For the first time this year, US equity markets achieved a five-day winning streak, led by the S&P 500’s steady climb. This rare rally came as a blend of improving corporate earnings and a temporary truce in tariff tensions lifted investor confidence. A surprisingly measured tone from President Trump, coupled with early signs of resilience from key sectors, helped restore risk appetite.
President Trump, who began the week with an incendiary demand for steep interest rate cuts and a jab at Federal Reserve Chair Jerome Powell, gradually eased off his confrontational stance. His shift was particularly evident in comments suggesting US tariffs on Chinese goods could be “substantially” reduced. Although he stopped short of promising full elimination, the statement signalled a more conciliatory approach in contrast to earlier hardline rhetoric. This move followed mounting pressure from US retailers facing supply chain disruptions and inflationary threats. Nonetheless, China’s Foreign Affairs Ministry refuted claims that talks were underway, leaving a degree of uncertainty lingering over the market.
North of the border, Canada delivered its own political shake-up as former Bank of England governor Mark Carney led the Liberal Party to a remarkable electoral victory. The result was widely viewed as a rebuke to Trump-era trade policies and concerns about excessive American influence. For investors, Carney’s return introduces a seasoned economic mind into the G7 political arena, a potential stabilising force in an increasingly volatile North American trade environment.
Meanwhile, earnings season is off to a dynamic start. Tesla’s quarterly report painted a mixed picture. While headline numbers disappointed—with revenue falling 9% year-on-year to $19.3 billion and profits down sharply—there were promising developments under the surface. Tesla’s energy storage division posted a 67% surge, and free cash flow swung back into positive territory. While vehicle deliveries slumped 13% and automotive revenue contracted 20%, CEO Elon Musk’s recommitment to Tesla and retreat from political entanglements provided a fresh tailwind for the stock. Investors are now turning their focus to the company’s lower-cost vehicle initiatives, upcoming Robotaxi debut, and AI-driven innovations.
Alphabet impressed with robust quarterly results, reporting $90 billion in revenue—a 12% annual increase—and a 46% rise in profits to $34 billion. Growth was evident across its business lines, including YouTube and Google Cloud. Despite macroeconomic headwinds and the looming competitive threat from AI-driven search alternatives, Alphabet’s pledge to invest $75 billion into AI initiatives buoyed sentiment. The capital expenditure hike reinforced investor confidence in Alphabet’s long-term AI strategy and served as a broader catalyst for tech-focused portfolios.
As equity markets gained momentum, a rotation out of safe-haven assets ensued. Gold prices spiked above $3,500 to hit an all-time high, before retreating below $3,300 as the temperature of global trade tensions cooled. The precious metal remains caught between persistent geopolitical uncertainty and bursts of optimism that encourage investors to pivot back into equities.
Bitcoin also staged a breakout, soaring past $95,000 in its strongest run since late 2024. The move was powered by robust inflows into US-listed Bitcoin ETFs and the unveiling of a $3.6 billion crypto investment fund led by Cantor Fitzgerald and SoftBank. Bitcoin’s role as a hedge against inflation and financial instability continued to strengthen, positioning the digital asset as an increasingly mainstream store of value.
Looking ahead, investor attention will stay glued to earnings as the remaining tech giants—Apple, Microsoft, Meta, and Amazon—prepare to report. Their results will offer crucial insight into how corporate America is navigating ongoing trade frictions and evolving global demand. On the macroeconomic front, key data from the eurozone and the US—including GDP figures and the Federal Reserve’s preferred inflation gauge—will offer further clarity on whether central banks can stay patient or must intervene more aggressively.
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