Market Analysis Summary - May 28, 2026

Overview

Global equities have reached new record highs, driven by a significant surge in AI infrastructure investments. The ongoing skepticism surrounding a potential US-Iran peace deal has introduced volatility in various asset classes, particularly in oil prices and bond yields.

Key Takeaways

• Global equities are climbing, with projections of up to $1 trillion in AI capital expenditures by 2027.
• Conflicting reports regarding US-Iran peace negotiations are causing volatility in the energy sector.
• Sticky inflation and hawkish central bank rhetoric are leading to expectations of prolonged restrictive monetary policies.
• The Nikkei 225 index is at risk of a corrective pull-back below a key resistance level.

Market Highlights

Global Stock Performance

Major global indices, including the S&P 500 and Nasdaq, have achieved record highs, largely supported by the AI infrastructure supercycle. The Dow Jones and Russell 2000 also reached new highs, while the S&P 500 and Nasdaq remained relatively flat.

US-Iran Relations

Recent headlines regarding a potential peace deal in the Middle East have been met with skepticism. While Iranian media reported a memorandum to reopen the Strait of Hormuz, the White House dismissed it as a fabrication, contributing to market volatility.

Central Bank Policies

Central banks globally are adopting hawkish stances. The Reserve Bank of New Zealand held rates steady but indicated potential hikes, while the European Central Bank is expected to raise rates regardless of geopolitical developments.

Macro Themes

• AI Capex Supercycle: Analysts predict significant investments in AI infrastructure, with a comparison to the late-1990s dotcom bubble, though current earnings growth is more robust.
• Fed Rate Trajectory: Expectations for inflation data are high, with a potential interest rate hike by the Fed now seen as likely by year-end.
• Corporate Debt Preference: Investors are shifting from U.S. Treasuries to corporate debt due to concerns over public finances and inflation.

Regional Market Impact

Asia Pacific

South Korea's KOSPI index surged, driven by strong performances from major tech firms. In contrast, India's markets are struggling as foreign investors withdraw capital.

Upcoming Events

• US PCE Core Inflation report - Expected to impact all asset classes.
• US Weekly Initial Jobless Claims - Anticipated to influence USD and US stock indices.
• Ongoing news regarding the US-Iran peace deal - Expected to affect market sentiment across the board.

Chart of the Day

The Nikkei 225 is showing signs of a potential pull-back, with key resistance levels identified. A break below certain support levels could indicate further declines.