Global sharemarkets moved higher through May on resilient corporate earnings and the prospect of an end to the conflict in the Middle East.
A strong US first-quarter earnings season saw global sharemarkets remain more resilient than the economic headlines alone might suggest, led by technology companies.
Results from Alphabet, Meta, Amazon, Microsoft, and NVIDIA reinforced confidence that large-scale spending on artificial intelligence infrastructure is continuing to support both corporate earnings and broader market sentiment.
The earnings season does not remove the economic uncertainty, but it has confirmed that corporate profitability, particularly within large US technology firms, is providing significant support.
New Zealand’s sharemarket made gains, helped by positive earnings announcements from larger companies in the index.
For the moment, markets appear to be cautiously optimistic about the prospect for continuing de-escalation, with the focus turning to a stronger than expected corporate earnings in the US.
Economic activity has held up reasonably well so far, but markets are signalling rising price pressures.
If disruption in the Strait of Hormuz continues, then further volatility can be expected. It may be for an extended period of time as we head towards the US mid-term elections in November and the uncertainty changes to the US Congress may create.