AI-related CPU demand and an upbeat Q2 revenue forecast lifted confidence in semiconductors. | Shares surged, helping drive the Nasdaq higher. |
| Procter & Gamble | Results beat expectations, but management warned of a potential $1bn fiscal 2027 profit hit from higher oil prices. | Shares rose as investors focused on resilience, but cost pressure remains a warning sign. |
| Boeing | The company posted a smaller-than-expected loss, helped by defence strength and recovery progress. | The update supported confidence that operational repair is gaining traction. |
| SAP | Profit beat expectations and cloud revenue rose strongly. | Shares gained as Europe’s biggest software group showed AI/cloud resilience. |
| Nestlé | Sales beat forecasts and guidance was maintained, but China weakness and higher freight/energy risks remain. | Defensive consumer shares held up better than more cyclical names. |
| Tesla | Results were mixed, with revenue pressure still visible despite earnings resilience. | Shares were under pressure as investors focused on the core auto business. |
Note: Alphabet, Microsoft, Meta, and Apple all report next week (29–30 April).
⚖️ Investor Sentiment Dashboard
The mood has shifted back towards risk-on, but not without caution. The VIX sat around 18.7, which is elevated enough to show uncertainty but not panic; the AAII bull-bear spread jumped to around +11.6, showing retail investors have become more optimistic; and CNN’s Fear & Greed Index was in the Greed zone at around 66.
Fund flows confirm the same message. Global equity funds attracted $48.72bn in the week to 22 April, the biggest inflow since November 2024, while US equity funds took in $27.98bn. Investors are moving money back into equities, especially areas linked to AI, technology and earnings growth.
📅 Next Week’s Radar
- Wednesday 29 April, evening UK time: Big Tech earnings focus, with Microsoft, Alphabet, Meta and Amazon expected after the US close. AI spending will be the big question.
- Wednesday 29 April, 19:00 UK time:Federal Reserve decision. Markets expect no change, but the tone on inflation and oil prices will matter.
- Thursday 30 April:US GDP and PCE inflation are due. PCE matters because it is the Fed’s preferred inflation measure.
- Thursday 30 April:ECB, Bank of England and Bank of Japan policy updates are expected, making it a big week for currencies and bond yields.
⚡ The Final Take
After weeks of record-breaking gains, this was a perfectly natural week for markets to catch their breath — the FTSE’s worst weekly drop in over a month was driven by global headwinds rather than any fundamental UK deterioration. With the Bank of England decision and a deluge of US earnings all landing next week, the stage is set for the next significant market move in either direction.
© Clearly Investments Ltd. Educational information only. This is not investment advice.
