Last week was packed with volatility across financial markets, driven primarily by the “blue tsunami” — the Democrats’ sweeping victory in both chambers of the US Congress. This outcome is forcing investors to reassess the outlook for the artificial intelligence sector as well as the future path of the conflict in Iran. Next week, attention will shift to key US inflation data, the surprising strength of the UK economy, and the risk of supply shocks in energy markets. Against this backdrop, investors are likely to focus on markets such as GBPUSD, US500 (S&P 500 futures) and OIL (Brent crude).
GBPUSD
The UK economy continues to show impressive momentum, which is likely to be confirmed by third-quarter 2026 GDP data due next Thursday. Growth is expected at 0.7%. This week, the Bank of England raised interest rates in response to risks linked to the energy shock. Given the strength of the underlying economy, the probability of the BoE extending its hiking cycle beyond February is increasing, echoing historical episodes in which central banks had to respond to persistently entrenched inflation. At the same time, markets will receive US CPI data next Tuesday, with monthly price growth expected to slow, followed by PPI figures on Friday. The combination of stronger UK fundamentals, a clearly hawkish BoE stance and continued repricing of future US policy under the Democrats could generate higher volatility in GBPUSD.
US500 (S&P 500 futures)
US equities are facing the challenge of pricing in a new political reality in Washington, with direct implications for sentiment around technology companies and AI infrastructure. Investors will enter the new week focused on Tuesday’s US inflation report, which could shape near-term expectations for Federal Reserve policy. The fading earnings season will also remain an important catalyst, with SoftBank and CoreWeave due to report next Tuesday and Cisco Systems among the companies scheduled to publish results after the close next Thursday. After several highly volatile sessions, there is some scope for stabilization, which could allow investors to rebalance portfolios and reassess positioning.
OIL (Brent crude)
The path of energy prices remains a fundamental risk to the European and global economic outlook amid the war in Iran. The oil market also enters next week with the COP31 climate summit underway in Turkey and investors assessing the implications of the US election outcome for Middle East diplomacy. A direct test for crude pricing will come from Thursday’s US Department of Energy data on changes in US oil inventories. Oil’s current sensitivity to supply risks mirrors historical energy shocks, when military uncertainty sharply increased the geopolitical risk premium embedded in prices. Any further deterioration in the situation in Iran could keep crude oil at the center of the global inflation outlook.
OpenAI plans to continue investment in AI data centers 📈 Nasdaq rebound continues
OIL loses after reaching $100 📉Is Iran reviewing a change to its nuclear program?
🚩 EURUSD loses 0.6%
US Open: Nasdaq rebounds after the largest decline since 19-month 🔼 Lam Research surges 12%
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.