(The opinions expressed here are those of the authors.)

By Anna Szymanski

May 1 (Reuters) - Everything Mike Dolan and the ROI team

are excited to read, watch and listen to over the weekend.

From the Editor

Hello Morning Bid readers!

This week promised to be one of the year's most eventful

thus far - and it lived up to the billing.

Jerome Powell oversaw his final Federal Reserve meeting as

chair, capping an eight-year tenure that included a pandemic,

regional bank crisis, multiple wars and an unprecedented public

assault on the institution's independence by the White House.

While the central bank kept interest rates on hold at 3.50% to

3.75% on Wednesday, the bigger news was Powell's announcement

that he would stay on as a Fed governor until "things have

calmed down".

Powell stated, however, that he did not intend to act as a

disruptive "high-profile dissident" under his designated

successor, Kevin Warsh, whose nomination to lead the

Fed cleared the Senate Banking Committee on Wednesday.

The other major news out of the Fed meeting was the 8-4 voting

split - the most dissents since 1992. Three regional bank

presidents said they "did not support inclusion of an easing

bias in the statement at this time." And Stephen Miran also once

again dissented in favor of a rate cut. This lack of unanimity

could make communication much harder moving

forward, potentially generating more market volatility in the

months ahead.

The Fed was not the only central bank to face growing division

this week. On Tuesday, the Bank of Japan kept its key policy

rate on hold at 0.75% in a 6-3 vote, with three officials

calling for a hike. That's the biggest split on the board since

2016.

The BOJ arguably faces the most challenging position of all

major central banks due to the triple whammy it faces: spiking

energy prices, rising bond yields and a slumping currency.

Japan's Ministry of Finance intervened to prop up the yen on

Thursday, according to Reuters sources, sending the currency up

as much as 3%. The yen then jumped again on Friday as Japan's

top foreign exchange diplomat warned Tokyo was ready to step

back into markets.

Meanwhile, the stalemate between the U.S. and Iran showed no

sign of easing this week, with neither side returning to the

negotiating table and President Trump reportedly being

briefed on further potential military action.

Trump also met on Tuesday with top officials from U.S. energy

majors, including Chevron, according to Axios, to talk about

possible steps to calm oil markets in the event the U.S.

blockade of Iranian ports continues for months.

On the back of all this, Brent crude edged up during the week

before briefly spiking to a four-year high above $126 a barrel

on Thursday, which reflected both the negative news and

technical factors.

Staying with the oil markets, Reuters reported that OPEC+

is expected to agree to boost oil output targets by around

188,000 barrels per day at its meeting on Sunday. That's largely

theoretical, though, considering that most crude currently

cannot leave the Gulf.

What's more, the meeting will be overshadowed by the absence of

one of its most important members. The United Arab Emirates

announced on Tuesday that it would leave OPEC on May 1 - one

more sign of the growing rift between the UAE and OPEC's de

facto leader, Saudi Arabia. The UAE will now be in a position to

ramp up production once the war ends and the Strait of Hormuz

finally reopens.

The exit is bad news for OPEC, of course, as it will sharply

diminish the producer group's influence over the oil market and

potentially risk an all-out price war after the Iran conflict

concludes.

During this crisis, OPEC has already seen itself supplanted

as the world's "swing producer" by the U.S., which

has solidified its place as the world's dominant energy

superpower.

On the corporate side, European energy majors BP, Shell and

TotalEnergies all reported first-quarter earnings this

week, posting major gains from their trading operations. While

they can't compete with U.S. giants on production, they can

still generate trading windfalls when volatility is sufficient,

highlighting a growing transatlantic rift in the energy industry

between traders and drillers.

The tumult in energy markets - and dwindling hopes of a

permanent ceasefire in the Middle East - had only a modest

impact on equities throughout the week. The S&P 500 and Nasdaq

rose on Thursday, closing April with their biggest monthly gains

since 2020.

How come? One explanation is that the current environment -

characterized by rising geopolitical tensions, a tech arms race

and higher government spending - may be positive for equities.

Another answer is that $100-per-barrel oil simply doesn't mean

what it used to.

The artificial intelligence arms race is obviously one of

the key themes boosting equities - and there was mostly positive

news on that front this week with a parade of mega-cap earnings.

Alphabet on Wednesday beat quarterly revenue estimates on its

best-ever quarter of cloud growth. Amazon also

outperformed cloud revenue forecasts, sending its shares up. And

Apple rose in extended trading on Thursday with a strong sales

forecast.

Meta, on the other hand, disappointed as it increased its

annual capex forecast without proving to investors that this

outlay on AI infrastructure would produce a sufficient return -

sending its share price down more than 6% in extended trading.

Microsoft also failed to impress, reporting a modest increase in

cloud revenue growth compared to Alphabet.

Next week is less jam-packed with market-moving events and

thus may be a bit less eventful - but it's 2026, so don't count

on it.

For more data-driven insights on markets and commodities, check

out Reuters Open Interest. You can learn:

* What is Jerome Powell's greatest legacy as Fed Chair?

* Why might Asia ultimately turn out to be the winner from

the Iran conflict?

* Is the closing gap between U.S. and euro zone interest

rates actually a mirage?

* Why is the Iran war likely to be a lightbulb moment for

Southeast Asia?

* How is China's clean energy industry benefiting from the

Iran conflict?

* What major weather event could soon place further strain

on major power sectors?

I'd love to hear from you, so please reach out to me at .

This weekend, we're reading...

MIKE DOLAN, ROI Finance & Markets Columnist: A new analysis

from the Bruegel think tank looks at how financial markets cope

with political risk, concluding that it is difficult but not

impossible for portfolio managers to navigate.

RON BOUSSO, ROI Energy Columnist: The World Bank published a

special report on the effects of geopolitical oil supply shocks,

breaking down the impact of supply losses on oil prices and the

broader economy.

ANDY HOME, ROI Metals Columnist: This just-released OECD

report looks at the steady accumulation of trade restrictions in

the critical minerals sector. Export controls have risen

five-fold since 2009 and continue to climb. China's rare earth

export controls have grabbed the headlines, but this is a global

trend.

GAVIN MAGUIRE, ROI Global Energy Transition Columnist:

This OurEnergyPolicy report examines the mounting "stranded

asset" risks facing power plant developers as climate mitigation

threatens to strand much of the new capacity they are building.

CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist:

This deep dive from the Oxford Institute for Energy Studies

unpacks the Strait of Hormuz closure. It's dense with detail but

backed by strong analysis.

We're listening to...

ANNA SZYMANSKI, ROI Editor-in-Charge: This University of

Chicago podcast featuring Nobel Prize-winning economist Douglas

Diamond outlines the Federal Reserve's role in the financial

system - and why it matters now more than ever.

And we're watching...

CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist:

Eurasia Group President Ian Bremmer unpacks the wider

implications of the UAE's withdrawal from OPEC in this podcast.

His central argument: this is a fight for the region's future.

Want to receive the Morning Bid in your inbox every weekday

morning? Sign up for the newsletter here. You can find ROI on

the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the authors. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.