Strong U.S. corporate earnings have emerged as a bright spot while trading in global stocks and bonds also track a choppy oil market. Crude prices retreated around midweek as U.S.-Iran peace talks reportedly progressed, following the launch of a U.S. operation to protect commercial ships navigating the Strait of Hormuz. New York Fed President John Williams had warned in a Monday speech that supply-chain issues tied to the Iran war “will have wide-ranging consequences.” However, Williams said his base case is for inflation to settle around 3% in 2026 and drop to the Fed’s target of 2% next year. Central banks in Europe, where the oil shock’s impact is particularly pronounced, could be more hawkish. Joachim Nagel, governor of Germany’s central bank Bundesbank, said on Monday the European Central Bank might deliver a rate hike if its economic forecasts don’t “show a marked improvement” in the inflation outlook.

Uneven employment figures in the U.S. add to a complex outlook. With the April jobs report due on Friday, economists’ median estimate suggests there were 55,000 jobs gained, down from 178,000 in March. At the end of March, the number of jobs available at U.S. employers rose slightly to 6.95 million while total hires hit their highest level since February 2024, the Labor Department said on Tuesday. Investors are also parsing quarterly earnings, which have generally painted a rosy picture of corporate America’s balance sheets. Members of the S&P 500 are on track to register a 27.1% year-over-year increase in profits, according to a FactSet analysis of reported and estimated earnings as of May 1. That would mark the strongest rate of earnings growth since the fourth quarter of 2021. Silicon Valley has stood out amid the AI infrastructure boom. So far, 97% of information technology companies have beat analysts’ earnings estimates—better than any other sector.

Jennison’s Zac Gill, a global equity research analyst specializing in technology, fintech, and internet companies, shares his perspective on the AI-driven investment cycle, providing important context on volatility and where Jennison sees the most compelling opportunities emerging.