Weekly Market Review - 11-05-2026

May 11
6 min read

Markets delivered another constructive week overall, with technology stocks continuing to lead gains as investor sentiment improved across US equities. Political developments in the UK, inflation concerns across Europe, and ongoing geopolitical tensions surrounding Iran and the Strait of Hormuz remained key drivers for markets, while central banks continued to signal a cautious approach toward interest rates amid persistent inflationary pressures.

Market Recap.

Equity markets delivered a mixed but generally positive performance this week, with technology stocks leading gains and investor sentiment improving across US markets.

UK equities moved lower, with the FTSE 100 ETF falling 1.20%, reflecting continued pressure across large-cap stocks and a more cautious tone in domestic markets.

In the United States, the Dow Jones Industrial Average ETF edged slightly lower by 0.21%, suggesting a relatively muted week for more traditional sectors of the market. However, broader US equities performed strongly, with the S&P 500 ETF rising 1.86%, supported by renewed investor confidence and strength across several sectors.

Technology stocks once again outperformed, with the Nasdaq 100 ETF posting a strong gain of 4.83%, significantly outperforming broader indices as growth-oriented names continued to attract investor demand.

News.

Political developments dominated headlines this week following local elections across England, Scotland and Wales, with the results attracting significant attention from markets and policymakers alike.

The elections were widely viewed as an important test for the major political parties ahead of the next general election. Early results suggested shifting voter sentiment in several key regions, with both Labour and the Conservatives facing closely watched contests, while smaller parties also made gains in certain areas.

Prime Minister Keir Starmer stated that the results showed voters were seeking “stability and economic competence,” while opposition figures argued the outcome reflected continued public concern over the cost of living, taxation and public services.

Inflation.

Inflation concerns remain firmly in focus across the Eurozone, with European Central Bank policymakers signalling that further interest rate action may still be possible if the inflation outlook fails to improve.

ECB policymaker Robert Holzmann stated that another rate increase could be considered “if the inflation outlook does not improve,” reflecting continued concern that price pressures may remain more persistent than previously expected.

Inflation across the Eurozone is currently sitting around 2.60%, still above the ECB’s 2.00% target, while policymakers remain particularly focused on the impact of elevated energy prices and geopolitical tensions on the broader inflation outlook.

Holzmann also warned that “upside risks to inflation remain,” highlighting that ongoing disruption to energy markets and global supply chains could continue to place pressure on consumer prices in the months ahead.

Central Banks.

European Central Bank President Christine Lagarde has warned that the growing use of US dollar-backed stablecoins could increase the risk of “digital dollarisation” across Europe, raising fresh concerns about financial stability and monetary sovereignty within the Eurozone.

Speaking this week, Lagarde highlighted the rapid expansion of stablecoins such as Tether and Circle, which are pegged to the US dollar and widely used across digital asset markets. She warned that increased adoption of these products within Europe could weaken the role of the euro in digital payments and cross-border transactions.

Lagarde stated that “the dominance of dollar-denominated stablecoins could undermine Europe’s monetary sovereignty,” adding that policymakers must ensure the euro remains competitive as digital finance continues to evolve.

Her comments come as the ECB continues developing the proposed digital euro project, which aims to provide a central bank-backed digital payment alternative within the Eurozone. Policymakers argue that a digital euro could help reduce reliance on foreign-controlled payment systems and strengthen financial stability across the region.

Commodities.

Commodity markets remained volatile this week, with movements across precious metals and energy markets reflecting a combination of geopolitical uncertainty and shifting investor sentiment.

Precious metals saw further gains over the week, continuing to benefit from safe-haven demand. Gold rose to around $2,360 per ounce, up from approximately $2,300 last week, while silver increased to near $28 per ounce from around $27 previously, highlighting continued investor caution amid ongoing global uncertainty.

In energy markets, oil prices also moved higher. WTI crude rose to around $87 per barrel, compared with approximately $85 last week, while Brent crude increased to near $91 per barrel from around $89 previously. The gains reflect continued concerns surrounding geopolitical tensions and potential disruption to global energy supply routes, particularly around the Strait of Hormuz.

ESG.

The European Parliament is considering tougher ESG fund labelling rules as part of proposed reforms to the Sustainable Finance Disclosure Regulation (SFDR), in a move aimed at reducing greenwashing and improving transparency for investors.

Under the draft proposals, investment funds would face stricter requirements before being allowed to market themselves as “sustainable” or ESG-focused products. The reforms are expected to introduce clearer classification standards and more detailed disclosure obligations around environmental and social investment objectives.

Policymakers argue the changes are necessary to improve trust in sustainable investing and ensure investors can more easily distinguish between genuinely sustainable products and those making weaker ESG claims. The proposals also aim to create a more consistent framework across the European investment industry, with regulators increasingly focused on strengthening oversight as demand for ESG products continues to grow.

Geopolitics.

The conflict involving the United States, Israel and Iran remains the dominant geopolitical focus, with diplomatic efforts to end the war continuing alongside ongoing military and economic pressure across the region.

This week, President Donald Trump described Iran’s response to a US proposal aimed at ending the conflict as “totally unacceptable”, signalling that negotiations remain highly strained despite a fragile ceasefire largely holding in recent weeks.

According to Iranian state-linked media, Tehran’s proposal included demands for an immediate end to the war on all fronts, the removal of the US naval blockade on Iranian ports, compensation for war damage and guarantees against further attacks. Iran also reiterated its position regarding sovereignty over the Strait of Hormuz, one of the world’s most strategically important shipping routes.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu stated that Iran’s nuclear infrastructure “has to be dismantled” before the conflict can truly be considered over, reinforcing the tougher stance being taken by Israel and the United States during negotiations.

The Strait of Hormuz remains partially disrupted, with Iran continuing restrictions around the route despite ceasefire discussions. Approximately 20% of global oil and liquefied natural gas supply normally passes through the strait, leaving energy markets highly sensitive to any escalation or disruption.

Week Ahead.

United States

In the United States, attention this week will focus heavily on inflation and consumer activity. The key release comes on Tuesday 12 May with the US Consumer Price Index (CPI), which will provide an important update on inflation trends and could influence expectations around future Federal Reserve policy. On Thursday 14 May, markets will monitor Retail Sales data for insight into consumer spending and the strength of economic activity. Producer Price Index (PPI) data is also due on Wednesday 13 May, offering further insight into inflation pressures at the wholesale level. The week concludes on Friday 15 May with the University of Michigan Consumer Sentiment Index (preliminary), providing further insight into consumer confidence and inflation expectations.

United Kingdom In the UK, markets will focus on labour market and growth data. Employment figures, including wage growth and unemployment data, are expected midweek and will be closely watched for signs of persistent inflationary pressure within the labour market. On Thursday 14 May, preliminary UK GDP data is released alongside industrial and manufacturing production figures, offering a broader snapshot of economic momentum at the start of Q2. Investors will also continue to monitor commentary from Bank of England officials following last week’s Monetary Policy Committee decision.

Eurozone

Across the Eurozone, attention will centre on economic sentiment and growth developments. On Tuesday 12 May, the ZEW Economic Sentiment Survey will provide a forward-looking gauge of investor confidence across the region. Revised Eurozone GDP figures are expected later in the week, offering updated insight into economic conditions across the bloc. Markets will also continue to monitor commentary from European Central Bank policymakers for further signals on inflation, interest rates and the outlook for monetary policy.

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.