Global Markets Steady Amid Geopolitical Uncertainty and Strong Earnings

Global stocks cling to record highs with a third weekly gain in sight, spurred by waning U.S. rate hike expectations. Oil prices surge amid Middle Eastern geopolitical tensions. Despite these, strong earnings, particularly in AI, pacify market worries, fostering optimism amid persistent geopolitical uncertainties.

On Friday, global stocks gravitated towards record highs, preparing for a third weekly surge following subdued inflation figures that reduced the likelihood of a U.S. rate hike next month. Meanwhile, ongoing conflicts in the Middle East pressured oil prices upwards.

Despite the stalemate in peace negotiations and the U.S.'s looming economic pressure on Iran, including a possible naval blockade, investor sentiment remains calm. Short-term bond yields have seen slight increases, and gold reached two-month peaks, showing resilience even as inflation expectations persistently decline.

Attention has pivoted towards the burgeoning AI sector, buoyed by robust earnings reports that allay fears of excessive AI spending. Geopolitical uncertainties linger, however, noted by the capital's minor losses in the European tech sector, countered by gains in defense and automotive stocks. As tensions simmer between the U.S. and Iran, market observers expect heightened geopolitical rhetoric heading into the weekend.