Titan Wealth International Weekly Investment Update

Technology leadership remained central to the rally, while investors grew more selective around the scale and monetisation of AI-related capital spending.

Global Markets Extend Their Rally

Global equity markets extended their winning run to a sixth consecutive week, with the rally that began in late March continuing to broaden and deepen despite a heavy and at times contradictory news flow spanning geopolitics, central bank policy, and corporate earnings.

The Nasdaq led gains, rising over 4%, while the S&P 500 advanced 2.3% to close above 7,400. Technology and AI-related stocks drove the advance, with energy and utilities the only notable laggards as oil prices retreated further from their conflict-era highs.

Earnings and AI Capital Spending Drive Sentiment

Earnings season was once again the primary engine of positive sentiment. With approximately 85% of S&P 500 companies having reported, nearly 85% beat estimates — the strongest hit rate in several years — and the blended earnings growth rate reached 27.1%, the highest since Q4 2021 and the sixth consecutive quarter of double-digit expansion.

The theme of AI capital spending continued to dominate management commentary. Alphabet, Amazon, Meta, and Microsoft all beat estimates, though markets were discriminating:

Alphabet was rewarded for demonstrating clear revenue momentum from its AI and cloud investments, while Meta fell sharply after announcing a further uplift in full-year capital spending to between $125 and $145 billion without a commensurate near-term return signal.

Microsoft spent close to $32 billion on infrastructure in a single quarter, and Alphabet’s cloud backlog nearly doubled.

Combined, the top four US cloud providers are now projected to deploy over $660 billion on AI infrastructure in 2026 — a scale of investment that continues to reshape expectations around power demand, data centre buildout, and the broader technology supply chain.

Resilient Hard Data Contrasts With Weak Sentiment

On the macroeconomic front, the picture was genuinely mixed. April’s nonfarm payrolls came in well ahead of expectations at 115,000 — against a consensus of 62,000 — and continuing jobless claims fell to their lowest level since 2024.

Factory orders and construction spending also beat forecasts, with surging demand for electronic products reflecting the ongoing AI buildout.

However, the University of Michigan’s consumer sentiment index fell to 48.2 — a record low — with respondents citing higher petrol prices as a primary concern.

One-year inflation expectations jumped to 4.7%, the highest level in over a decade, highlighting the tension between resilient hard data and deteriorating soft data.

Europe Faces Tariff Risk and Renewed Inflation Pressure

In Europe, sentiment improved early in the week on easing geopolitical tensions, before being tempered by US President Trump’s threat to impose substantially higher tariffs on European goods unless the EU moved its own tariffs on US imports to zero.

The STOXX 600 ended broadly flat, with Germany’s DAX gaining modestly but the UK’s FTSE 100 declining 1.26%.

Eurozone producer price inflation posted its largest monthly rise since August 2022, driven almost entirely by energy, and the ECB signalled that a rate rise at its June meeting is now under active consideration.

Japan Surges as Policy Normalisation Remains in Focus

Japan’s Nikkei 225 surged 5.38% in a shortened trading week following the Golden Week holiday, reaching a record high driven by technology and semiconductor stocks.

The yen remained volatile amid suspected official intervention near the 160 level against the dollar, and real wages rose for a third consecutive month — the first such streak since 2021 — reinforcing the case for the Bank of Japan to continue its gradual policy normalisation.