INSIGHT WEEKLY: April 26, 2026
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🌐 Markets Overview
🌐 Markets Overview: Markets assume solution to Hormuz crisis
New records for most US markets in the week (highlighted in blue). The Dow slipped marginally, as leadership stays concentrated in tech and AI. Treasury yields edged higher across the curve.
The Strait of Hormuz is still largely closed and U.S.-Iran negotiations showing no meaningful progress.
Markets remain ambivalent though the energy price implications continue to be of concern. Oil is up 64% YTD.
Right now, tech outweighs concerns about the Middle East.
With nearly a fifth of S&P 500 companies having reported, the blended year-over-year earnings growth rate is running at 15.1% - on pace for a sixth consecutive quarter of double-digit growth, with 84% of reporting companies beating estimates.
European indices were the clearest casualties, with traditionally defensive sectors the only areas of relative shelter. The region faces a compounding problem - energy cost pass-through feeding directly into producer prices and consumer confidence at a point when the German economy was already fragile. German Ifo business confidence hit its lowest level since May 2020, and French consumer confidence recorded its steepest single-month drop since the start of the Ukraine war.
The Nikkei was carried by technology and AI-related names, though the yen's continued slide toward 160 against the dollar reintroduced intervention risk. The Nifty 50 was the week's standout among major indices, as the market proved more resilient despite energy exposure.
🤖AI Stocks
The week's defining story in the AI stack was a fundamental repricing of the CPU layer, triggered by Intel's quarterly results and the broader implications for the compute hierarchy as agentic AI scales.
Intel's data centre CPU segment posted 8.5% quarter-on-quarter growth - an annualised rate approaching 40% - with management noting actual growth would have been higher but for supply constraints. The message was direct - agentic AI systems require substantially more CPU compute than the inference or training workloads that preceded them. That shift widens the addressable market for CPU designers beyond what GPU-centric narratives had assumed, and the market's reaction across Intel, AMD, and ARM confirmed investors are treating this as a structural reassessment rather than a one-quarter beat.
ARM has been repositioning away from its smartphone royalty model toward direct data centre CPU competition, having unveiled its first in-house AGI CPU targeting $15 billion in revenue by 2031 as part of a $25 billion total plan. Intel's results provided external validation for that thesis, and a wave of analyst upgrades followed, with targets moving well above prior consensus.
The broader semiconductor complex gained as investors repriced the CPU opportunity. Within infrastructure, Dell and Constellation Energy continued attracting capital tied to AI's physical footprint, with Vertiv and Eaton maintaining the theme that power and energy infrastructure linked to AI compute remains a durable allocation target.
Among hyperscalers, Meta was the notable outlier - declining against the week's broader AI tailwind, suggesting stock-specific concerns rather than sector rotation. China tech held up, with DeepSeek's V4 preview launch on Huawei chip architecture providing a domestic narrative independent of US market direction.
Enterprise AI remained under pressure, with Palantir and Snowflake continuing the pattern of software-layer names struggling while hardware and infrastructure attract the dominant share of new capital. Network infrastructure was quietly positive, with Arista and Broadcom both advancing on the view that connectivity capacity enabling AI traffic remains a durable theme.
Macro Watch: This Week’s Economic Developments
🇺🇸 United States - The US economy sent mixed signals. Retail sales posted their strongest monthly gain since early 2023, with a surge in gas station receipts accounting for much of the headline figure - a distinction that matters, as it reflects price rather than volume. Strip out gas and underlying demand remained healthy, with the GDP control group measure also solid. February and January readings were revised higher, suggesting Q1 may have been stronger than initially measured.
Consumer sentiment deteriorated, with one-year inflation expectations jumping sharply. The PMI Composite improved to a three-month high, but the detail was less encouraging - services activity remained subdued while output prices rose at their fastest pace since mid-2022. Bond markets priced a stickier inflation path, with yields rising across the curve.
🇪🇺 Eurozone - Europe's data painted a picture of an economy absorbing a fresh external shock with limited room to manoeuvre. German Ifo business confidence hit its lowest reading since May 2020, with manufacturing, trade, and construction all registering sharp sentiment declines. French consumer confidence recorded its steepest monthly drop since the Ukraine war began. The common thread is energy cost pass-through - a dynamic that complicates the ECB's path even as growth signals weaken.
🇬🇧 United Kingdom - A characteristically mixed set of readings. The unemployment rate fell unexpectedly to 4.9% from 5.2%, though the improvement was partly driven by labour market withdrawal rather than genuine job creation - economic inactivity rose as more people, including students, exited the workforce entirely. Retail sales beat expectations, with fuel purchases a significant driver. Consumer confidence fell to its lowest level since October 2023 - the largest monthly decline in a year - with households increasingly anxious about rising prices, particularly at the fuel pump.
🇯🇵 Japan - Core CPI accelerated to 1.8% in March, up from 1.6% in February, driven by energy costs partially offset by government fuel subsidies. The Bank of Japan's April 27-28 meeting is widely expected to produce a hold at 0.75%, as the conflict's impact on growth and inflation complicates the gradual tightening path - with the BoJ expected to revise inflation forecasts upward while cutting growth projections. The yen's continued weakness toward 160 against the dollar has drawn public acknowledgement from Finance Minister Katayama, who confirmed close coordination with US counterparts - language that historically precedes intervention.
🇨🇳 China - Mainland equities consolidated after the prior week's strong Q1 GDP print of 5% year over year. The PBOC held lending rates unchanged for the eleventh consecutive month - the one-year loan prime rate at 3.0% and the five-year at 3.5% - signalling confidence in the current growth trajectory and no urgency for further stimulus. President Xi called for an immediate ceasefire and the reopening of the Strait of Hormuz underlining China's acute dependence on Gulf energy flows and its preference for a diplomatic resolution.
🌐 Artificial Intelligence and Tech
Google deepens its bet on Anthropic - Google confirmed a commitment to invest up to $40 billion in Anthropic, with $10 billion committed immediately at a $350 billion valuation, and a further $30 billion contingent on performance targets. The announcement arrived days after Anthropic secured a separate $5 billion from Amazon and struck a data centre capacity deal with CoreWeave - a flurry of supply-side moves that followed widespread complaints about Claude use limits. Anthropic's latest model, Mythos, has reportedly already reached unauthorised users despite restricted access, illustrating the challenge of managing both capability and distribution at this stage of the arms race.
OpenAI releases GPT-5.5 and signals a super app - OpenAI released GPT-5.5, described internally as a faster and more token-efficient thinker than its predecessor. Co-founder Greg Brockman framed the release as a step toward an AI super app - a unified platform combining ChatGPT, Codex, and an AI browser into a single service for enterprise customers. The cadence of releases is notable: GPT-5.5 follows GPT-5.4, launched only last month. OpenAI appears to be compressing its release cycle deliberately, treating model iteration as a competitive signal in itself.
SpaceX takes an option on Cursor - SpaceX announced a partnership with Cursor to develop a next-generation coding and knowledge work AI, with an option to acquire the startup for $60 billion later this year. The deal deepens a web of relationships between Elon Musk's companies and Cursor - xAI has been renting compute to Cursor, and two of Cursor's senior engineering leaders recently left to join xAI. Cursor had been eyeing a $50 billion private fundraising valuation, having climbed from $2.5 billion in early 2025.
Nvidia and Google cut inference costs - At Google Cloud Next, Nvidia and Google outlined a joint hardware roadmap targeting a tenfold reduction in inference cost per token and tenfold improvement in token throughput per megawatt, relative to the prior generation. The architecture pairs Nvidia's Vera Rubin GPUs with Google's Virgo networking technology, scaling to configurations of up to 960,000 GPUs across multi-site deployments.
Physical AI reaches new milestones - Two developments this week illustrated how quickly physical AI is closing the gap with human performance. Sony AI's robot "Ace" defeated professional table tennis players in matches conducted under official International Table Tennis Federation rules, using reinforcement learning to track spin and respond in milliseconds - a domain that has resisted robotic mastery for decades. Separately, at the Beijing E-Town Humanoid Robot Half Marathon, Honor's robot "Lightning" completed the 21-kilometre course in 50 minutes and 26 seconds - faster than elite human half-marathon times - finishing ahead of more than 100 competing robots. A year ago, the winning robot took over two and a half hours.
Crypto highlights
Crypto markets were under broad pressure this week, with the asset class behaving firmly as a risk proxy rather than any kind of safe haven amid geopolitical stress. Bitcoin held up best among the top seven, while the rest of the group declined - Polkadot leading losses and Ethereum continuing its persistent underperformance relative to Bitcoin, a gap that has not closed despite several protocol developments this year.
The week offered no major regulatory catalysts or protocol events capable of reversing the broader tone.
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