Global markets extended their risk-on momentum, with equities hitting fresh record highs as easing geopolitical tensions and resilient earnings continued to dominate sentiment. The MSCI All Country World Index rose for a 10th consecutive session, its longest winning streak since September, driven by renewed inflows into global equities and a broad reduction in risk premiums. Global stocks advanced across regions, led by Asia, as investors continued to price in a potential extension of the US–Iran ceasefire. The prospect of reduced Middle East tensions supported broader risk appetite, pressuring the US dollar and easing concerns over energy-driven inflation. Futures signal further upside in European equities, following record closes on Wall Street.
PepsiCo delivered a solid beat across key metrics with organic revenue rising 2.6% versus 2.4% expected and operating profit coming in at $3.21B versus $2.93B expected. Strength was seen across North America and Asia Pacific while full-year guidance was maintained at 2% to 4% organic growth and EPS growth of 4% to 6%, reinforcing defensive consumer resilience despite a mixed macro backdrop. TSMC also exceeded expectations with net income of NT$572.5B versus NT$542.4B expected and gross margins of 66.2% above forecasts, alongside capex of $11.1B, continuing to underline structural demand from AI-driven semiconductor cycles.
Geopolitics remained a key driver as reports suggested the US and Iran are considering extending their ceasefire for another two weeks to allow more time for technical negotiations. However, major disagreements remain unresolved, particularly around uranium enrichment and nuclear restrictions. Elsewhere, tensions persisted with Israeli strikes impacting infrastructure in southern Lebanon and Russia intensifying attacks on Ukrainian energy and industrial facilities, although markets continue to lean toward de-escalation narratives.
In macro data, Eurozone CPI came in slightly above expectations at 2.6% year-on-year versus 2.5% forecast, with monthly inflation also firmer, keeping ECB policy expectations cautious. The UK posted a stronger-than-expected GDP print with growth of 1.0% year-on-year and 0.5% month-on-month, although weak manufacturing output highlights uneven momentum. China delivered a mixed set of data with GDP beating at 5.0% and industrial production also stronger, while retail sales and unemployment disappointed, pointing to fragile domestic demand despite supply-side strength.
On the policy front, the EU is reportedly preparing its most significant relaxation of corporate merger rules in decades, which could support increased M&A activity ahead. Meanwhile, UK officials warned that instability in the Strait of Hormuz could pose risks to global energy security and trade flows.
Overall, markets remain firmly supported by earnings strength and easing geopolitical risk premiums, but inflation stickiness in Europe, uneven Chinese demand, and ongoing geopolitical uncertainty keep sentiment highly sensitive to headline risk.
By Amir Amidian
Senior Market Analyst | Zylostar
Frequently Asked Questions
1. Why are global equities hitting record highs?
Markets are rallying on improving risk sentiment, driven by expectations of a US–Iran ceasefire extension and strong corporate earnings. The easing of geopolitical risk is reducing oil-driven inflation concerns and supporting broader risk appetite.
2. What is driving the latest move in Asia and global stocks?
Asian equities surged as investors priced in de-escalation in the Middle East and strong global earnings momentum. The MSCI global index also extended its winning streak, reflecting sustained inflows into risk assets.
3. How did PepsiCo perform this quarter?
PepsiCo beat expectations on revenue and profit, with organic growth of 2.6% and stronger-than-expected operating profit. The company maintained full-year guidance, signaling stable demand in consumer staples despite macro uncertainty.
4. What stands out in TSMC’s earnings?
TSMC reported better-than-expected net income and strong gross margins of 66.2%, reinforcing ongoing strength in semiconductor demand, particularly driven by AI-related chip production.
5. What are the key macro risks right now?
Key risks include unresolved US–Iran nuclear negotiations, ongoing military escalation in Ukraine and the Middle East, sticky inflation in Europe, and uneven economic recovery in China. These factors could quickly shift market sentiment if headlines worsen.
