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%