Global equities edged higher on Friday, demonstrating resilience despite escalating tensions between the United States and Iran that have pushed oil prices to their highest levels in more than six months.
The pan-European STOXX Europe 600 advanced 0.5%, marking its fourth straight weekly gain. In the U.S., futures tied to the S&P 500 climbed 0.4%, signaling a constructive Wall Street open.
📊 Equity Investors Focus on Fundamentals
Despite a volatile backdrop shaped by geopolitical flashpoints and political uncertainty, equity markets continue to anchor their outlook to economic fundamentals.
According to LSEG I/B/E/S data:
Next week’s key catalyst will be earnings from Nvidia, widely seen as a bellwether for AI-driven market momentum.
Market participants will also scrutinize:
These releases could shape expectations around the policy path of the Federal Reserve.
Dollar Posts Strongest Weekly Gain in Four Months
The U.S. dollar is headed for its largest weekly gain in four months, supported by firmer U.S. economic data and Fed minutes signaling patience on rate cuts.
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The dollar rose about 1% against the euro, with EUR/USD near $1.1767.
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It climbed 1.8% on the week versus the yen, trading around 155.4.
The yen weakened after Japan’s core inflation slowed to 2% in January — its slowest pace in two years — complicating the tightening trajectory of the Bank of Japan.
U.S. Treasury yields were steady:
In Europe, Germany’s 10-year Bund yield eased 2 basis points on the week.
Market Sentiment: Cautious but Not Panicked
While oil’s surge reflects rising geopolitical risk, equity markets appear more measured. Investors seem reluctant to aggressively reduce exposure, focusing instead on earnings resilience, valuations, and rate expectations.
However, positioning may remain light ahead of the weekend, with traders wary of headline risk from the Middle East.
Analysis By- Shahzad Ahmad
Frequently Asked Questions
Why are equities rising despite geopolitical tensions?
Equity markets are currently prioritizing earnings strength, stable valuations, and steady interest rate expectations over geopolitical noise. Unless tensions materially disrupt global supply chains or energy markets, investors tend to focus on macro fundamentals.
How does rising oil impact broader markets?
Higher oil prices can:
Increase inflation expectations
Support energy stocks
Pressure consumer and transport sectors
Strengthen the U.S. dollar in risk-off phases
If Brent sustains above key resistance levels, volatility across FX and bond markets may increase.
What is the key technical level to watch in the S&P 500?
The 5,000 psychological zone remains major support. A sustained move above 5,200 would likely confirm bullish continuation, while a break below 5,000 could trigger corrective momentum.
Why is the U.S. dollar strengthening?
The dollar is gaining due to:
Stronger-than-expected U.S. economic data
Federal Reserve caution on rate cuts
Safe-haven demand amid geopolitical risks
As long as U.S. yields remain elevated, downside in the dollar may be limited.
What are the biggest risks next week?
Major earnings (especially large-cap tech)
U.S. Core PCE inflation data
Escalation in Middle East tensions
Sudden shifts in bond yields
Unexpected data or geopolitical headlines could quickly alter short-term technical setups.
