Key Takeaways
- Norges Bank and the Swiss National Bank (SNB) both held interest rates steady on Thursday, but Norway signaled a likely hike in the near future to combat persistent inflation.
- NATO allies formally agreed to strengthen and modernize their nuclear capacity, reaffirming a commitment to collective defense and burden-sharing amid heightened geopolitical tensions.
- Saudi Arabian supertankers carrying 6 million barrels of crude have reappeared in the Strait of Hormuz, signaling a potential normalization of energy flows following a period of regional disruption.
- S&P 500 earnings for Q1 2026 surged by over 27%, with Q2 projections exceeding 20%, driven largely by record profit margins and the ongoing AI infrastructure buildout.
- The Eurozone current account surplus reached €15.7 billion in April, reflecting resilient trade balances despite fluctuating energy costs.
Central Banks Maintain Rates with Hawkish Bias
Norges Bank kept its policy interest rate unchanged at 4.25% on Thursday, matching market expectations. However, Governor Ida Wolden Bache issued a hawkish warning, stating that a rate increase will "likely be necessary" at one of the forthcoming meetings if the economy evolves as envisaged. The bank cited stronger-than-anticipated inflation pressures and rising business costs as the primary drivers for maintaining a tightening bias.
The Swiss National Bank (SNB) also maintained its key rate at 0%, noting that while inflation rose to 0.6% in May due to higher energy prices, it remains within the target range. SNB Chairman Martin Schlegel emphasized that the bank remains ready to intervene in the foreign exchange market to counter any "rapid and excessive appreciation" of the Swiss franc. Governing board member Petra Tschudin highlighted that Swiss economic activity remains resilient, supported by solid 1.0% GDP growth in the first quarter.
Energy Flows and Geopolitical Security
In a significant development for global energy markets, three Saudi-flagged supertankers—the Awtad, Jaham, and Shaden—were spotted sailing through the Strait of Hormuz on Thursday. These vessels, carrying a combined 6 million barrels of crude, had not transmitted signals for nearly two months during a period of regional conflict. Their reappearance follows a reported memorandum of understanding between the U.S. and Iran aimed at restoring safe passage through the critical chokepoint.
Simultaneously, NATO's Nuclear Planning Group issued a statement reaffirming the alliance's commitment to modernizing its nuclear mission. Allies agreed to invest in the resources and forces required to deliver a credible deterrent, emphasizing the sharing of "responsibilities, risks, and burdens" of collective defense. This move comes as Russia seeks to strengthen its own ties with the ASEAN bloc, with Putin’s aide Kobyakov asserting that Southeast Asian energy security can only be guaranteed through cooperation with Moscow.
Corporate America Defies High Rates
Despite interest rates remaining above 3.5%, the S&P 500 (SPY) is demonstrating remarkable fundamental strength. Corporate earnings for the first quarter of 2026 grew by 27.6%, more than double the initial consensus forecasts. Net profit margins hit a long-term record last quarter and are projected to reach 14% for Q2, the second-highest level since 2009.
The "AI trade" continues to be the primary engine of this growth, with semiconductor and infrastructure companies leading the charge. Analysts note that the market is increasingly focused on durable fundamentals and pricing power rather than short-term sentiment swings. This resilience is further supported by the European Central Bank (ECB) data showing a seasonally adjusted current account surplus of €15.7 billion for April, up from €14.9 billion in March.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.