InvestMacro

The US stock indices retreated from their historical highs amid a new wave of escalation in the Middle Eastern crisis. By the end of the day, the Dow Jones (US30) Index fell by 1.21%. The S&P 500 (US500) Index declined by 0.74%. The Technology‑heavy NASDAQ (US100) closed down by 0.29%.

The direct exchange of military strikes between the US and Iran affected third countries in the Persian Gulf, disrupting the fragile ceasefire and prolonging the naval blockade of key energy routes. A simultaneous surge in oil and fuel prices triggered a sharp jump in US Treasury yields across the curve, while strong macroeconomic data, including the May ADP report (122,000 new jobs versus the prognosis of 110,000) and the ISM services PMI with its price component at a four‑year high, finally convinced investors that the Federal Reserve will be forced to keep interest rates at a tight, restrictive level for an extended period. This macroeconomic backdrop triggered a large‑scale flight from risk assets, hitting the technology and financial sectors the hardest. Shares of major software companies entered a deep correction: Oracle and Palantir plunged more than 5%, while Microsoft’s market capitalization fell by 3%.

Bitcoin continued to decline, dropping to the $61,000 mark, its lowest level since the escalation of the conflict with Iran in late February, before trimming losses to around $64,000. Since Strategy Inc. sold part of its large bitcoin holdings worth about $2.5 million, the digital assets has fallen by roughly 16%. The company is one of the largest corporate bitcoin holders and is widely viewed as a representative of the digital assets management model. Bitcoin is now down more than 50% from its peak above $126,000 reached in October of last year. US-listed bitcoin exchange‑traded funds (ETFs) also recorded nearly $4 billion in outflows over 12 consecutive sessions – a record streak.
The Organization for Economic Co‑operation and Development (OECD) published an updated macroeconomic report in which it sharply downgraded its global growth expectation for the current year from the previous 3.4% to 2.8%, while keeping its 2027 estimate unchanged at 3.1%. The revision is directly linked to the prolonged Middle Eastern crisis. The key factors weighing on global activity in the coming years will be entrenched increases in energy prices, supply shortages, tight financial conditions due to high central bank rates, and a general decline in business confidence.

European indices were under pressure yesterday. By the end of the day, Germany’s DAX (DE40) fell by 1.31%, France’s CAC 40 (FR40) closed down by 0.71%, Spain’s IBEX 35 (ES35) declined by 0.53%, and the UK’s FTSE 100 (UK100) finished the session down by 0.40%.

European stock indices closed with notable losses as persistent inflation concerns were compounded by a new wave of global protectionism from Washington. The Donald Trump administration threatened to impose additional import tariffs of up to 12.5% on several trading partners due to ineffective oversight of goods produced using forced labor. This tariff threat instantly revived trade barriers between the US and the EU, coinciding with another escalation in the Middle East, where new armed clashes between Iran and the Gulf monarchies effectively derailed the fragile ceasefire. Against this backdrop, the banking sector – highly sensitive to rising systemic risks – came under the strongest pressure: shares of Italy’s UniCredit, Spain’s BBVA, and Germany’s Deutsche Bank plunged between 2% and 3.7% lower.

Prices for US WTI crude oil extended their rally, rising more than 2% to $95.7 per barrel amid a combination of severe domestic supply shortages in the US and a critical escalation in the Middle East. The main local trigger for the bulls was the latest weekly report from the Energy Information Administration (EIA), which recorded a sixth consecutive decline in US commercial crude inventories – this time by 7.97 million barrels. This drop not only doubled analysts’ consensus expectations of a 4‑million‑barrel decrease but also became the largest weekly outflow from US storage facilities since February of this year, revealing a significant physical supply shortfall in the market. At the same time, commodity traders priced a geopolitical risk premium into the barrel, completely ignoring another wave of verbal optimism from Washington. US President Donald Trump publicly stated that Iran had allegedly agreed to abandon its pursuit of nuclear weapons. However, the real situation in the region only worsened: overnight, direct clashes between US and Iranian forces were the fiercest since the ceasefire was announced, with Kuwaiti and Bahraini territories caught in the crossfire.

In Asia on Wednesday, Japan’s Nikkei 225 (JP225) rose by 2.50%, China’s FTSE China A50 closed up by 0.46%, Hong Kong’s Hang Seng (HK50) fell by 1.56%, and Australia’s ASX 200 (AU200) gained 0.70%.

The Australian dollar remained below the 0.715 USD mark. The national currency received local support from strong domestic data: Australia’s April trade balance returned to a surplus of 1.79 billion AUD after a March deficit of 1.02 billion, driven by a sharp surge in iron ore and coal exports while imports remained stable. At the same time, earlier this week, weak Q1 GDP data confirmed that the three rounds of monetary tightening by the Reserve Bank of Australia this year have already begun effectively cooling domestic consumer demand and restraining underlying price pressures.

The major US stock indices continued to rise. By the end of the session, the Dow Jones (US30) gained 0.45%, the S&P 500 (US500) increased 0.13%, and the tech‑heavy Nasdaq (US100) closed 0.48% higher. The leading US benchmarks once again renewed their all‑time highs, with the S&P 500 closing above the symbolic 7,600‑point mark for the first time in history, while the Dow Jones Industrial Average added more than 200 points. Powerful investor optimism surrounding the artificial intelligence and semiconductor infrastructure sectors completely overshadowed the persistent geopolitical uncertainty in the Middle East.

The true sensation of the day was Marvell Technology, whose shares surged 32%. The rally was triggered by a public statement from Nvidia CEO Jensen Huang, who suggested that Marvell has a real chance of becoming the next technology company to reach a $1 trillion market capitalization. Shares of Hewlett Packard Enterprise (HPE) jumped 19% after the company sharply raised its sales and profit expectations, citing exponential growth in demand for AI‑server infrastructure.

Bitcoin (BTC/USD) posted a notable decline, falling more than 2% and dropping below the psychological $70,000 threshold – its lowest level since April 8. The market was surprised by news that Strategy Inc., known for its long‑standing aggressive accumulation of digital gold, executed a symbolic sale of roughly $2.5 million worth of Bitcoin – its first sale since late 2022. Although the amount is relatively small, the very fact that the company deviated from its pure HODL strategy sparked serious concerns about the sustainability of corporate treasury demand for digital assets. Additional pressure came from the ongoing liquidity crunch in the regulated sector: US spot Bitcoin ETFs recorded 11 consecutive sessions of net outflows, losing a total of approximately $3.45-3.5 billion.

European indices also posted solid gains yesterday. Germany’s DAX (DE40) rose 0.48%, France’s CAC 40 (FR40) closed 0.77% higher, Spain’s IBEX 35 (ES35) gained 0.48%, and the UK’s FTSE 100 (UK100) ended the session 0.33% higher. The main driver of stabilization across European markets was fresh commentary from the White House. US President Donald Trump publicly confirmed that diplomatic channels with Tehran remain open and suggested that a temporary 60‑day agreement to unblock the Strait of Hormuz could be signed as early as next week. Optimism strengthened further after confirmation that a ceasefire between Israel and Hezbollah in Lebanon had come into effect.

However, the potential for a stronger rally was limited by internal EU macroeconomic factors. Preliminary Eurostat estimates showed a further acceleration of eurozone inflation in May, driven primarily by extreme volatility in oil and gas prices. The latest release confirmed persistent price pressures in the region and reinforced market expectations that Christine Lagarde will move forward with an ECB rate hike (the probability of an increase next week exceeds 90%).

WTI crude oil prices showed elevated volatility in the $92-95 per barrel range. The commodity market shifted into consolidation mode after a powerful rally the previous day, when prices jumped 5.5% following Iran’s threat to completely shut down the Strait of Hormuz in response to escalating tensions in Lebanon. The main source of uncertainty remains the unclear prospects of a temporary peace agreement between Washington and Tehran. President Trump maintains strong optimism, stating that diplomatic contacts are progressing and that a memorandum of understanding guaranteeing the reopening of the Strait could be signed as early as next week. Meanwhile, Iranian state media present a sharply different narrative, expressing deep skepticism about any progress and accusing Washington of aiding Israeli attacks.

In Asia on Monday, Japan’s Nikkei 225 (JP225) fell 0.30%, China’s FTSE China A50 closed 2.09% higher, Hong Kong’s Hang Seng (HK50) gained 2.52%, while Australia’s ASX 200 (AU200) slipped 0.06%.

The People’s Bank of China (PBoC) officially announced its decision to completely halt reverse‑repo operations, citing the current funding needs of primary dealers within standard open‑market procedures. This move marks a historic precedent, as the Chinese regulator refrained from injecting short‑term liquidity through this tool for the first time since August 2024. The effective zeroing of reverse‑repo volumes clearly indicates that monetary authorities consider liquidity levels in the national banking system fully sufficient, eliminating the need for additional emergency injections and confirming the stability of China’s domestic financial sector.

The main US stock indices started the summer with confident gains. By the end of the day, the Dow Jones (US30) rose by 0.26%. The S&P 500 (US500) increased by 0.09%. The Tech‑heavy NASDAQ (US100) closed higher by 0.60%. Powerful fuel for buying came from new geopolitical statements by the White House and a loud technological announcement in the artificial intelligence sector. The main locomotive of the market rally was the technology sector, where Nvidia produced a real sensation. Its shares jumped 6.3% after the official presentation of the new RTX Spark superchip, which marks the corporation’s aggressive entry into the mass personal computer market. Nvidia’s success instantly triggered a chain reaction across the entire IT complex.

On Monday, by the end of the day, Germany’s DAX (DE40) fell by 0.40%, France’s CAC 40 (FR40) closed down by 0.45%, Spain’s IBEX 35 (ES35) declined by 0.97%, and the UK’s FTSE 100 (UK100) ended the session lower by 0.68%. The main trigger for the market reversal into the red zone was alarming reports from the Middle East that the Iranian delegation had unilaterally halted indirect negotiations with the United States. Tehran responded with this demarche to Israel’s large‑scale expansion of its military operation in Lebanon. The situation worsened after official statements from Iran, in which it not only threatened a total military blockade of the strategically important Strait of Hormuz but also promised to extend its countermeasures to the Bab el‑Mandeb Strait near the Horn of Africa in response to alleged violations of the ceasefire.

Oil prices ended the first trading day of June with a powerful rally: US WTI crude jumped by 6%, settling above $92 per barrel. During the session, the market nearly entered panic mode when WTI quotes spiked more than 8% intraday. The catalyst for the price shock was publications in Iranian state media claiming that Tehran was fully freezing any contacts with Washington in response to new military strikes in Lebanon and was beginning preparations for a total shutdown of the Strait of Hormuz. The risk of an immediate loss of one‑fifth of global hydrocarbon supplies pushed geopolitical risk premiums to the maximum. The unprecedented intraday overheating of prices was cooled only by US President Donald Trump personally. In his special statement, he said that Israel and Hezbollah had reached an agreement on a mutual ceasefire in Lebanon, and that diplomatic dialogue with Iran, contrary to rumors, was continuing.

The US natural gas prices showed a notable correction, dropping more than 3% and falling below $3.2 per MMBtu (million British thermal units). Thus, “blue fuel” retreated from the local high of $3.29 reached in the previous session amid profit‑taking and traders reassessing the supply‑demand balance. Despite the daily decline, May turned out to be extremely successful for the US gas market: by the end of the month, prices surged 18.9%, fully offsetting April’s 4.1% drop.
In Asia on Monday, Japan’s Nikkei 225 (JP225) rose by 0.91%, China’s FTSE China A50 closed lower by 1.06%, Hong Kong’s Hang Seng (HK50) gained 0.86%, and Australia’s ASX 200 (AU200) fell by 0.03%.

The offshore yuan showed confident strengthening, reaching around 6.76 yuan per dollar. The Chinese currency approached its highest levels since February 2023. Against the backdrop of a sharp escalation of the geopolitical crisis around Iran, international investors increasingly began redirecting capital into Chinese assets, viewing them as a relatively safe haven. China’s leadership traditionally strives for strict exchange‑rate stability to prevent excessive appreciation of national exports amid a stagnating industrial PMI. This defensive stance of the monetary authorities is clearly reflected in the regulator’s actions: the People’s Bank of China continues to set daily reference fixings at levels noticeably weaker than market expectations.

By the end of the day, the Dow Jones Index (US30) rose by 0.72% (up +1.49% for the week). The S&P 500 Index (US500) gained 0.37% (up +1.80% for the week). The Technology‑heavy NASDAQ Index (US100) closed higher by 0.20% (up +2.58% for the week).

On Friday, May 29, 2026, US stock indices ended the session at new historical highs, recording phenomenal results for the entire month. The main triumph of May was the Technology‑focused NASDAQ, which jumped more than 8% over the month. The broad‑market S&P 500 added 5% in May, while the industrial Dow Jones rose 3%. A powerful long‑term driver for the equity market was another wave of AI euphoria, supported by strong corporate news. Shares of IT giant Dell posted an incredible surge of +33% as the company sharply raised its profit and revenue expectations thanks to an avalanche‑like increase in demand for its artificial‑intelligence server equipment.

In turn, Oracle (+10%) and Microsoft (+5%) received a strong investment boost amid news of a new funding round for the startup Anthropic, confirming the continued resilience of the AI trend. At the same time, the stock market was supported by a local improvement in the geopolitical backdrop. Reports that the US and Iran had agreed on a 60‑day memorandum to extend the ceasefire and unblock the Strait of Hormuz (although the document is still awaiting Donald Trump’s signature) led to a decline in energy prices and US Treasury yields.

The Canadian dollar (CAD) weakened significantly, falling below 1.378 per US dollar. The main reason for the sell‑off in the “loonie” was weak macroeconomic data, which effectively forced investors to price in an exclusively “dovish” scenario for the Bank of Canada’s next steps. The biggest disappointment for the market was the GDP report: in the first quarter of 2026, the Canadian economy unexpectedly contracted in annual terms. Since this marks the second consecutive quarterly decline, analysts openly began speaking about a technical recession and a deep domestic slowdown. Against this backdrop, market participants have virtually no doubt that at the upcoming meeting on June 10, the Bank of Canada will prefer to pause and leave interest rates unchanged.

On Friday, Germany’s DAX (DE40) rose by 0.05% (up +0.87% for the week), France’s CAC 40 (FR40) closed down by 0.07% (up +0.83% for the week), Spain’s IBEX 35 (ES35) gained 0.46% (up +2.10% for the week), and the UK’s FTSE 100 (UK100) ended the session lower by 0.16% (down -0.33% for the week). The external backdrop for European assets remains mixed. On the one hand, markets were supported by reports from the White House that the US and Iran had agreed on a 60‑day memorandum to extend the ceasefire and launch official negotiations, which is now awaiting Donald Trump’s approval. On the other hand, the balance of risks worsened due to a new escalation in Eastern Europe, where, during a nighttime attack on Friday on Ukrainian border infrastructure, a Russian drone struck a building in the Romanian city of Galați, triggering a sharp reaction from the NATO member state.

WTI crude oil prices fell by 1.1%, dropping below $88 per barrel – the lowest level in the past six weeks. This decline capped an extremely unsuccessful month for the commodity market: in May alone, WTI prices plunged by 16%. Investors are actively pricing in a preliminary agreement between the US and Iran on a 60‑day extension of the ceasefire and the restoration of commercial shipping, despite the fact that Donald Trump has not yet signed the document, and official Tehran states that the deal is not finalized. Analysts urge the market not to get carried away and warn that the actual return of supply to the global market will be a complex and uneven process.

In Asia on Friday, Japan’s Nikkei 225 (JP225) rose by 2.53% (up +1.80% for the week), China’s FTSE China A50 closed higher by 0.31% (up +2.51% for the week), Hong Kong’s Hang Seng (HK50) gained 0.70% (down -1.79% for the week), and Australia’s ASX 200 (AU200) increased by 1.62% (up +0.87% for the week).

China’s Manufacturing PMI indicated stagnation in the industrial sector, falling to the critical level of exactly 50.0 points. The main restraining factors remain weak domestic demand and persistently high costs for raw materials and components. The internal sub‑indices point to cooling across all key areas, as production growth slowed to a three‑month low of 51.2 points, while the volume of new domestic orders returned to contraction territory at 49.9 points.
The New Zealand dollar (NZD) saw a slight correction, slipping to around 0.596 USD, but the “kiwi” continues to hold near its three‑month highs. The fundamental position of New Zealand’s currency remains strong thanks to a sharp rise in aggressive market expectations for monetary tightening. The main driver behind the continuation of the long‑term upward trend was Friday’s remarks by Reserve Bank of New Zealand Governor Anna Breman. She openly warned investors that to combat entrenched inflation, the regulator will likely have to raise the Official Cash Rate significantly faster and more aggressively than previously projected. The probability of a rate hike at the next meeting in July has surged to 80%.