What happens across this Global Week Ahead?

The war in Iran is about to enter its 12th week and, with no end in sight, concern is growing about the impact on the real economy.

Not that this worry is evident in booming equity markets, where all things AI are king right now.

Next are Reuters’ five world market themes, re-ordered for equity traders—
 

(1) Nvidia and U.S. big-box retailers report Q1 earnings, and issue 2026 outlooks

A robust first-quarter earnings season for U.S. companies is ending with a bang, with reports due this week from semiconductor giant Nvidia (NVDA Quick QuoteNVDA - Free Report) , and a host of retailers highlighted by Walmart (WMT Quick QuoteWMT - Free Report) .

With its chips used for artificial intelligence applications, Nvidia, the world's largest company by market value, is a bellwether for the theme that has driven the bull market.

Its results on Wednesday come as AI fervor has propelled a wider swath of semiconductor shares.

Investors will look to Walmart and other retailers reporting, including Home Depot HD, Target TGT, and TJX Cos TJX, for signs that war-related inflation may be pinching consumer spending.

S&P500 earnings are on pace to have climbed more than +28% in the first quarter, from the year-earlier period, according to LSEG IBES.
 

(2) A YTD share returns gap widens, between the S&P500 and Europe’s Stoxx600

Nvidia steals the earnings spotlight in the coming week, but whatever the results, investors will be watching to see if the reaction widens or helps close a growing performance gap between U.S. and European equities.

The disruption to global energy supplies has hit Europe harder, given the region's heavier reliance on imports compared to the U.S. On top of that, a slate of robust big tech results and an increasingly weak European consumer are adding to the divergence in performance.

The S&P500 (SPX) is up +8.8% this year versus +3.3% for the STOXX600 (STOXX).

The comparison is even starker since the onset of the Iran war in late February: the S&P500 rose +8.3% over March and April, while the STOXX lost -3.0%.
 

(3) G7 Finance Ministers and Central Bankers meet in Paris, France

U.S. President Donald Trump has just wrapped up ‌a summit in Beijing with Chinese counterpart Xi Jinping, which one analyst said markets would see as "strategically reassuring, while underwhelming in substance.”

Early next week, the finance ministers and central bankers of the G7 will gather in Paris.
 
Everything from the stalemate in Iran, to securing supply chains for critical minerals, to the oil-price shock and the recent volatility in the global bond market will be on the table.

With no sign of any kind of resolution to the Iran conflict in sight, the oil price is comfortably above $100 a barrel.

Even though there is an assumption among traders and investors that a peace deal will be in the offing at some point, the risk of damage to the economy increases with each day.

Bond markets from the U.K. to Japan and the U.S. have been roiled by a range of factors, including rising measures of inflation, political turmoil and mostly by a drastic shift in investor expectations for where interest rates are headed.
 

(4) U.K. Prime Minister Starmer is feeling heat — from poor local election results.

British labor market and inflation data could be unwelcome for politicians and policymakers, but what happens in Downing Street will also be closely watched by the bond market.

Markets are increasingly worried about a leadership challenge to Prime Minister Keir Starmer following disastrous local elections this month.

The energy impact of the Iran war has wreaked havoc on global bonds ‌and domestic political uncertainty is not helping.

Health minister Wes Streeting resigned on Thursday, a move that could set up a leadership contest.

The fear of a more left-leaning PM has stoked concerns about Britain's fragile finances, and pushed up gilt yields. U.K. 10-year government bond yields are near 18-year highs.

If Wednesday's inflation figures show another jump and markets price in even tighter BoE policy this year, the selloff in gilts could have more room to run.
 

(5) On Tuesday, Japan reports Q1 real GDP growth figures

Japan's first-quarter growth data due on Tuesday could offer an early read on how the surge in energy prices has weighed on an economy heavily reliant on oil imports.

Authorities around the region will be closely watching as they balance rising inflation pressures against downside risks to growth.

GDP will be followed by Japanese trade and inflation figures later in the week, with the latter potentially reinforcing the case for a near-term rate hike by the Bank of Japan.

Elsewhere in Asia, data on Chinese house prices and retail sales are scheduled for Monday.

The world's second-largest economy continues to be plagued by an ailing property market and anemic domestic consumption, even as broader growth momentum shows signs of resilience.
 

Zacks #1 Rank (STRONG BUY) Stocks

Next, three Zacks #1 (STRONG BUY) large-cap stocks, benefitting from fresh analyst earnings upgrades.

(1) DHL Group (DHLGY Quick QuoteDHLGY - Free Report) : This is a cheap $28 a share stock, with a market cap of $62.5B

It is found in Zacks Transportation Services industry. The stock holds a Zacks Value score of B, a Zacks Growth score of A, and a Zacks Momentum score of F.

F12M P/E: 13.8.

DHL Group is a logistic company.

Its operating segment includes Express; Global Forwarding, Freight; Supply Chain; eCommerce Solutions and Post & Parcel.

DHL Group, formerly known as Deutsche Post AG, is based in Bonn, Germany.

(2) Keysight Technologies (KEYS Quick QuoteKEYS - Free Report) : This is a rich $361 a share tech stock, with a market cap of $61.9B

It is found in the Zacks Electronics – Measuring Instruments industry. The stock holds a Zacks Value score of F, a Zacks Growth score of D, and a Zacks Momentum score of C.

F12M P/E: 40.3.
 

Image Source: Zacks Investment Research

Keysight Technologies is a provider of electronic design and test instrumentation systems.

Keysight's suite of connected car test solutions include Virtual Drive Test Toolset, which facilitates automakers to build virtual test routes in the lab by integrating network and channel emulation capabilities, and combining data captured in the field.

Moreover, the company is evolving its expertise in software test automation capabilities.

Meanwhile, KeysightCare aids customers with end-to-end scalable support model solution loaded with robust test and measurement know-how to reduce time-to-market and enhance efficiency in a cost-effective manner.

(3) Teradyne (TER Quick QuoteTER - Free Report) : This is a rich $356 a share electronics stock, with a market cap of $56.8B

It is found in the Zacks Electronics-Miscellaneous industry. The stock holds a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of A.

F12M P/E: 51.3.
 

Image Source: Zacks Investment Research

Teradyne is a leading provider of automated test equipment.

The company is primarily focused on the semiconductor test market, which generates the bulk of its revenues.

It also provides specialized system testing equipment for specific end markets.

The semiconductor test product line primarily consists of:

• The FLEX platform (including the IG-XL software operating system enabling single or simultaneous testing of semiconductor devices)
• The J750 testing system based on the IG-XL software (for very high-volume testing, as required for microprocessors)
• The Magnum test platform (enabling testing of memory devices produced in very large quantities) and
• The ETS platform (focused on analog/mixed signal discrete devices that usually have a lower pin count for testing through the proprietary SmartPin technology)

Additionally, the company also offers a broad range of services across the world that helps in the deployment and functioning of its testing systems.
 

Key Global Macro

On Monday, Japan’s Q1 real GDP growth rate gets reported. +1.3% y/y was the prior reading.

Australia’s Reserve Bank meetings come out. Why this matters? This central bank is already hiking its policy rate.

On Tuesday, the Bank of Canada’s CPI data for April comes out. The prior March CPI reading was +2.5% y/y.

The U.K. broad & core CPI for April comes out. Their March broad CPI was +3.3% y/y, and core CPI was +3.1% y/y.

On Wednesday, the latest FOMC minutes come out. This was the last meeting with Chair Powell at the helm.

Australia’s household unemployment rate gets an April update. 4.3% was the March print.

On Thursday, Europe’s HCOB manufacturing PMI comes out for May. The prior April reading was 52.2.

U.S. Building Permits and Housing Starts for April come out. Prior March permits were 1.36M, and prior starts were 1.502M.

On Friday, the Fed’s influential Governor Chris Waller speaks.

University of Michigan consumer sentiment for May comes out. The prior reading was a very weak 48.2.
 

Conclusion

This week, Q1-26 S&P500 earnings reports remain a stock trader focus.

On May 8th, Zacks Research Director Sheraz Mian shared an EPS update.

Here it is:

1. Zacks Q1-26 Earnings Season Scorecard

Through Friday, May 8th, we have seen Q1 results from 446 S&P500 members, or 89.2% of the index’s total membership.

Total earnings for these 446 index members are up +21.2% from the same period last year, on +10.3% higher revenues.

79.6% beat EPS estimates and 78% beat revenue estimates.

2. Zacks expects Q2-26 shows +21.7% EPS growth, on +10.2% higher revenues

• Estimates moved higher for 7 of 16 Zacks sectors, as Q1 reports got underway
• These sectors are: Tech, Energy, Basic Materials, Utilities, Industrials, Retail, and Business Services

The positive revisions trend for the Energy and Basic Materials sectors is primarily a function of the conflict in the Persian Gulf and its effect on the supply of oil, LNG and other commodities.

The upgrade to Retail sector earnings estimates is primarily driven by momentum in Amazon’s (AMZN Quick QuoteAMZN - Free Report) business, which we group in the Zacks Retail sector.  We suspect that elevated oil prices will prove to be a significant headwind for the sector’s profitability.

The negative impact on the retail sector’s earnings outlook will mostly be through diminished consumer demand.

But the freight/logistics component will also be stressed by high oil prices.

• On the negative side, Q2-26 estimates declined for 9 of 16 Zacks sectors
• Zacks sectors suffering the most declines include Transportation, Autos, Consumer Discretionary, Construction, Finance, and Consumer Staples

Enjoy the week.

John Blank, PhD.
Zacks Chief Equity Strategist and Economist