The week ended with markets focusing squarely on the growing tension surrounding Iran, with negotiations entering into what officials described as an agreement Critical stage. Brokers including Pakistan, Qatar and Saudi Arabia It worked urgently to secure at least a temporary framework agreement aimed at preventing renewed US and Israeli military action. Diplomatic efforts are focused on extending the ceasefire and buying time for broader negotiations, however Major divisions remain – Especially with regard to Iran’s uranium enrichment program and how quickly Tehran must make nuclear concessions in exchange for easing sanctions and reducing hostilities.
Reports indicated that there was only… Modest progress So far, the two sides remain far apart. Iran seeks Easing sanctions, protecting against future attacks, and reopening trade routes Before making major nuclear concessions, while the United States demands Tighter nuclear restrictionsIncluding restrictions on enrichment and the delivery of weapons-grade materials before providing broader aid. Officials warned that if the talks fail, the United States and Israel may consider it Renewed strikesIt will likely target Iran’s economic and energy infrastructure to increase pressure on Tehran. Iran responded by warning that it would respond on a large scale to any new military action.
The geopolitical backdrop remains highly uncertain. Israel is reportedly concerned that President Trump might agree to a deal seen as… Very lenient on Iran’s nuclear and missile programsWhile Prime Minister Netanyahu remains skeptical about the success of diplomacy. Trump indicated that he prefers a negotiated solution, but he also warned against this Military action is still on the table If no agreement is reached. As a result, markets continue to react sharply to every headline associated with the negotiations Oil prices, Treasury yields, stocks and the US dollar Everyone experiences extreme fluctuations at the weekend. Note: President. Trump will stay in Washington for the weekend and will miss his son (Don Jr.). Wedding in the Bahamas.
University of Michigan’s final consumer confidence report for May A A weaker picture for the American consumer than expected. The main index fell to 44.8 out of 48.2marking a third straight monthly decline and pushing sentiment near historic lows since mid-2022. Rising gasoline prices linked to supply disruptions in the Strait of Hormuz remained a major concern. 57% of consumers cite rising costs of living as a financial stressor. Low-income families were the most affected. More importantly for markets and the Fed, Inflation expectations rose again. One-year forecasts rose to 4.8% from 4.5%While the five-year forecast jumped to 3.9% from 3.4%This raises concerns that inflationary pressures may become more persistent. The report supports Higher yields and a stronger US dollar Because it lowers expectations for near-term interest rate cuts from the Fed, while also raising concerns about consumer spending and future growth.
Fed Governor Christopher Waller strengthened Falcon dialectfalling strongly against expectations of lower interest rates in the near term. Waller said he did not expect to support a policy change any time soon and warned that inflation risks were associated with that High energy prices and rising inflation expectations It became more worrying. He said the labor market is now largely balanced, shifting the Fed’s focus squarely toward inflation. Waller warned that the Fed’s deficit inflation is entering a phase Sixth year He said he would not hesitate to support raising interest rates if inflation expectations become unstable. Although he is not actively advocating for rate hikes now, he said the Fed should remove its accommodative bias, and said discussions about rate cuts are premature given current inflation pressures. He also pointed out Consumer spending remains resilient And there is no sign of Artificial intelligence-based investing booms Slows down.
President Donald Trump formally swore in Kevin Warsh as the new Chairman of the Federal Reserve, praising him as uniquely qualified to lead the institution while emphasizing… Independence of the Federal Reserve The importance of maintaining strong economic growth. Trump argued so Low inflation can coexist with strong growth He pointed to the stock market rise as evidence that investors welcomed Warsh’s appointment.
In his statements, Warsh hit A Confident and reform-oriented tonepledging to lead the Fed with “energy and purpose” while remaining true to its mission. He said the coming years could bring Strong prosperity and rising living standardsconfirming this It is possible to achieve both low inflation and strong growth. Warsh also signaled his willingness to modernize the Fed and learn from past mistakes and successes.
Looking ahead, traders will focus on the markets next week Inflation, central banks and geopolitical risks. The main event for the United States will be on Thursday Core inflation report for personal consumption expenditures — the Fed’s preferred measure of inflation — as Warsh begins his term facing rising inflation expectations and persistent price pressures. You will also be monitoring the markets Consumer confidence, GDP revisions, housing data, and Fed speakers Including Austin Goolsby and John Williams. Globally, attention will shift to… RBNZ decision, BOJ comment, Japanese inflation data, Chinese PMIs, Canadian GDP. The geopolitical headlines surrounding Iran remain the most important The main wildcardAs oil, yields, stocks and the US dollar continue to react sharply to each new development. Weak holiday liquidity conditions early in the week may exacerbate volatility.
A snapshot of the markets at the end of the week shows:
- Dow Jones Industrial Average +0.59%
- S&P +0.33%
- Nasdaq index. +0.11%
For the trading week:
- Dow Jones +2.10%
- Standard & Poor’s +0.83%
- Nasdaq +0.38%
In the US debt market, yields end the day mixed with a flatter yield curve, as markets price a rise in 2026 which could lead to slower growth.
- Two years 4.123%, +3.6 basis points
- 5 years 4.256%, +0.01 basis points
- 10 years 4.558%, = 2.6 basis points
- 30 years 5.064%, -4.7 basis points
For the week:
- The two-year yield rose 4.4 basis points
- The return is 5 years unchanged
- 10-year yield -4.1 basis points
- The 30-year yield is -5.9 basis points
Looking at the US dollar today, it was mixed against the major currencies. dollar against::
- EUR +0.10%
- Japanese Yen +0.12%
- GBP-0.08%
- CAD+0.23%
- Swiss Franc -0.245
- Australian Dollar +0.22%
- NZD +0.27%
Throughout the week, the dollar’s performance was also mixed. :
- EUR +0.15%
- Japanese Yen +0.28%
- GBP +0-.92%
- Swiss Franc -0.19%
- CAD +0.51%
- Australian Dollar +0.17%
- NZD -0.34%
In other markets:
- The price of crude oil was almost unchanged at $96.37 and was down -4.73% over the week
- Gold is down -$36 on the day and is down -$34 on the day or -0.73%
- Silver was down -$1.23 on the day at $75.45, and was down -0.46% on the week.
