This week brought new highs on Wall Street. The S&P 500 and Nasdaq returned to trading at record levels, in a movement led by technology companies and supported by enthusiasm around Artificial Intelligence. Developments in the Middle East have also contributed to a more constructive environment for risk assets. The US and Iran signaled the possibility of resuming negotiations, reducing the risk of an escalation of the conflict.
This relief was particularly relevant to the energy market, considering the importance of the Strait of Hormuz for global oil transport. Brent stabilized near US$95 per barrel, as the market began to discount a lower probability of supply disruption.
At the same time, the US earnings season got off to a positive start. Some of the main banks exceeded expectations, benefiting above all from the tradingin a context of greater volatility in the markets. Goldman Sachs and JPMorgan Chase reported solid revenues in these areas, while investment banking activity remains more subdued.
This performance is linked to a structural change in the business model. Banks are increasingly exposed to hedge funds e trading firmsthrough financing services and prime brokerage.
According to S&P Global Ratings, this dynamic has been accompanied by high levels of leverage and strong concentration of risk. In a scenario of greater volatility, the need to reduce positions can trigger abrupt movements and amplify losses.
Finally, signs of greater complacency begin to emerge. Some extreme movements in stocks associated with Artificial Intelligence suggest a return to more speculative behaviors.
For now, the market continues to ignore these risks, supported by solid results and a macro picture that remains stable enough to support risk appetite.
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