European stock index futures pulled back further on Thursday as investors reacted to the soaring crude oil prices and the bizarre military options CENTCOM will offer President Donald Trump. The FTSE 100 futures dropped to £10,190, while those linked to the DAX, Stoxx 50, and CAC 40 fell by nearly 1%.

Crude oil price soars on new military options on the Iran war

Futures tied to top indices like the German DAX, Stoxx 50, and CAC 40 retreated as crude oil prices rallied. Brent, the global benchmark, soared to $126, its highest level since Russia invaded Ukraine. The West Texas Intermediate (WTI) and other oil benchmarks also continued soaring.

According to Axios, CENTCOM will present Trump with a few military options that it hopes will push Iranians to the negotiating table. All these options sound bizarre as they don’t explain how Iran will react.

First, Brad Cooper plans to have a “short and powerful” wave of strikes targeting infrastructure targets in hopes of breaking the negotiating deadlock. 

The reality, however, is that Iran will also retaliate with similar strikes against Israel and Middle East neighbors. Its retaliations may include oil and gas infrastructure in order to push oil prices higher.

Second, CENTCOM is also planning to take over part of the Strait of Hormuz to allow commercial shipping, an option that would include ground forces. This option would leave US troops vulnerable to Iranian attacks.

Third, the US may decide to have special forces to secure Iran’s enriched uranium. This would also be a difficult option, as the uranium is buried deep under mountains and would expose troops.

The implication of all this is that crude oil prices will remain at an elevated level for a while. Such a move will hurt European economies that are contending with slow economic growth and a high inflation rate. Europe depends mostly on oil from the Middle East, with some airlines already canceling flights.

DAX, FTSE 100, Stoxx 50, and CAC 40 in focus ahead of interest rate decisions

European stock indices will react to the upcoming ECB and Bank of England (BoE) interest rate decisions. These meetings will come a day after the Federal Reserve left rates unchanged between 3.50% and 3.75%.

Economists expect the ECB to leave rates unchanged as it contends with the new reality of tempered economic growth and high inflation. This is a big change as the ECB had succeeded to bring inflation to its 2% before the war started.

The Bank of England is in a more difficult place as the UK inflation was still above 3% before the war started and the country remains in a stagflation period. Stagflation is characterized by high inflation and slow economic growth.

At the same time, several large European companies will publish their financial results in the next two days. In the UK, the focus will be on Rolls-Royce, NatWest, Standard Chartered, and Endeavor Mining.

The DAX Index will react to earnings reports by top companies like BASF, Deutsche Post, Volkswagen, and Linde. In France, companies like Schneider Electric, BNP Paribas, Société Générale, Credit Agricole, and Capgemini will release their numbers.

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China’s real residential property price index just hit a record low with 17 consecutive quarters of decline.

In real, inflation-adjusted terms, home values are now below where they were in 2010, wiping out fifteen years of appreciation for the country’s urban middle class.

Meanwhile, official GDP grew at 5% in Q1 2026, beating forecasts. So perhaps one headline is more significant than the other.

What the headline number is hiding

The 5% growth figure is not fabricated. But it is being manufactured in a very specific way.

State-owned enterprises are leading a surge in infrastructure and advanced manufacturing investment.

Fiscal spending was front-loaded into Q1 2026. Exports of EVs, batteries, and semiconductors are genuinely booming.

Strip all of that out, and what remains, the organic private-sector-driven activity that reflects how actual Chinese households and businesses are doing, is tracking closer to 3% by several independent estimates.

The property sector, which as recently as 2021 accounted for roughly 24% of GDP, has seen its contribution cut in half.

Property investment collapsed 17.2% in 2025 alone. New home prices in March 2026 marked their 23rd consecutive month of year-on-year decline, including falls of 8% to 12% from peak in cities like Shanghai and Beijing, once considered untouchable.

The BIS real residential property price index closed Q4 2025 at 86.79 on a 2010 base of 100. Prices are not just falling. They have erased the entire decade-and-a-half of real gains.

Property was never just a sector

To understand why this matters so profoundly, you have to understand what property actually was in China. It was the savings account, the pension plan, and the primary store of national wealth, all in one.

Residential real estate represents 70% of urban household assets. Land sales funded roughly 20% of local government fiscal revenue, which in turn paid for hospitals, schools, roads, and public services across hundreds of cities and provinces.

At its peak, the property complex was consuming 60% of global cement output and 50% of global steel. It absorbed 25% of all bank loans in China.

This was not a sector running alongside the economy. It was the economy’s skeleton.

Local government land revenues have fallen 44% from their 2021 peak.

Banks are carrying non-performing exposure that official figures almost certainly understate.

An estimated $18 trillion in household wealth has been destroyed since the peak, a number larger than the entire US GDP.

The doom loop nobody in Beijing wants to name

There is a specific economic concept that fits China’s situation precisely, which is a balance sheet recession. The term was developed by economist Richard Koo to describe Japan after 1991.

When the primary asset of a nation’s households collapses in value, those households rationally respond by saving more and spending less, even when interest rates are near zero.

The correct individual response becomes collectively catastrophic.

Chinese household bank deposits have nearly doubled over the past five years.

Consumer confidence remains depressed. Retail sales growth repeatedly misses forecasts.

The People’s Bank of China can cut rates, and it has, but it cannot manufacture the confidence needed to make people spend.

Monetary policy, in this environment, is a lever disconnected from the machine it is supposed to operate.

The second-order effect is the one poisoning the global trading system. Factories that lose domestic demand do not close. They cut prices and export.

China’s industrial overcapacity is now flooding global markets with cheap steel, chemicals, solar panels, and EVs at prices that competitors in Europe, the US, and Southeast Asia simply cannot match.

This looks like Chinese industrial strength. It is, in significant part, Chinese domestic weakness finding an exit valve, and it is the primary driver of the trade tensions escalating around it.

What investors are actually buying when they buy China

The green industrial complex is real. Output in AI-adjacent sectors, including integrated circuits, grew nearly 50% year-on-year in Q1 2026.

EV exports surged 77.5%.

Lithium battery production rose over 40%.

China is winning the green technology race decisively, and these are not manufactured numbers. For investors with long horizons and tolerance for policy risk, there is genuine value in the sectors Beijing has chosen to champion.

The problem is that these industries do not employ enough people, at sufficient wages, to replace the economic mass of what property used to generate.

A semiconductor fab is not a jobs engine. An EV export line does not rebuild the confidence of a household sitting on a mortgage worth more than the apartment securing it.

Goldman Sachs estimates the property downturn dragged approximately 2 percentage points off annual GDP growth in both 2024 and 2025.

The generation that bought the dream

The sharpest way to understand what is happening in China is not through GDP tables or BIS indices. It is through the young professionals who stretched their savings and their parents’ savings to buy an apartment in 2019 or 2020.

That person is now servicing a mortgage on an asset worth 23% less in real terms than when they bought it, in a job market where youth unemployment runs at approximately 20% officially and significantly higher by independent estimates.

They are not consuming. They are not investing. They are doing what every rational actor does in this situation: waiting, saving, and hoping the floor arrives before the ceiling closes in.

Multiply that across tens of millions of households, and you have the actual state of the Chinese economy in 2026.

The GDP number tells you what the state is building.

The property price chart tells you what people are living.

Beijing can paper over the second story with the first one for a while longer, but the BIS data doesn’t take instructions from anyone.

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A pivotal moment for global markets is set to unfold as Alphabet, Amazon, Meta and Microsoft prepare to report earnings on the same day, offering a rare, concentrated look into the health of the artificial intelligence economy.

The simultaneous results from the four technology giants, which together account for a significant share of the S&P 500, are expected to provide critical insight into whether the massive investments being poured into AI infrastructure are translating into sustainable growth.

“Biggest earnings day ever. To the best of my knowledge, these four largest companies have never put it on the same day, so we’re gonna learn a lot in a very short period of time,” Gil Luria, DA Davidson head of technology research, told Yahoo Finance.

AI spending and data centre expansion under scrutiny

At the centre of investor focus is an unprecedented $650 billion combined capital expenditure plan for 2026, largely directed toward building data centres and expanding AI capabilities.

Analysts say the key question is not just how much these companies are spending, but whether they can execute those plans in an environment constrained by energy shortages, regulatory hurdles and supply bottlenecks.

“There’s been plenty of reporting for the last three months about delays in data centres, a lot of regulation, a lot of constraints on the ability to access electricity,” Luria said, adding that the companies’ commentary will determine whether they can meet timelines for expanding infrastructure.

The implications extend far beyond Big Tech, affecting chipmakers, equipment suppliers and a growing ecosystem of smaller cloud providers dependent on hyperscaler demand.

Supply constraints threaten AI momentum

Despite surging demand for computing power following the rise of generative AI tools, infrastructure limitations remain a major hurdle.

“The entirety of the AI complex right now is going to be supply-constrained,” Citizens analyst Andrew Boone said.

He noted that insufficient energy and computing infrastructure could limit how quickly companies scale their AI operations.

Recent developments highlight the intensity of demand.

Companies such as Anthropic have signed multiple infrastructure deals, while Amazon has announced agreements to supply custom chips to Meta.

Meanwhile, Alphabet said its systems now process more than 16 billion tokens, underscoring rapid growth in AI usage.

What analysts are watching across Big Tech

Each of the four companies faces a distinct set of expectations when reporting results.

At Alphabet, analysts expect Google Cloud to drive growth, supported by enterprise adoption of AI tools such as Gemini.

However, margins will be closely watched as rising capital expenditure feeds into depreciation costs.

Amazon’s results will be judged largely on the performance of Amazon Web Services, particularly its ability to expand capacity and manage backlog amid strong AI demand.

Investors are also looking for clarity on its $200 billion capex plans.

At Meta, attention will centre on how AI investments are improving its core advertising business, including targeting and content recommendations.

Analysts say the company needs to clearly demonstrate how AI is translating into revenue growth.

Microsoft, meanwhile, faces questions around capacity constraints in its Azure business and the pace of AI monetisation through products like Copilot.

Margins, monetisation and market expectations

Beyond infrastructure, investors are increasingly focused on whether AI investments are beginning to generate returns.

“The setup going into earnings is pretty straightforward,” Bernstein analyst Mark Shmulik wrote in a note last week.

Companies will need to deliver AI-driven revenue growth, maintain capital expenditure commitments and demonstrate cost discipline through efficiency measures such as layoffs or pricing power.

At the same time, there is a growing debate about whether spending could overshoot expectations.

Some analysts warn that rising capex forecasts may reignite concerns about overspending in the AI race.

A defining moment for the AI trade

The convergence of earnings from the four largest technology companies marks what some analysts describe as one of the most important reporting days in recent years.

Wednesday will be “one of the most significant earnings days in recent memory,” Matt Stucky, chief portfolio manager at Northwestern Mutual, told MarketWatch.

With demand for AI computing power accelerating but infrastructure struggling to keep pace, the results and guidance from these companies are likely to shape investor sentiment not just for Big Tech, but for the broader global economy tied to artificial intelligence.

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The Nikkei 225 Index slipped a bit after the Bank of Japan (BoJ) delivered its interest rate decision amid the ongoing US-Iran war. It dropped to ¥59,920 on Thursday, down slightly from the year-to-date high of ¥60,592.

Bank of Japan interest rate decision 

Japanese stocks retreated as market participants reflected on the latest BoJ interest rate decision, in which officials decided to leave interest rates unchanged, as most analysts were expecting. They left rates at the 30-year high of 0.75%.

The main reason why the Nikkei 225 Index dropped, and the Japanese yen jumped is that more officials voted to increase interest rates in this meeting. Three members voted to hike by 0.25%, up from the previous two.

As a result, there are concerns that the bank will ultimately decide to hike interest rates later this year as inflation continues rising.

The biggest risk for the Japanese economy is that energy prices have surged in the past few months, with Brent and the West Texas Intermediate (WTI) rising to $109 and $97, respectively. 

This rally continued this week as the contentious ceasefire between the two sides continued. At press time, Trump had not responded to Iran’s offer to reopen the Strait of Hormuz.

The BoJ has been relatively hawkish in the past few years as it exited negative interest rates and hiked rates to the highest level in three decades. It also ended the yield curve control, which explains why bond yields have soared recently.

Looking ahead, the Federal Reserve will deliver its interest rate decision on Wednesday, with most analysts expecting that it will leave rates unchanged between 3.50% and 3.75%.

Top companies to publish earnings 

The other important catalyst for the Nikkei 225 Index is the upcoming earnings by some of the top companies in Japan. Hitachi, Advantest, and Astellas Pharma have already released their numbers this week..

The ones to watch today will be Mitsubishi Electric, Shin-etsu Chemical, Fujitsu, Dentso, and Komatsu. 

After this, the biggest Japanese trading houses like Mitsubishi, Mitsui, Marubeni, Sumitomo, and Itochu will release their range. These earnings are watched closely because of the large investments that Warren Buffett has made in them.

The Japanese stock market will react to the upcoming earnings by some of the biggest American companies, including popular names like Apple, Microsoft, Google, and Amazon. These numbers are important because of their size and the fact that they use Japanese supply chains in their AI businesses.

Nikkei 225 Index technical analysis 

Nikkei Index chart | Source: TradingView 

The daily chart shows that the Nikkei 225 Index has wavered in the past few days and is hovering slightly above the important support level at ¥59,297. This support is important as it is the upper side of the cup-and-handle pattern.

The index remains much higher than the 50-day and 100-day Exponential Moving Averages (EMA), while the Average Directional Index (ADX) continues its uptrend. Therefore, the most likely Nikkei Index forecast is bullish as investors target the next key resistance at ¥61,000.

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Global markets started the week with a mixed bag as equities in the region are being lifted by Wall Street’s momentum, while oil remains sensitive to every fresh twist in the US-Iran standoff.

China’s latest profit data suggests some industrial improvement, but the broader recovery still looks uneven.

In India, Sun Pharma is making a giant outbound bet on Organon.

Together, the day’s headlines point to a market obsessed with growth, energy security, and cross-border deal-making.

Asia mixed, led by Japan

Asian markets opened the week mixed, with Japan’s Nikkei 225 standing out after setting a fresh record high at 60,564.18, up 1.4%.

South Korea’s Kospi and Taiwan’s Taiex also advanced, while Hong Kong’s Hang Seng, Shanghai, and Australia’s ASX 200 were softer.

The tone was broadly risk-on, helped by Wall Street’s strong finish and continued appetite for technology shares.

The pattern suggests regional traders are still willing to buy dips, but they are not ignoring the oil shock and Iran-related uncertainty that continue to hang over sentiment.

Oil stays on edge

Oil prices remained elevated as stalled US-Iran peace talks and tighter traffic through the Strait of Hormuz kept supply fears in focus.

Brent crude climbed to $107.49 a barrel, while US WTI rose to $96.17, with both benchmarks extending a run of sharp weekly gains.

The tanker activity has stayed thin, with Tehran restricting the strait and Washington maintaining a blockade on Iranian ports.

Goldman Sachs also raised its year-end price forecasts, warning that the economic risks from the disruption may be greater than the market’s base case suggests.

Sun Pharma’s giant bet

Sun Pharmaceutical Industries has agreed to buy Organon & Co. in an all-cash transaction valued at $11.8 billion in enterprise value, with Organon shareholders set to receive $14 per share.

Organon said the deal gives Sun Pharma access to a portfolio of more than 70 products sold across roughly 140 countries, strengthening its women’s health and general medicine businesses.

The move is seen as one of India’s biggest outbound acquisitions, and the scale alone makes it a major signal for Indian pharma’s global ambitions.

The deal also reflects strategic timing: Sun Pharma is buying into scale, geography, and product breadth at a moment when overseas expansion matters more than ever.

China profits improve

China’s industrial firms reported faster profit growth in March, with profits up 15.8% year on year, after a 15.2% rise in January-February.

For the first quarter, industrial profits rose 15.5%, helped by a broader economic rebound that kept growth near 5%.

But the recovery is uneven: AI-linked manufacturers have been strong, while consumer names remain under pressure from weak domestic demand.

Rising energy costs from the Iran war could further squeeze margins, especially if companies cannot pass on higher input prices.

The data is encouraging, but it does not yet erase the risks from softer exports, cooler industrial output, and a still-fragile demand backdrop.

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Taylor Wimpey share price continued its relentless freefall, reaching its lowest level July 2023, down by over 46% from its since July 2023. It has plunged by over 45% from its highest point in October 2024, erasing billions of dollars in value. This crash may continue in the foreseeable future after releasing mixed results.

Taylor Wimpey’s business is facing major headwinds 

UK housebuilders are among the worst-performers in the London Stock Exchange (LSE) this year as they face a double-whammy of slow demand and high costs.

A report released its trading statement, which showed that its business is struggling as mortgage rates remain at an elevated level.

The statement said that its total order book stood at over £2.22 billion, much lower than £2.3 billion in the same period last year. At the same time, house prices dropped by 1%, with the New South Wales region being the most affected.

The company is also seeing higher costs as energy costs jump. It is experiencing build cost inflation of low to mid single digits. The management added:

“We continue to be highly focused on the operational levers under our control, including driving sales performance, tightly controlling land and WIP spend and mitigating cost where possible.”

Taylor Wimpey’s business will likely remain under pressure in the foreseeable future as the Iran war is not ending any time soon. One major cost is the rising fuel prices, which will affect its transport costs. Other building materials will also continue rising as the war continues.

At the same time, this increase will lead to higher inflation. Indeed, a recent report showed that the headline Consumer Price Index (CPI) jumped to 3.3%, moving further away from the Bank of England (BoE) target of 2.0%. 

As a result, there is a risk that the BoE will maintain a more hawkish tone in the coming meetings. Higher interest rates mean that mortgage rates will remain between 4% and 5% in the foreseeable future, hurting its demand.

On the positive side, Taylor Wimpey continues to pay dividends despite the ongoing challenges. It is also repurchasing its stock, completing the initial purchase of shares worth £34.9 million. This buyback is part of the £52 million authorization.

Taylor Wimpey share price technical analysis 

TW stock chart | Source: TradingView 

The weekly timeframe chart shows that the TW stock has crashed and is now hovering at its lowest level in years. It has crashed below the key support at 85.35p, its lowest level in September last year and the neckline of the double-top pattern.

The stock has moved below the 61.8% Fibonacci Retracement level and is nearing the 78.6%. It has also dropped below all moving averages, a sign that bears remain in control.

The Average Directional Index (ADX) has jumped to nearly 30, a sign that the bearish momentum is continuing. Therefore, the most likely scenario is where the stock continues falling as it continues to lack a clear catalyst. If this happens, the next key target to watch will be at 70p.

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