Zylostar Market Wrap – May 29, 2026

Global markets ended the week on a stronger footing as easing geopolitical tensions between the US and Iran supported investor sentiment, pushing global equities toward fresh record highs while oil prices retreated sharply. Optimism surrounding a proposed 60-day ceasefire extension and renewed nuclear talks between Washington and Tehran helped calm energy markets, with Brent crude falling toward $92 per barrel despite ongoing concerns over Middle East supply risks.

Technology stocks remained the key driver of market momentum, with strong gains across global equity indices following upbeat corporate outlooks and continued enthusiasm around artificial intelligence. The MSCI All Country World Index climbed to another all-time high, while US futures pointed higher as investors extended risk exposure.

Central bank commentary remained cautious but balanced. Fed officials acknowledged that rising oil prices could temporarily pressure inflation and consumer spending, though policymakers continued to stress that the US economy remains relatively resilient to energy shocks compared with previous decades. Fed’s Schmid noted monetary policy is “not very restrictive” at present, while Kashkari said it is still too early to conclude that further rate hikes will be needed. Meanwhile, BoE Governor Bailey defended the decision to hold rates steady, citing economic softness and uncertainty linked to the Iran conflict.

In Asia, sentiment improved further as China’s housing market outlook showed signs of stabilization, with forecasts for home price declines revised less negatively for 2026. Tokyo inflation also cooled more than expected, supporting expectations that the Bank of Japan may remain cautious with policy normalization.

Geopolitical risks nevertheless remained elevated. Russia and Ukraine continued heavy drone attacks overnight, including incidents near Romanian airspace that renewed concerns about regional security escalation. However, markets largely focused on the temporary easing of tensions in the Middle East and the prospect of lower energy-driven inflation pressures heading into the second half of the year.

By Amir Amidian
Senior Market Analyst | Zylostar