Financial Market Preview - Friday 22-May

Why It Matters

Investors are balancing a short-term risk-on tilt driven by geopolitical hopes and AI leadership against lingering inflation, uneven economic indicators and earnings uncertainty—factors that will shape positioning into a long holiday weekend and the busy economic calendar ahead.

Summary

Global markets opened firmer on Friday, May 22, with US futures and Asian and European equities supported by renewed optimism about a potential US–Iran ceasefire that helped reverse earlier weakness and lift momentum- and AI-linked stocks. Bonds were mixed and the dollar was flat as yields stabilized; oil slipped modestly and gold marginally eased. Macro data were mixed: Japan’s CPI cooled, Germany’s Q1 GDP slightly beat expectations while UK retail sales disappointed, and regional divergences persisted with tech-heavy markets outperforming. Corporate headlines included Lam Research and Kawasaki Heavy partnering on AI-driven manufacturing and robotics, and reports that IMAX is exploring a sale.

Original Description

US equity futures are modestly higher, Asian markets are broadly higher, while European equities are also firmer. Equities were supported by renewed optimism around a potential US-Iran ceasefire. Momentum and AI-linked names resumed leadership following recent underperformance, while improved sentiment also contributed to a pullback in oil prices and some easing in rate hike expectations. However, investors remain cautious given persistent uncertainty around the durability of any geopolitical resolution, alongside mixed signals from earnings and continued concerns around inflation pressures reflected in elevated input and selling prices. Investors also cautious heading into a long weekend with reduced risk appetite.

Companies mentioned: Lam Research, Kawasaki Heavy Industries, Nvidia , Imax