Yesterday was, in short, the blue-sky scenario. You may remember I mentioned that the sessions leading up to Nvidia's results often encourage investors to take on more risk. That is precisely what happened yesterday, with two extra catalysts. First, oil prices fell fairly sharply. Second, the minutes of the Fed's latest meeting reassured those who were looking for reassurance. I will add a third point, even though it merely confirmed the trend, because it matters for today's reopening: Nvidia did what it had to do after the close. And a fourth, because "fourthly" is not used nearly often enough, which is a pity: the testosterone contest between Elon Crazy Musk and Sam Creepy Altman over the SpaceX and OpenAI IPOs.

Let us take them in order. When we left things yesterday morning, markets were looking rather bruised by a build-up of bad news: deadlock over Iran, expensive oil, strains in the bond market and uncertainty ahead of Nvidia's results. I would not go so far as to say all of that had been swept aside a few hours later, but the stars did at least move back into a more favourable alignment for risk assets. In Europe, the Stoxx Europe 600 rose 1.5%, while the Euro Stoxx 50 gained more than 2%. In the US, the S&P 500 ended three straight losing sessions with a 1.1% rebound.

The previous session had opened roughly flat in Europe, but indices soon took off on rumours of progress towards a peace deal between the US and Iran. That move was reinforced by a fall in crude prices after two supertankers bound for China passed through the Strait of Hormuz. Brent fell from $111 to around $106 a barrel. This easing of geopolitical and oil-market stress helped calm a bond market that had been very, very twitchy about the inflationary impact of surging energy prices on interest rates, and about the supposed reluctance of the Fed's new chairman, Kevin Warsh, to tighten monetary policy in response. Put another way, bond investors fear a major monetary-policy mistake because of Warsh's alleged deference to the White House and his fixation with low rates. Here too, however, good news arrived before the Wall Street close. The minutes of the Fed's latest meeting showed that policymakers are more hawkish on inflation than expected. The institution is not as relaxed as bond markets had feared. Combined with the fall in oil, that pushed US Treasury yields lower and dragged down yields on most other major sovereign bonds.

For the trading day to be a complete success, Nvidia's results needed to come through without any nasty surprise. Mission accomplished. As usual, the surprise was spectacularly on the upside. Investors have grown a little jaded, so the shares were slightly lower in after-hours trading. Even so, the numbers were so large that the rest of the ecosystem benefited. That has been the paradox of recent months: Nvidia is very far from being the AI company with the most extravagant valuation multiples, yet its results do a lot of heavy lifting for everyone else. At least they do "now", because it is worth recalling that Nvidia shares have risen 20,063% in ten years, as the company went from being the champion of PCs for introverted teenage gamers to the king of bitcoin mining and then the emperor of AI chips.

To understand why Nvidia's 1.2% after-hours fall is being taken so positively, just look at the Asian proxy for the AI trade, South Korea's KOSPI: up 8% this morning, with SK Hynix, the memory-chip star most closely tied to the AI narrative, up a tidy 11%. Which brings me to that fourth point I was so keen to mention. In 2026, as you know, equity markets react less to numbers than to good stories. On that score, the ego skirmish between Elon Musk and Sam Altman over who can pull off the biggest IPO in the universe is a splendid plotline. In terms of timing, the advantage goes to Musk's SpaceX, which has just filed its registration documents, clearing the way for a 12 June listing. The valuation is not known, but it will almost certainly top $1tn. Altman's OpenAI is expected to file preliminary papers fairly soon, although its Wall Street debut is not due until the end of the year. Perhaps that will be enough time for it to command a higher valuation than SpaceX. Who knows? Either way, this tech rivalry is helping to sustain a pro-risk mood, adding to the improvement seen the previous day.

Elsewhere, May's PMI activity surveys will offer a read on corporate momentum across the major economies. Walmart's quarterly results, due around midday, should also provide some useful signals.

In Asia-Pacific, Nvidia has put another coin in the rally machine. Japan's Nikkei 225 is up 3.3%. South Korea's KOSPI, as mentioned, is up 8.3%. Australia has gained 1.5% and India remains flat. Hong Kong is lagging, down 0.5%. European futures are hesitant, but the pull from technology is clearly still there.

Today's economic highlights:

See the full calendar here.

  • GBP / USD: US$1.34
  • Gold: US$4,526.82
  • Crude Oil (BRENT): US$106.09
  • United States 10 years: 4.6%
  • BITCOIN: US$77,790

In corporate news:

  • British West End theatre operator ATG Entertainment is in the early stages of being readied for a potential sale by its private equity owner, Reuters reports.
  • Intesa Sanpaolo is reportedly preparing a bid for Spain’s Singular Bank, according to the FT.
  • Equinor and Aker BP are joining forces to boost future production in certain parts of their portfolios on the Norwegian continental shelf.
  • The CEO of Volkswagen denies that discussions are taking place with Chinese manufacturers regarding the use of the group’s excess production capacity.
  • The CEO of Commerzbank expects annual savings of €350 million thanks to AI.
  • Fresenius Medical Care has reappointed Martin Fischer as Chief Financial Officer.
  • Nvidia reassures investors, despite its share price losing some ground after the close.
  • Exxon Mobil has signed a gas cooperation agreement with Egypt.
  • US REITs AvalonBay and Equity Residential are close to a merger, according to several sources.
  • PepsiCo is set to raise the price of small packets of crisps in response to rising costs in the US, according to Bloomberg.
  • Intuit is set to cut its workforce by 17% to embrace AI.
  • Starbucks’ single-use plastic cups in its US cafés are not as recyclable as the company claims, according to an NGO.
  • West Pharma says it is fully operational following a cyberattack and is maintaining its forecasts for 2026.
  • OpenAI is laying the groundwork for a fundraising round targeting a valuation of over $1 trillion, according to the FT, whilst the WSJ reports that the filing of the IPO prospectus is imminent.
  • SpaceX unveiled its IPO prospectus on Wednesday.
  • Today’s key earnings releases: Walmart, Deere, Ross Stores, Take-Two, Generali, BT Group, Swiss Life, Lundberg, Asmodée…

See more news from UK listed companies here

Analyst Recommendations:

  • Experian Plc: Bernstein maintains its underperform recommendation and reduces the target price from GBX 2850 to GBX 2350.
  • Mondi Plc: Barclays maintains its underweight recommendation and reduces the target price from GBP 7.55 to GBP 6.80.
  • Ig Group Holdings Plc: UBS maintains its buy recommendation and raises the target price from GBX 1680 to GBX 2200.
  • Shell Plc: Jefferies maintains its buy recommendation and raises the target price from GBP 44 to GBP 45.
  • Rio Tinto Plc: UBS maintains its neutral recommendation and raises the target price from GBX 6900 to GBX 7600.
  • Antofagasta Plc: UBS maintains its neutral recommendation and raises the target price from GBX 3750 to GBX 4000.
  • Glencore Plc: UBS maintains its neutral recommendation and raises the target price from GBX 550 to GBX 600.
  • Anglo American Plc: UBS maintains its buy recommendation and raises the target price from ZAR 95,000 to ZAR 107,500.
  • Experian Plc: Deutsche Bank maintains its buy recommendation and reduces the target price from GBX 4550 to GBX 4000.
  • Marks & Spencer Group Plc: BNP Paribas maintains its outperform rating and raises the target price from GBX 436 to GBX 445.
  • Big Yellow Group Plc: Goldman Sachs maintains its sell recommendation and reduces the target price from GBX 860 to GBX 800.
  • Diploma Plc: Morgan Stanley maintains its overweight recommendation and raises the target price from GBX 7350 to GBX 8250.