Mahmut Çil
29 April 2026•Update: 29 April 2026
Investors are locked into the Fed’s monetary policy decision due to be made on Wednesday amid stalling negotiations in the Middle East and the impact of selloffs in tech stocks.
US President Donald Trump hasn’t been receptive to Iran’s offer to postpone the next phase of negotiations on its nuclear program in exchange for reopening the Strait of Hormuz, according to reports.
Expectations that regional tensions could subside any time soon have been replaced with projections that they could persist over a longer timeframe, while energy supply risks continue to rise amid the effective closure of the vital waterway.
Rising energy prices and inflationary pressures continue to be the focus of the US and European economies.
US tech firm OpenAI is reportedly struggling to meet its weekly user and revenue targets while its ability to sustain its expensive investments in data centers has come under scrutiny, leading to selling pressure in tech stocks.
As for the Fed, the bank is widely expected to maintain rates in the 3.5–3.75% range amid Middle East tensions, while investors will be on the lookout for Fed Chair Jerome Powell’s guidance.
The bank may not ease its policy this year as rising energy costs due to the Middle East war could potentially further intensify inflationary pressures, market expectations show.
Powell, having navigated the bank through major shocks in modern economic history since becoming Fed Chair in 2018, is expected to deliver what may be his final policy meeting statement.
With the earnings seasons intensifying in the US and affecting market direction, the financial statements of the Magnificent 7 firms, especially Amazon, Meta, Alphabet, and Microsoft, will be under close watch.
Investors are watching closely for signals on the artificial intelligence (AI) demand outlook and over new order flows.
The Dow Jones fell 0.05%, the S&P 500 0.49%, and the Nasdaq 0.9% on Tuesday, while American indexes started Wednesday mildly bullish.
The US 10-Year Treasury yield climbed 4 basis points to 4.36% and the US Dollar Index increased 0.1% and settled around 98.7.
At the same time, gold climbed 0.2% to $4,605 per ounce amid a search for equilibrium.
The United Arab Emirates (UAE) said it will withdraw from OPEC and OPEC+ as of May 1, leading Brent crude oil to rise to $105.5 per barrel on Tuesday, closing at $103.9, while trading at $104 per barrel on Wednesday.
In Europe, a mixed trend came to the fore, with all eyes turning to Germany’s April inflation data to be released.
Rising energy price forecasts could drive up production costs in the region and put upward pressure on activities across many sectors, especially aviation and industry.
Ryanair CEO Michael O’Leary said rising jet prices amid the Middle East conflict could push many European airlines to the brink of bankruptcy.
The DAX 40 fell 0.19%, the FTSE 0.56%, and the CAC 40 0.19%, while the FTSE MIB 30 traded flat.
As for Asia, a relatively resilient stock market came to the fore, buoyed by industrial and tech stocks.
High energy costs have been disruptive for some countries in the region, but in China and Hong Kong, there’s been an obvious absence of inflationary trends, which keeps risk perceptions in the region more limited, while Japan and South Korea have been especially affected by the Middle East tensions but the large number of export-heavy firms keep the balance afloat.
South Korea’s Kospi Index continued its record streak into the new day on Wednesday, led by petrochemical firms, rising 0.6%, while Hong Kong’s Hang Seng Index rose 1.3% and China’s Shanghai Composite Index rose 0.5%.
Trading is suspended in Japan due to a public holiday.
*Writing by Emir Yildirim
