General Market News

The S&P 500 is trading near unchanged as oil prices dropped roughly 1% following reports that the U.S. offered Iran a temporary sanctions waiver, easing inflation concerns. The market remains volatile amid ongoing Strait of Hormuz supply disruptions, elevated Treasury yields near 4.59% on the 10-year, and geopolitical uncertainty from Trump's warnings to Iran. Traders are watching the key technical level of 7427.83 for direction.

• WTI crude fell to near $101/barrel and Brent to ~$108 on unconfirmed Iran sanctions waiver reports, rotating money into transportation and retail while pressuring energy stocks
• The 10-Year Treasury yield holding at 4.59% and 30-year above 5.1% continue weighing on growth stocks, creating a split where the Dow gains 0.4% while the Nasdaq struggles
• NextEra Energy announced a $67 billion all-stock acquisition of Dominion Energy to form the world's largest regulated utility, with Dominion surging 11% on AI data center power demand expectations

Market veteran Ed Yardeni predicts the Federal Reserve will need to raise interest rates in July 2026 to restore credibility with bond markets, despite incoming Chair Kevin Warsh's dovish stance. Treasury yields have surged, with the 30-year bond exceeding 5%, prompting concerns about 'bond vigilantes' punishing the Fed for being too accommodative amid inflation pressures.

• Markets now price in a 42% probability of a rate hike by year-end, with only 4.2% odds for July specifically, making Yardeni's call well outside consensus
• The 30-year Treasury yield has climbed to 5.138%, its highest level in nearly a year, driven partly by geopolitical tensions including the Iran war
• Yardeni argues a preemptive quarter-point hike in July could paradoxically help lower long-term borrowing costs by appeasing bond markets and preventing the Fed from losing control

The European Union will lower its growth forecast and raise inflation projections in its spring report due to a 'stagflationary shock' caused by an ongoing war with Iran. The conflict has closed the Strait of Hormuz, keeping oil prices above $100 per barrel and depleting global oil stockpiles at record pace, with potential shortages looming for Europe.

• EU Commissioner Valdis Dombrovskis confirmed growth forecasts will be revised down while inflation forecasts increase, with policymakers having 'more limited' room for fiscal response compared to the pandemic era
• The IEA warns global oil inventories may not recover until December 2027, with physical shortages potentially affecting Europe by month's end as stockpiles deplete at record pace
• The EU continues releasing strategic oil reserves but faces supply bottleneck risks if the conflict becomes more protracted, prompting calls for temporary, targeted support measures that avoid increasing fossil fuel demand

JPMorgan has warned that cyclical stocks, which have outperformed defensive stocks in both Europe and the US this year despite geopolitical tensions, may be due for a near-term pause. The bank points to a growing divergence between cyclical stock valuations at highs and softening economic indicators, along with narrowing market breadth, as key headwinds to continued outperformance.

• European cyclicals versus defensives are trading at highs while purchasing managers' indices have softened, creating a valuation gap that poses a near-term risk
• Market breadth has narrowed sharply with the proportion of stocks outperforming on a three-month basis hitting fresh lows in both the US and Europe
• JPMorgan recommends utilities, consumer staples and pharmaceuticals for near-term defensive rotation, but expects cyclicals to resume leadership in the second half if geopolitical risks subside

U.S. House lawmakers introduced bipartisan legislation proposing an annual $130 fee for electric vehicles and $35 for certain plug-in hybrids to fund road repairs. The measure addresses the revenue gap created by EVs not paying gasoline and diesel taxes, which currently fund most federal road maintenance. This comes as Congress works on a five-year, $500+ billion highway reauthorization bill before the September 30 deadline.

• Electric vehicles would pay $130 annually while some plug-in hybrid models would pay $35 per year
• The proposal is part of a five-year highway reauthorization bill expected to exceed $500 billion, with current authorization expiring September 30
• Most federal road repair funding comes from diesel and gasoline taxes that EVs do not currently pay, creating a funding shortfall

Michael Burry, known for predicting the 2008 crisis, warned in May 2026 that the AI-driven Nasdaq rally mirrors the dot-com bubble's final stage, raising concerns about Bitcoin's fate. Bitcoin has traded like a high-risk tech asset with a record 0.96 correlation to Nasdaq in April, meaning a tech selloff could drag crypto down. However, the CLARITY Act's passage through the Senate Banking Committee on May 14, 2026, classifying Bitcoin as a digital commodity, may fundamentally change its relationship with traditional markets.

• The Nasdaq Semiconductor Index surged over 10% in one week and 65% in 2026, while the Shiller CAPE ratio hit 40.1, a level only seen before at the dot-com peak when the index subsequently lost nearly 80% of its value.
• Bitcoin spot ETFs held $104.29 billion in assets as of May 15, 2026, controlling 6.58% of Bitcoin's entire market cap, with institutional ownership causing Bitcoin to follow Nasdaq sell-offs closely while often ignoring equity rallies.
• The CLARITY Act triggered immediate market response with Bitcoin jumping to $81,900, Coinbase up 9.10%, and $250 million in short liquidations within four hours, formally establishing Bitcoin's status as a digital commodity under CFTC jurisdiction.

Bitcoin fell to its lowest price since May 1, trading around $76,850 on Monday, triggered by President Trump's escalating threats against Iran and rising Treasury yields. The selloff led to over $699 million in cryptocurrency liquidations over 24 hours, while spot bitcoin ETFs recorded $1 billion in net outflows last week, ending a six-week inflow streak.

• More than $190 million in bitcoin positions were liquidated as the price dropped below $76,700, with total crypto liquidations exceeding $699 million in 24 hours
• H.C. Wainwright upgraded Circle Internet to 'buy' and raised its price target to 150 from 85, citing the successful $222 million ARC token presale that valued the network at $3 billion
• HIVE Digital stock surged 30% after announcing plans for an AI gigafactory in Toronto with 320 megawatts capacity, designed to host over 100,000 GPUs at full build-out by late 2027

The U.S. Supreme Court declined to hear pharmaceutical industry challenges to Medicare drug price negotiation provisions from Biden's 2022 Inflation Reduction Act. Six major drugmakers, including Novo Nordisk and AstraZeneca, had argued the plan unconstitutionally forces them to accept government-dictated discounts. The Trump administration is continuing to defend and implement the program, which began negotiating prices on 10 drugs this year.

• The law requires drugmakers to negotiate maximum prices with Medicare or face steep daily excise taxes and withdrawal from Medicare programs, affecting medications with high expenditures for Americans 65 and older
• Drugmakers claimed the plan violates Fifth Amendment due process and takings protections, as well as First Amendment free speech rights by compelling them to endorse government pricing views
• Lower appeals courts in Philadelphia and Manhattan sided with the government in all six cases, and the first negotiated prices on 10 drugs took effect in 2026

U.S. stocks opened cautiously on Monday, with the Dow falling 44 points, as investors reacted to Treasury yields near multi-month highs and elevated oil prices above $103 per barrel. Rising inflation concerns tied to Middle East tensions and energy costs are dampening sentiment after last week's record highs, while markets await key earnings from Nvidia and Walmart.

• The 10-year Treasury yield climbed to 4.631%, its highest since February 2025, amid a global bond selloff reflecting fears that elevated oil prices could keep inflation and borrowing costs higher for longer.
• WTI crude traded above $103 and Brent above $107 per barrel due to stalled Iran conflict resolution and geopolitical tensions, including a reported drone strike on a UAE nuclear plant.
• Markets now price over 40% probability of a Fed rate hike in January, with critical earnings from Nvidia (Wednesday) and Walmart expected to shape sentiment amid AI demand and consumer spending concerns.

U.S. stock indices opened lower on Monday, May 18, 2026, but showed signs of buyer interest in early trading. All three major indices—Nasdaq 100, Dow Jones 30, and S&P 500—drifted downward overnight but are testing key support levels that could spark a rebound, though the analyst views all three as overbought.

• Nasdaq 100 hovering around the psychologically important 29,000 level, with potential downside to 28,000 if support breaks, though consolidation is the more likely scenario
• Dow Jones 30 finding support at 49,000, with resistance at 50,000; a break below could test the 50-day EMA around 48,000
• S&P 500 attempting to recover toward 7,500 after early weakness, with 7,300 serving as the near-term floor for the bullish but overbought index

U.S. stock futures edged lower Monday as investors prepare for a busy earnings week featuring Nvidia, Walmart, Target, and Home Depot, while monitoring tensions with Iran that pushed oil prices near $109. The S&P 500 posted its seventh consecutive weekly gain despite Friday's sluggish finish, with notable pre-market movers including Dominion Energy surging on an acquisition by NextEra Energy and UnitedHealth dropping after Berkshire Hathaway disclosed it sold its stake.

• Dow and S&P 500 futures down 0.3% and 0.2% respectively; West Texas Intermediate crude hovering around $105 after hitting nearly $109 on escalating Iran tensions as Trump warned 'the clock is ticking' on a deal
• Major earnings releases scheduled this week from Nvidia and retail giants Walmart, Target, TJX, Home Depot, and Lowe's, with Fed meeting minutes due Wednesday to provide insights on inflation and rate outlook
• Dominion Energy stock surging on NextEra Energy acquisition deal; UnitedHealth shares falling after Berkshire Hathaway disclosed it sold stakes in UnitedHealth, Amazon, Mastercard, and Visa in Q1; Regeneron tumbling after melanoma drug trial failed to meet primary endpoint

S&P 500 futures declined Monday as rising Treasury yields and oil prices above $106 per barrel pressured Wall Street, with the Nasdaq-100 posting its worst session since late March. The 30-year Treasury yield hit a one-year high while three consecutive upside inflation surprises have eliminated near-term rate cut expectations, with some analysts now discussing potential Fed rate hikes.

• Key technical level at 7,363.25 would change the minor trend to down if breached, with potential targets at 7,199.50, 7,131.25, and 7,079.25
• Nvidia earnings Wednesday and retail reports from Walmart and Target will test whether rising energy costs are impacting consumers and if AI spending justifies current market valuations
• Oil above $106 (WTI) and near $110 (Brent) due to ongoing U.S.-Iran conflict and effective Strait of Hormuz closure continues feeding inflation concerns

US stock futures opened lower on Monday, continuing last week's decline, as investors worry about rising bond yields, persistent inflation, and elevated oil prices. The Dow Jones futures were down 262 points (0.4%), while S&P 500 and Nasdaq futures fell 0.3%. Oil prices eased from overnight highs above $108/barrel after reports suggested progress in US-Iran negotiations regarding sanctions relief.

• The US 30-year Treasury yield climbed above 5.1%, its highest level since 2023, after stronger-than-expected inflation data fueled concerns the Federal Reserve may keep rates higher for longer
• WTI crude oil retreated to just over $105/barrel from overnight highs above $108 after Iranian news agencies reported Washington 'has accepted the lifting of Iran's oil sanctions' with Pakistan acting as intermediary
• Market focus this week centers on NVDA (Nvidia) earnings Wednesday after the bell, described as 'the heartbeat of the entire AI trade' and critical to overall market sentiment, alongside global PMI data and inflation reports from the UK and Canada

US stock index futures fell sharply on Monday, with Dow futures down 373 points, as rising Treasury yields and oil prices renewed concerns about elevated borrowing costs. Investors are awaiting Fed minutes this week for policy direction and key earnings from Nvidia and Walmart to test market resilience amid tighter financial conditions.

• Dow futures dropped 373 points (0.8%), while S&P 500 and Nasdaq-100 futures fell 0.4% and 0.3% respectively, pressured by higher yields and oil prices
• Federal Reserve minutes due Wednesday will be closely watched for any shift in policy stance as inflation risks remain sticky
• Nvidia and Walmart earnings this week will test whether corporate results can offset unfavorable rate conditions, offering insights into AI spending and consumer demand

Inter IKEA, the franchiser of IKEA stores in 63 countries, is cutting 850 jobs (3% of its workforce) as part of a cost-reduction effort amid falling consumer demand and two consecutive years of declining sales. The company cites rising costs, the Iran war's impact on consumer confidence and fuel prices, and the need to lower prices as key drivers behind the restructuring.

• The job cuts include 300 positions in Sweden and are part of efforts to streamline decision-making and reduce costs to enable lower prices for budget-conscious consumers
• IKEA is strategically shifting from large suburban warehouse stores to smaller city-centre locations to attract shoppers
• Both Inter IKEA and its largest franchisee Ingka Group replaced CEOs in late 2023 following two years of sales declines, with Ingka also cutting 10% of its office workforce in March

U.K. gilt yields stabilized on Monday after last week's sell-off, as bond markets assess whether potential Prime Minister Andy Burnham would loosen fiscal rules. Political turmoil following Labour's poor local election performance has driven borrowing costs to generational highs, with the 10-year gilt at 5.15% and 30-year at 5.83%. Burnham attempted to reassure investors over the weekend that fiscal policies would remain disciplined if he becomes PM.

• 10-year gilt yields eased to 5.15% while 30-year yields remained elevated at 5.83% after hitting record highs last Friday amid political uncertainty
• Burnham must first win a by-election in Makerfield on June 18 to enter parliament before challenging Starmer, with victory uncertain as Reform UK performed strongly in the seat
• Deutsche Bank analysts warn investors 'are likely to fear higher fiscal spending with Burnham as PM' despite his attempts to walk back comments about being 'in hock to the bond markets'

U.S. Treasury yields rose on Monday as part of a global bond selloff driven by renewed inflation concerns. The 10-year Treasury yield reached 4.62%, its highest level in 15 months, while the 30-year yield hit a two-decade high of 5.14%. The selloff comes amid rising oil prices and ahead of a G7 finance ministers meeting in Paris.

• The 10-year Treasury yield climbed to 4.6173% (up 2+ basis points), marking a 15-month high, while the 30-year yield reached 5.1418%, a 20-year peak
• Global bond markets experienced parallel selloffs, with German 10-year yields rising to 3.18% and Japanese 10-year yields surging 13 basis points to 2.74%
• Oil prices added to inflation fears, with Brent crude rising 1.8% to $111.16 per barrel and WTI futures climbing over 2% to $107.56, linked to Middle East conflict concerns

Hancock Prospecting, owned by Australia's richest person Gina Rinehart, has shifted its $3.3 billion U.S. portfolio toward defense, gold, and rare-earths stocks in 2025. The company made a $133 million portfolio shift in March, adding major defense contractors and a gold producer. This strategic reallocation reflects a move away from some commodities while maintaining significant positions in tech ETFs and rare earths.

• Added five major defense stocks (CrowdStrike, L3Harris, Lockheed, Northrop Grumman, and RTX) plus gold producer Newmont in a $133 million March reallocation
• Acquired a 6.3% stake in Rare Earths Americas and boosted Hudbay Minerals copper holdings by 10%, while exiting Chilean lithium producer SQM entirely
• Core holdings remain Invesco's QQQ Trust tech ETF and MP Materials rare earths producer, which together comprise 47% of the portfolio

China has agreed to address U.S. concerns about rare earth shortages caused by Beijing's export controls, according to a White House factsheet from a recent summit. The controls were introduced in April 2025 in retaliation for President Trump's Liberation Day tariffs and have particularly restricted specialty rare earths like yttrium and scandium used in defense, aerospace, and chipmaking.

• China will address supply chain shortages of critical rare earths including yttrium, scandium, neodymium, and indium, and ease export restrictions on rare earth processing equipment and technology
• China refines over 90% of the world's rare earths and has dominated the industry for decades, with its expertise and technology tightly guarded from foreign companies
• The agreement follows a previous October deal in which China agreed to allow shipments to flow freely, though shortages of certain specialty rare earths have persisted

Following a Trump-Xi summit in Beijing, the White House announced China will purchase $17 billion in U.S. agricultural products annually through 2028 and address American access to rare earths. The two sides released differing readouts, with the U.S. emphasizing agricultural and rare earth commitments while China focused on tariff reductions and broader trade issues.

• China committed to buying $17 billion in U.S. agricultural goods yearly through 2028, exceeding previous October 2025 commitments, though China's official statement did not specify amounts or mention soybeans directly
• The U.S. readout highlighted China addressing rare earth shortages (yttrium, scandium, neodymium, indium) - critical for smartphones, cars, and weapons - while China's statement made no mention of rare earths
• China agreed to purchase 200 Boeing airplanes and emphasized tariff reductions in its readout, while the U.S. did not mention tariff cuts in its statement