Last week was marked by heightened volatility in U.S. markets, driven by AI-related valuation concerns, higher than expected inflation data, and escalating Middle Eastern geopolitical risks. Equities markets had a negative performance, while fixed income and precious metals traded strong as safe-haven assets. The S&P 500 declined 0.42% for the week and posted its worst monthly performance since March 2025, falling 0.87%.
AI sector headwinds and broader software weakness continued to weigh on risk sentiment, with markets remaining unimpressed with Nvidia's robust earnings and forward guidance. The technology selloff, with Nasdaq down almost 1%, reflected growing concerns over artificial intelligence valuations and their sustainability in the current environment. The 10-year Treasury yield traded below the 4% level with strong flight-to-quality flows amid heightened uncertainty.
Geopolitical tensions intensified over the weekend following developments in Iran, driving crude oil and gold prices significantly higher. Markets attention will focus close to the region, with oil prices almost 10% higher on Monday’s opening, marking the biggest movement in 4 years.
