May was defined by a pivotal de-escalation in trade tensions, most notably the 90-day tariff pause agreed between the US and China, and the landmark UK-US trade deal. Both developments triggered a surge in equity markets and restored investor confidence. However, underlying issues such as persistent inflation and slower growth have kept the US Federal Reserve in a “wait and see” mode, with rate cuts on hold while policymakers consider conflicting economic data.

While stagflation is not our base case, the risk has increased, with the FED openly acknowledging the complex challenge of balancing inflation and growth. Supply-side pressures resulting from ongoing uncertainty surrounding trade policy, coupled with stubborn inflation and modest GDP growth, have increased the pressure on monetary authorities and market participants.

Finally, we are witnessing a structural evolution in market leadership. While the “Magnificent 7” tech giants continue to dominate the headlines, a new generation of sector leaders spanning fuel, aerospace, agriculture, nuclear power and precious metals is emerging as a resilient force in an era defined by resource security and inflationary pressures.

We hope you enjoy reading and find these updates helpful for the month ahead.