Weekly Market Review - 05-05-2026

May 5
4 min read

Global markets continued to show resilience over the past week, with equities moving higher and investor sentiment improving despite ongoing geopolitical tensions and persistent inflation pressures. Strength in US markets, particularly within technology, helped drive gains, while commodities remained elevated amid supply concerns. At the same time, central banks maintained a cautious stance, reinforcing expectations that interest rates may stay higher for longer as policymakers remain focused on bringing inflation under control. Overall, the environment reflects a more constructive but still uncertain backdrop for investors.

Market Recap.

Equity markets moved higher over the past week, with gains across major indices reflecting a more positive tone among investors.

UK equities edged up, with the FTSE 100 ETF rising 0.39%, indicating modest strength despite ongoing economic uncertainty.

US markets also delivered gains. The Dow Jones Industrial Average rose by 0.78%, while the S&P 500 ETF posted a stronger increase of 0.95%, pointing to broader market resilience. Technology stocks continued to lead performance, with the Nasdaq 100 ETF rising 1.42%.

Overall, the week reflects a more constructive market backdrop, with growth stocks once again outperforming.

News.

UK pubs are continuing to close at a rapid pace, with industry data indicating that around two venues are shutting each day.

The closures are being driven by rising financial pressures, including higher taxes, increased business rates, and growing wage and energy costs. Industry groups have highlighted that recent tax changes are adding further strain to already tight margins.

Many operators, particularly smaller and independent pubs, are finding it increasingly difficult to absorb these costs, leading to a steady decline in the number of venues across the country.

Inflation.

UK inflation remains above target, with the headline rate currently around 3.30%, highlighting that price pressures are still present across the economy.

Food price inflation in the UK continues to rise, currently sitting at 3.40%, with lower-income households facing a higher rate of around 4.10% compared to 3.20% for higher-income groups.

The study also found that essential food items have seen some of the most significant price increases, with pasta rising by 50% and beef by 64%, placing additional strain on household budgets. Lower-income families, who typically spend a larger proportion of their income on food, are therefore experiencing a greater impact from rising prices.

Central Banks.

Central banks continue to signal a cautious and data-dependent approach, with policymakers remaining focused on ensuring inflation is brought sustainably back to target.

European Central Bank policymaker Peter Kazimir indicated that further tightening may still be required, stating that a June rate hike is “all but inevitable” if current economic conditions persist. He emphasised that inflation pressures remain a concern and warned that policymakers “cannot declare victory yet” in the fight against rising prices.

Kazimir also highlighted the importance of maintaining a restrictive policy stance for long enough to ensure inflation is fully under control, reinforcing the view that interest rates may need to stay higher for longer. His comments suggest that, despite some easing in headline inflation, underlying pressures continue to warrant caution.

Commodities.

Commodity markets remain sensitive to geopolitical developments, with volatility continuing as investors monitor ongoing global tensions.

Precious metals are holding at elevated levels, reflecting a cautious market backdrop. Gold is trading around $2,300 per ounce, while silver is near $27 per ounce, supported by continued safe-haven demand.

In energy markets, oil prices remain firm. WTI crude is trading around $85 per barrel, with Brent crude close to $89 per barrel, as geopolitical risks and supply concerns continue to underpin prices.

ESG.

The European Commission has announced plans to simplify its deforestation regulation (EUDR), aiming to significantly reduce the administrative burden on companies while maintaining its environmental objectives.

Under the proposed changes, compliance costs for businesses are expected to fall by around 75%, primarily through streamlining reporting requirements and reducing duplication in due diligence processes. The adjustments are designed to make the framework easier to implement without weakening its core goal of preventing products linked to deforestation from entering the EU market.

Geopolitics.

Geopolitical tensions have intensified around the Strait of Hormuz, with Iran warning the United States that “we are just getting started” following reported attacks in the key waterway.

The US has launched “Project Freedom”, a military-backed operation aimed at helping stranded cargo ships leave the Strait. However, Iran continues to insist that it controls the route and has claimed the strait remains closed.

Shipping disruption remains significant, with around 2,000 ships estimated to be stuck in the Strait of Hormuz. Maersk confirmed that one of its vessels was able to exit the Gulf “accompanied by US military assets”, although shipping groups have warned that this is unlikely to resolve the wider blockage.

A former UK national security adviser described the ceasefire between the US and Iran as “hanging by a thread”, while a shipping trade body said the current escort plan is “not going to dramatically change anything” without a clearer coordination mechanism.

Week Ahead.

United States

In the United States, key data releases begin on Tuesday 6 May with the US trade balance, providing insight into external demand and economic activity. On Wednesday 7 May, markets will monitor consumer credit data for signs of borrowing trends. Thursday 8 May brings Initial Jobless Claims, offering a timely read on labour market conditions. The week concludes on Friday 9 May with the University of Michigan Consumer Sentiment Index (preliminary), providing an update on consumer confidence and inflation expectations.

United Kingdom In the UK, the main focus will be on the Bank of England’s Monetary Policy Committee decision on Thursday 7 May, where policymakers are expected to provide updated guidance on interest rates and the inflation outlook. Markets will also watch closely for any accompanying commentary from officials.

Eurozone

Across the Eurozone, attention will centre on economic activity and sentiment. On Tuesday 6 May, retail sales data will provide insight into consumer demand across the bloc. This is followed by industrial production data later in the week, offering a view on manufacturing conditions. Investors will also continue to monitor commentary from European Central Bank officials throughout the week for signals on the policy outlook.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.