Stocks and Indices

• US Futures Pull Back: Wall Street futures are retreating sharply as renewed US-Iran tensions and pre-PCE inflation anxieties cap recent optimism. The Nasdaq leads the decline ( US100 : -1.05%), followed by the Russell 2000 ( US2000 : -0.8%), S&P 500 ( US500 : -0.55%), and Dow Jones ( US30 : -0.3%).
• Europe Follows Suit: European markets are tracking lower, with Eurostoxx 50 futures down ( EU50 : -0.95%).
• Asian Markets Retreat: Escalating Middle East conflict halted hopes for a peace deal, dragging down Asian equities. Japan’s Nikkei eased after yesterday’s record session ( JP225 : -1.6%), while South Korea’s KOSPI fell 1.1%, Australia’s ASX 200 dropped 1.1% ( AU200.cash : -1%), and Hong Kong’s Hang Seng slid nearly 2% ( HK.cash : -2.3%).

🪖 Geopolitics

• Direct US-Iran Clashes: The IRGC launched a retaliatory strike against an unspecified US air base in the Middle East, calling it a “serious warning” after a US dawn attack destroyed four Iranian drones and a ground control station near Bandar Abbas Airport. Meanwhile, Kuwait reported intercepting unidentified “hostile” drones and missiles.
• Strait of Hormuz Sanctions: The US Treasury added Iran’s newly formed Persian Gulf Strait Authority (PGSA) to its sanctions list. The US accuses the IRGC-led body—established on May 5 to enforce maritime rules—of attempting to extort commercial vessels navigating the critical shipping lane.

🦅 Macroeconomics & Fed Speak

• Stagflationary Shock for Asia: Chicago Fed President Austan Goolsbee warned that prolonged energy inflation from the Iran war has dealt a “stagflationary shock” to oil-importing Asian nations. He also noted that skyrocketing stock wealth from the AI boom risks prematurely overheating the US economy.
• Fed Prioritizes Inflation: Minneapolis Fed President Neel Kashkari emphasized that combating inflation remains the central bank’s top priority. Pointing to a resilient labor market, he warned that rising energy and fertilizer costs could unanchor consumer expectations, potentially forcing sharper policy action.
• Australian CAPEX Surges: Australia’s private capital expenditure rose 6.5% to its highest level since December 2014. The growth was driven by an 18.1% surge in equipment, plant, and machinery—offsetting a 3.8% drop in buildings—further stoking domestic inflation fears.

💵 Forex

• Greenback Rebounds on Safe-Haven Inflows: The US dollar Index jumped aggressively ( USDIDX : +0.3%) to its highest level since early April as geopolitical uncertainty reignited safe-haven demand.
• Major Pairs Under Pressure: The deteriorating risk sentiment dragged equally on the Euro ( EURUSD : -0.3% to 1.159), British Pound ( GBPUSD : -0.3%), Swiss Franc ( USDCHF : -0.3%), Aussie ( AUDUSD : -0.3%) and Kiwi ( NZDUSD : -0.3%). Meanwhile, USDJPY remained stable.

🛢️ Commodities

• Crude Rebounds on Escalation: Brent and WTI crude oil futures surged 2.5% in response to the Iranian attack on the US military base, with Brent ( OIL ) climbing back to 95 USD per barrel. Conversely, natural gas ( NATGAS ) futures ticked down 0.45%.
• Precious Metals Sell-Off: Gold and silver extended their sharp declines, heavily pressured by the surging US dollar. GOLD tumbled 1.55% to 4,840 USD/oz, while SILVER dipped 2.4% to 72.80 USD/oz.

🪙 Crypto & Digital Assets

• Crypto Deep in the Red: Digital assets faced steep selling pressure. BITCOIN pulled back 2.05% to 72,970 USD, while ETHEREUM slid 2.15% to 1,977 USD, marking its lowest level since late March.
• Polymarket Insider Trading Charges: In legal news, the DOJ charged Google software engineer Michele Spagnuolo with fraud and money laundering. Operating under the alias “AlphaRaccoon,” Spagnuolo allegedly used confidential internal Google search data to net 1.2 million USD in rigged Polymarket wagers on 2025’s most-Googled trends.

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