Take Two: Stocks reach another fresh high; Eurozone economy grows moderately

What do you need to know?

Rallying technology stocks drove the S&P 500, Nasdaq and Japan’s Nikkei 225 indices to new highs last week. However, US annual inflation reached a three-year high of 3.8% in April, from 3.3% in March, as the Iran war pushed up oil prices. Core inflation – excluding food and energy prices – increased to 2.8% from 2.6%, dampening expectations of US interest rate cuts. Meanwhile the International Energy Agency warned that global oil inventories are depleting at a record pace, as the Middle East war continues to impact supply.

Around the world

The Eurozone economy expanded moderately in the first quarter of 2026 as higher energy costs and geopolitical uncertainty weighed on momentum. The bloc’s GDP grew by 0.1%, according to a flash estimate, slower than the 0.2% growth in the previous quarter. The UK economy also grew in Q1, at a faster than anticipated rate of 0.6%, compared to Q4’s 0.2% growth. Elsewhere, China’s annual consumer price inflation rose to 1.2% in April, up from 1% in March, while its producer price index advanced to 2.8% from 0.5% in March, the fastest pace since July 2022. 

Figure in focus: 50 billion tonnes

Some 50 billion tonnes of sand is used every year to meet growing infrastructure demand but is being extracted faster than nature can replenish it, according to a United Nations report. Sand is turned into concrete, asphalt, glass and more, and sand demand for buildings alone is expected to rise by 45% by 2060. However, left in its natural ecosystems, sand sustains biodiversity, filters water and buffers coastlines from erosion, amongst other important functions. Unsustainable extraction threatens ecosystems and livelihoods globally, the UN warned, though intervention remains possible. 

Chart of the week

The Q1 earnings season is wrapping up and results have far exceeded expectations, particularly in the US. For the S&P 500, earnings have risen 20% versus the same period a year ago. While technology companies’ earnings rose strongly, as expected, there was also solid growth across all sectors of the market. “Surprises”, that is, how much better the results were compared to forecasts, came to 10%; typically, the figure is 3%-4%. Results in Europe were still good but behind the US. Profits rose at half the rate and were very dependent on just two sectors: financials and energy. The results were nonetheless notably higher than expected. 

Words of wisdom

Most: Scientists have uncovered a potentially cheap and emissions-free way of supplying heat which could be made available anywhere on earth. Molecular solar thermal – known as ‘Most’ – technology uses molecules which can be engineered to change shape when exposed to sunlight, allowing them to store energy for long periods. The molecules then release the energy when they revert to their original shape. However, several challenges remain, including the methods used to retain and transfer energy as currently these molecules can only be stored in liquid form, meaning complex pumping systems are necessary for the process. 

What’s coming up?

On Tuesday, Japan issues a preliminary estimate of Q1 GDP growth, while the UK publishes unemployment data and Canada reports its latest inflation rate. On Wednesday, the UK and the Eurozone follow with April inflation data, and the US Federal Reserve releases the minutes of its latest monetary policy meeting. Thursday sees several flash Purchasing Managers’ Indices published including those covering Japan, the Eurozone, UK and US. On Friday, Japan updates markets with inflation data and Germany publishes a preliminary estimate of Q1 GDP growth.