General Market News

European stocks are expected to open lower on Thursday, with major indices projected to fall 0.6% to 1.1%, as investors assess mixed signals from U.S.-Iran peace negotiations amid ongoing military tensions in the Middle East. Uncertainty stems from conflicting reports about a potential deal and continued U.S. strikes in Iran despite ceasefire discussions.

• U.K. stocks expected to open down 0.9%, Germany down 1.1%, France down 1%, and Italy down 0.6% according to IG data
• U.S. Secretary of State Marco Rubio indicated talks with Iran are 'progressing' while U.S. forces launched fresh strikes in Iran on Wednesday, described as 'defensive' to maintain ceasefire
• Investors await April's U.S. personal consumption expenditure price index at 8:30 a.m. ET, with expectations of 0.5% monthly and 3.8% yearly increase

Foreign investors purchased Japanese stocks for the eighth consecutive week through May 23, investing a net 1.08 trillion yen ($6.77 billion) as the AI boom drove demand for tech-related equities. The sustained inflows reflect growing international interest in Japan's equity market, with foreigners having invested nearly 11.7 trillion yen year-to-date, significantly outpacing last year's 742.1 billion yen for the same period.

• Weekly foreign purchases of 1.08 trillion yen ($6.77 billion) marked a nearly 14% increase from the prior week's 948.4 billion yen
• AI-related stocks led gains, with SoftBank Group surging 17.62% and chip designer Socionext rallying 12.26% following Nvidia's strong revenue forecast
• Foreign investors also bought 1.35 trillion yen of Japanese long-term bonds after the prior week's outflows, attracted by higher yields as the bond selloff eased

Chicago Federal Reserve President Austan Goolsbee stated that energy inflation from the U.S.-Israel war with Iran has proven more persistent than initial forecasts predicted, creating stagflationary pressures particularly for energy-importing Asian economies. Oil prices remain significantly elevated compared to pre-war levels despite recent easing.

• Brent crude traded at $96 per barrel and WTI at $90.21, compared to pre-war levels of $72 and $67.02 respectively, representing substantial sustained increases
• Initial futures market estimates expected energy prices to decline much more than actual levels, indicating forecasting errors on inflation persistence
• Asian economies face an 'old-fashioned stagflationary shock' due to their dependence on energy imports, combining inflation with growth pressures

The U.S. Commodity Futures Trading Commission is seeking to withdraw a $5 million penalty against Gemini Trust Company, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss. The regulator now admits it inappropriately accused Gemini of making false statements, claiming the Biden-era enforcement relied on uncredible whistleblower accounts and that Gemini was actually a fraud victim. The Winklevoss twins each donated $1 million in bitcoin to Trump's 2024 campaign.

• Gemini had settled CFTC charges in January 2025 under the Biden administration, paying $5 million and agreeing to an injunction, but both parties now seek to vacate the settlement citing a shift in crypto enforcement policy under Trump.
• The CFTC and Gemini jointly claim the agency inappropriately leveraged its power by blocking approval for Gemini's prediction market platform (Gemini Titan) while the enforcement action was pending; approval was granted in December 2025.
• According to the joint filing, the CFTC investigation was based on an uncredible whistleblower and ignored that Gemini was the victim of fraud by its former chief operating officer and two customers who received fraudulent rebates.

The Consumer Financial Protection Bureau (CFPB) announced it will relocate approximately 450 employees from regional offices in San Francisco, Atlanta, Chicago, and New York to its Washington headquarters later this year, while ending remote work arrangements. This move is expected to accelerate resignations and further weaken the agency, which the Trump administration has sought to drastically reduce or eliminate since taking office.

• The CFPB has already lost about one-third of its roughly 1,700-person workforce since the administration called for its abolition and froze most agency activities, with the administration now seeking court permission to dismiss about half of remaining workers.
• Starting August 31, all staff located more than 50 miles from headquarters and field employees must report to the new Washington office, with headquarters staff required to work in-office five days a week beginning in July.
• The Trump administration views the CFPB, created by Congress in 2010, as a politicized burden on free enterprise, while Democrats characterize efforts to dismantle it as favoring corporations over consumer protection.

Minneapolis Federal Reserve President Neel Kashkari stated that fighting inflation is his top priority over labor market concerns, as inflation has remained above the Fed's 2% target for over five years while employment remains in 'decent shape.' He warned that prolonged elevated inflation risks unanchoring inflation expectations, which could require more aggressive Fed action.

• Inflation stood at 3.8% in April, with core CPI (excluding food and energy) at 2.8%, well above the Fed's 2% target that has been exceeded for more than five years
• Kashkari emphasized the labor market is currently in 'decent shape,' allowing the Fed to prioritize inflation without immediate employment concerns
• The Fed official warned that if inflation expectations become unanchored and drift higher, the central bank would need to respond 'even more aggressively' to control price increases

Sentiment among UK consumer-facing services businesses dropped to its lowest level since February 2025 in May, according to a Confederation of British Industry survey. Profitability is falling sharply as costs rise faster than prices, forcing firms to cut investment and reduce headcount. Rising inflation is expected to further intensify consumer caution and strain demand.

• Consumer services optimism balance fell to -49 in May from -45 in February, while business services dropped sharply to -46 from -3, marking the lowest since November 2025
• Consumer services profitability declined at the fastest pace since August 2020 as costs outpaced firms' ability to raise prices
• Companies plan to cut capital spending across most categories due to uncertain demand and inadequate returns, with the Bank of England monitoring inflation risks from energy price surges caused by the Iran war

U.S. crude oil inventories declined by 2.8 million barrels in the week ending May 22, marking the sixth consecutive weekly drop, according to American Petroleum Institute data cited by market sources. Gasoline stocks also fell by 3.2 million barrels, while distillate inventories increased by 1.1 million barrels.

• Crude inventories dropped 2.8 million barrels, extending the drawdown streak to six weeks
• Gasoline stocks fell 3.2 million barrels, indicating strong fuel demand
• Distillate inventories rose 1.1 million barrels, countering the declines in crude and gasoline

The White House is reviewing a CFTC proposal to regulate prediction markets like Kalshi and Polymarket, amid a jurisdictional dispute between federal and state authorities. President Trump endorsed the CFTC's exclusive regulatory authority, while former regulator Gary Gensler argues the agency lacks legal authorization under Dodd-Frank to oversee these markets. The conflict may ultimately be decided by the Supreme Court.

• CFTC Chairman scrapped a proposed ban on sports and political betting on prediction platforms on Jan. 29, instead planning to write new regulatory rules for the sector
• Several states are challenging CFTC authority, with New York AG suing Kalshi and Polymarket for allegedly operating illegal gambling, and Minnesota enacting the nation's first state-level prediction market ban
• Former CFTC and SEC Chairman Gary Gensler stated the agency is not authorized under the 2010 Dodd-Frank Act to regulate prediction markets and lacks capacity, arguing states should have regulatory authority instead

The Dow Jones Industrial Average hit a record high on Wednesday, rising 0.37% to 50,650.76, as investors rotated out of semiconductor stocks into defensive sectors like healthcare and consumer discretionary. The S&P 500 and Nasdaq remained nearly flat as the recent AI rally paused, while oil prices fell about 5% to near $88 per barrel amid conflicting reports about Iran's Strait of Hormuz commitments.

• Semiconductor stocks weakened broadly, with the Philadelphia Semiconductor Index retreating from its Tuesday record high; Intel, Qualcomm, and Marvell declined while Micron pulled back from session highs despite remaining above $1 trillion market cap
• US crude oil dropped approximately 5% to near $88/barrel after Iranian state media reported Tehran would restore Strait of Hormuz traffic within one month, though the White House denied the report as 'complete fabrication'
• Investors await Thursday's PCE inflation data (the Fed's preferred measure) for policy clues, while Goldman Sachs raised its 2026 S&P 500 year-end target to 8,000 from 7,600 on continued earnings strength

A new Zillow report identifies the 10 hottest rental markets in the U.S. for summer 2026, with most located in the Northeast and California. These markets face intense competition due to limited housing supply, as the recent construction boom largely bypassed coastal and Northeastern regions despite 2024 recording the highest number of new units built in the past half-century.

• Providence, Rhode Island tops the list with 5% annual rent growth and a 5.1% vacancy rate forecast, while typical rents (ZORI) reach $2,154
• New York City, San Francisco, and San Jose command the highest rents at $3,406, $3,206, and $3,534 respectively, with low vacancy rates between 4.3% and 4.9%
• Chicago shows the strongest rent growth at 5.7% annually, while Milwaukee has the tightest market with just a 3.8% vacancy rate forecast

The Federal Reserve's Inspector General is reviewing the reappointment process for regional Fed bank presidents and their deputies, who serve five-year terms. The inquiry will assess whether the Board of Governors' approval process aligns with Federal Reserve requirements and best practices. Interest in this process has grown amid concerns it could be used to pressure regional policymakers who resist political demands for rate cuts.

• The Fed's board unanimously approved all 11 regional presidents up for reappointment in late 2024, a process that typically sees officials retain their positions
• The 12 regional Fed banks are quasi-private institutions with presidents selected by local private-sector boards, subject to central bank approval
• The review comes as observers fear the reappointment process could be weaponized following President Trump's aggressive pressure campaign against the Fed for interest rate cuts

French utility EDF has postponed the sale of a stake in its Italian subsidiary Edison until 2027 due to ongoing disruptions in liquefied natural gas supplies caused by the Strait of Hormuz crisis. The delay affects EDF's plans to raise cash for nuclear reactor investments, as the Middle East crisis has negatively impacted Edison's business and valuation prospects.

• Edison, Italy's second-largest gas importer, was previously valued at €7 billion to €10 billion ($8-11.6 billion), but the ongoing LNG supply disruptions may significantly affect its valuation
• Edison's Qatar supplier notified the company of cancelled LNG cargoes with force majeure extended to mid-August, impacting a long-term contract for 6.4 billion cubic metres of gas annually
• EDF advisers are revising Edison's business plan to account for LNG disruptions, with potential investor discussions possibly restarting from September 2026

Options traders are placing heavily bearish bets on small-cap stocks ahead of Thursday's U.S. economic data releases, including the PCE inflation index. Put trading activity in the small-cap ETF IWM exceeded 70% of options premium on Wednesday, signaling investor concern about the sector's vulnerability to interest rate movements despite a 40% rally over the past year.

• Put contracts in IWM outnumbered calls nearly 3-to-1, with over 380,000 puts likely bought versus under 270,000 sold, compared to relatively even call/put activity in the S&P 500 ETF (SPY)
• One trader placed an $8 million net bet on a 7% drop in IWM by mid-July, reflecting concerns about small-cap stocks' heightened sensitivity to Treasury yield spikes due to higher percentage of unprofitable companies
• Thursday's economic data slate includes weekly jobless claims, durable goods orders, GDP update, and PCE inflation report, all of which could impact interest rate expectations

PPHE Hotel Group received a £920.9 million ($1.24 billion) takeover proposal from Israel's Fattal Hotel Group at £22 per share, which PPHE considers fair. The offer comes after PPHE launched a strategic review in November, with controlling shareholders holding about 44% of voting rights currently supportive of engagement with Fattal.

• The offer values PPHE at £22 per share, totaling approximately $1.24 billion for the London-listed hospitality real estate firm
• PPHE's controlling shareholders Papouchado and Ivesha, who hold about 44% of voting rights, are engaged in the discussions
• Fattal reserves the right to vary the offer terms, including introducing securities or reducing the £22-per-share price, as negotiations proceed

President Trump's March waiver of the Jones Act, allowing foreign-flagged ships to transport fuel between U.S. ports, has had minimal impact on gasoline prices despite being the broadest suspension in the law's history. During the first two months, only 50 shipments moved 10.1 million barrels total—a fraction of daily U.S. consumption—with high international freight rates limiting cost savings to roughly 1% in California. The waiver was intended to lower fuel prices ahead of midterm elections, but elevated shipping costs and limited vessel availability have constrained its effectiveness.

• California received 60% of waiver shipments (3 million barrels), but this represents only 6% of the state's daily gasoline consumption of 36 million gallons
• Cost savings were minimal: shipping via foreign vessels saved only 6.6 cents per gallon (1% of California's $6.11/gallon price) compared to Jones Act tankers
• An unintended consequence emerged as U.S. tankers began pursuing international routes, with at least one Alaska crude tanker shipping to South Korea for the first time since 2014, potentially tightening domestic vessel availability

US interest rates are rising as markets reprice inflation risks amid resilient economic data and accelerating inflation prints. The Strait of Hormuz closure is contributing to persistent inflation pressures, with import prices rising at their fastest monthly pace in four years. Newly confirmed Fed Chair Kevin Warsh faces a challenging first FOMC meeting as he must balance firming inflation data against his previously accommodative stance.

• Import prices rose at their fastest monthly pace in four years, driven by the prolonged Strait of Hormuz closure with no progress on reopening negotiations
• The Producer Price Index (PPI) increased to 6.4% year-over-year, well above the range that persisted through much of 2023
• Fed Chair Kevin Warsh inherits a divided committee and must navigate between firming inflation data and his prior accommodative tone in his first FOMC meeting

U.S. stocks paused near record highs on May 27, 2026, as investors searched for new catalysts after a strong rally. The cybersecurity sector sold off sharply following disappointing guidance from Zscaler, while oil prices plunged 6% on reports that Iran would reopen the Strait of Hormuz, potentially easing inflation pressures and reshaping Federal Reserve rate expectations.

• Cybersecurity stocks tumbled sector-wide after Zscaler missed forward guidance despite beating earnings, dragging down Palo Alto Networks, CrowdStrike, and the Global X Cybersecurity ETF
• WTI crude oil fell below $89 per barrel (down 6%) on news of Iran reopening the Strait of Hormuz, which could lower inflation and give the Fed room to adjust policy
• Memory chipmakers Micron and SK Hynix both crossed $1 trillion market caps this week on AI infrastructure demand, with analysts citing long-term supply agreements as supporting continued growth

Kevin Warsh was sworn in as Fed Chair at the White House on May 27, 2026, marking only the second time this ceremony occurred there. The first was Alan Greenspan in 1987, two months before the historic market crash. Warsh inherits a challenging stagflationary environment with inflation at 3.8%, unemployment at 4.3%, and the S&P 500 trading at 25 times forward earnings, well above its 10-year average of 19.

• New Fed chairs historically face market volatility, with the S&P 500 declining an average of 12% in the first three months after appointment, though markets typically recover strongly within a year.
• Warsh faces conflicting pressures: President Trump wants rate cuts to support growth, but rising inflation may require the opposite approach, similar to Paul Volcker's rate hikes in 1979.
• Current valuations leave little room for policy mistakes, with the market trading near stretched multiples amid oil price shocks from the Iran war and ongoing supply disruptions.

U.S. stocks rose Wednesday, with the Dow gaining 147 points and the S&P 500 and Nasdaq climbing 0.07% toward record highs, driven by continued AI and semiconductor optimism. Micron Technology surpassed a $1 trillion market cap for the first time after UBS upgraded expectations. Investors are also monitoring Iran diplomatic developments and awaiting Thursday's PCE inflation data ahead of Fed policy decisions.

• Micron Technology exceeded $1 trillion market capitalization as AI infrastructure spending fueled a broader semiconductor rally, with UBS citing AI-linked supply agreements as a key catalyst
• Goldman Sachs raised its S&P 500 year-end target to 8,000 from 7,600, pointing to strong first-quarter earnings growth of approximately 29% year-over-year
• Markets are watching Thursday's PCE inflation release and potential Iran diplomatic resolution, with oil prices falling below $89 per barrel on reports of restored Strait of Hormuz shipping commitments