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Russia is deeply alarmed about US plans to deploy thousands of additional troops to NATO's eastern flank member Poland, slamming reports out of Washington as unacceptable and portending an escalation in the Ukraine war.

Russian Foreign Ministry spokeswoman Maria Zakharova said at a press briefing on Thursday that sending additional American soldiers to Poland "would result in escalation of tension across Europe" and that Moscow would be forced to take "retaliatory measures".

Given that some 5,000 troops are being moved there from Germany, she did acknowledge that reducing America's troop presense in Europe would overall be "rational, justified, and long-overdue" step toward stabilizing what she called an "imbalanced" security situation created by NATO and Western policies.

Weeks ago, the White House began threatening a significant and historic force reduction from Germany, following Berlin officials' repeat criticisms of the US-Israeli war against Iran. This was initially presented in media reports as part of a broader drawdown from Europe, but now it appears US forces are just being shifted around, and with 5,000 to be placed closer to Russia.

But these thousands more troops in Poland could induce Russia to respond with "military-technical measures." Zakharova in perhaps the most provocative part of her remarks warned that NATO is pushing the continent toward a "suicidal" conflict.

In total, some 10,000 US service members are stationed in Poland, on a regular rotation, and the new Washington deployment would see thousands more added to this - from among the 80,000 deployed across Europe.

Poland shares a border with Russia’s Kaliningrad Region, setting off further concerns about targeting and drone activity: 

The deployment of additional US military forces to Poland could lead to a "qualitative escalation" of tensions between Russia and the West and force Moscow to take retaliatory measures, Russian Foreign Ministry spokeswoman Maria Zakharova said on Thursday.

Zakharova also said that the number of drone attacks on Russian territory from the direction of Europe and Northern European states was increasing.

Moscow has expressed concern that Ukrainian drones could be using Baltic or other countries' airspace to launch attacks on targets inside Russia, an assertion rejected by Kyiv and the three Baltic countries.

Warsaw has hit back, with Foreign minister Maciej Wewiór having told the Polish news agency PAP that allied troops in Poland were "a necessary reinforcement of NATO's eastern flank" as a result of Russia's aggression in Ukraine, and given the Kremlin's "escalatory rhetoric" towards the alliance.

Wewiór additionally said the "real source of escalation and tensions in Europe" remains Moscow's "unlawful and aggressive military actions" – and not legitimate measures taken by NATO countries to defend their populations and borders.

Iran's Tasnim reports Friday that the US-Iran Memorandum of Understanding (MOU) is not yet finalized, and that Thursday's flurry of Western media headlines about an agreement finally being reached were inaccurate.

"The text is not finalized yet and the account in Western media is not precise," a fresh statement indicates. Official confirmation will be announced if it does get to the point of being finalized, Tasnim notes. The report cited an Iranian official to say that "the text of the possible memorandum of understanding has had changes over the past few days."

The warring sides are attempting to lock in a 60-day extended ceasefire, during which time they will get back to the table - and that's when finer details like how to address Iran's stockpile of highly enriched uranium will be dealt with. It is now day 91, and according to the latest Friday:

Iranian Parliament Speaker and top negotiator Ghalibaf says: "We have no trust in guarantees or words."

Late Thursday, US Vice President J.D. Vance indicated that President Trump has not approved, at a moment Washington is insisting the nuclear issue be more front and center as part of the MOU.

However, the Iranians have consistently said their nuclear program is not up for negotiation toward ending the war - but that it is something that can be talked about once the conflict closes.

According to a summary of the latest on the stalled MOU from an Al Jazeera correspondent: 

Diplomatic efforts to preserve the ceasefire between the United States and Iran have continued behind the scenes, with officials signaling progress towards a framework that could open the door to formal negotiations after weeks of conflict and disruption across the Gulf and beyond.

Despite the optimism, questions remain over the timing and scope of any agreement.

Iranian media reports suggested discussions are continuing and that key details have yet to be finalized, while both sides continue to navigate sensitive issues, including Iran’s nuclear program and security in the Gulf.

More from Iran's chief negotiator in a Friday update:

What has become clear is that US and international media reports have consistently proven premature, too out front, thinly sourced, and ultimately inaccurate in their generally optimistic claims of a deal being 'finalized' or else 'imminent'.

In the meantime, Iran's ongoing threats of an escalated, protracted war happen to be very clear:

The Revolutionary Guards said any renewed conflict would spread “far beyond the region,” threatening “crushing blows” and “utter ruin” in places opponents “cannot even imagine.”

The warnings come after a war that saw Iran target US bases, Israeli cities and critical infrastructure in Gulf Arab states, while effectively shutting shipping through the Strait of Hormuz and triggering a global energy shock.

The Islamic Republic has also been touting new "tools" to use against its enemies, per CNN:

Last week, Iranian Foreign Minister Abbas Araghchi warned that any future retaliation would “feature many more surprises,” while Iran’s military threatened to open “new fronts” using “new tools.” Mohammad Bagher Ghalibaf, Iran’s top negotiator, said the armed forces had used the ceasefire period to rebuild their capabilities “at the highest level.”

Some pundits fear that such references to "new fronts" could mean either the closure of the Bab al-Mandeb Strait in the Red Sea, or even the possibility of missiles reaching Europe.

Umud Shokri, an energy strategist at George Mason University, has explained in a statement, "A simultaneous crisis in Bab al-Mandeb and the Strait of Hormuz would be far more serious, potentially affecting both Red Sea trade and Persian Gulf energy flows, which would raise oil prices, freight rates, and inflationary pressure worldwide."

One of the newest and most surprising elements of the Iran peace draft deal is a proposed investment fund for Iran — reportedly $300 billion.

Iran originally framed this as reparations for war damage (which it estimates at $300B–$1T). The U.S. side is rebranding it as an… pic.twitter.com/zdrgCiacfH

— Clash Report (@clashreport) May 29, 2026

Still, the Trump administration is pressing for a deal which would make its Iran gambit look like 'victory' - something which finally reopens energy transit points and sees the removal of highly enriched uranium from Iran. Tehran leaders, however, don't appear in the mood to allow Washington to have its cake and eat it too.

*  *  *

More latest Iran developments via Newsquawk:

• Many points regarding the Iranian nuclear file have been resolved; Iran has agreed to international oversight of its nuclear facilities to prevent their dismantling, Al Arabiya reported citing sources. Iran wants to transfer the enriched uranium to China with a commitment not to deliver it to America.
• Chairman of the Iranian National Security Committee of the Iranian Parliament said there are no plans to transfer enriched uranium out of the country, Asharq reported.
• Iran Deputy for Foreign Policy and International Security Ali Baqeri held separate meetings in Moscow with the Foreign Policy Advisor to Brazil's President and the Secretary General of Egypt's National Security Council.
• IRGC Commander said Iran forces are ready to act on Supreme Leader's order and enemies should not make mistakes as they will get themselves and others into trouble.
• Iran military source said US drone was intercepted near Bushehr in southern Iran, according to Al Jazeera.
• US Vice President Vance said that US President Trump is not yet ready to endorse the Iran agreement, while Vance noted that US and Iran made a lot of progress towards a ceasefire deal, according to AFP. Vance said US and Iran are at odds on uranium enrichment and stockpiles, according to SNN.
• White House Deputy Chief of Staff for Policy Stephen Miller stating in an interview with Fox News that US President Trump is directly involved in negotiations with Iran.
• US President Trump said we completely sank the Iranian Navy and destroyed their air force, did not target all of Iran’s military leadership so that what happened in Iraq would not be repeated.
• US military said Iran's state TV claim that Iranian forces downed a US aircraft near Bushehr is false and no US aircraft was shot down by Iran, with all US air assets are accounted for.
• US VP Vance said US and Iran are exchanging proposals regarding some drafting points including issue of enrichment, adds time is still early to know when an agreement with Iran will be reached and if it will happen at all.
• US Treasury imposes fresh sanctions targeting Iran's military oil sales, according to Reuters. IRNA reported US sanctions 25 individuals, firms and vessels over Iran oil.
• US President Trump said that US has all the cards, Iran has been defeated militarily, according to a Fox interview.
• Al Hadath posted Iranian television reported “the downing of an American fighter jet” in the vicinity of Bushehr, with no American confirmations.
• US official denies what Iranian TV announced about downing any American plane near Bushehr, according to Al Hadath.
• Israel's Channel 12, citing military sources, said "The army recommends to the political leadership intensifying the air and ground strikes in Lebanon".

SpaceX is targeting a valuation of at least $1.8 trillion in its upcoming initial public offering, Bloomberg reported, citing people familiar with the matter. This is below an earlier goal of more than $2 trillion.

In practice, the initial IPO valuation target is a marketing range, not a final number. Therefore, any valuation shifts ahead of the trading day would not be unusual. This suggests advisers are calibrating the deal to what investors are willing to absorb, especially given the massive proposed raise of up to $75 billion.

The target is settling lower after consultations with advisers and investors, the people said, asking not to be identified as the information isn't public.

Details of an IPO, such as size and valuation, are typically adjusted ahead of pricing based on feedback from stakeholders, the people said.

SpaceX is seeking to raise as much as $75 billion, people familiar with the matter have said, which would make it the biggest IPO of all time. -BBG

The May 21 SpaceX S-1 filing revealed that Elon Musk's space company is much more than a reusable-rocket and satellite-internet company. It now encompasses AI services, infrastructure, orbital data centers, and a claimed $28.5 trillion total addressable market.

Earlier this month, Reuters reported that the IPO is set to price on June 11, with a June 12 debut. The stock is expected to list on Nasdaq and Nasdaq Texas under the ticker "SPCX."

Polymarket bets show a 90% chance that SpaceX's market capitalization will be $1.8 trillion on the IPO date.

There was speculation earlier this week of a SpaceX-Tesla merger in 2027. Wedbush Securities' Dan Ives has those odds at 80%.

US equity futures are higher, continuing their slow motion-gamma squeeze into record territory, as traders waited to see whether America and Iran could finally get the peace deal they have already priced in every single day for the past month. As of 8:00am ET, S&P futures are up 0.1%, and poised to rise for the ninth consecutive week, the best streak since 2023; Nasdaq futs also have modest gains. In the pre-market, Mag 7 are mostly lower with AMZN (-1.0%), TSLA (-0.7%), AAPL (-0.6%) the laggards even as evidence of relentless demand for AI-infrastructure stocks was on display as Dell jumped 37% after the legacy computer maker gave a sales outlook that far surpassed analysts’ estimates, fueled by servers designed to run AI workloads. MSCI All Country World Index on track for a second monthly gain, both European and Asian markets were higher overnight. Bond yields are flat at 4.44% and the USD remains unchanged. WTI crude fell $1.46 to $87.44, while Brent traded around $92; base metals are all higher; gold added 0.7%. Economic data slate includes April advance goods trade balance and retail and wholesale inventories (8:30am) and May MNI Chicago PMI (9:45am, several minutes earlier for subscribers). Fed speaker slate includes Daly (7:45am, 12:40pm), Bowman (9:10am) and Paulson (9:15am)

In premarket trading, Mag 7 stocks are mostly lower (Microsoft +0.8%, Nvidia +0.5%, Tesla -0.4%, Apple -0.5%, Meta -0.5%, Amazon -0.7%, Alphabet -0.8%)

• American Eagle shares (AEO) tumbled 11% after the clothing retailer reported total comparable sales for the first quarter that missed the average analyst estimate.
• Autodesk’s (ADSK) falls 7% after its proposed acquisition of MaintainX has been tentatively welcomed by analysts, who see the deal as expensive but representing a strong strategic move.
• Dell Technologies shares (DELL) surge 35% after the Texas-based company raised both its full year revenue and adjusted EPS outlooks on strong demand for its AI-powering servers.
• Elastic (ESTC) is down 5.4% after the software company gave an outlook for adjusted first-quarter earnings that was weaker than expected.
• Gap (GAP) shares fell 15% after the clothing retailer reported its latest earnings with poor performance by the company’s Old Navy brand that weighed on the full-year outlook in an otherwise mixed report.
• Krispy Kreme (DNUT) is up 5% after the doughnut chain’s Director Bernardo Hees acquired $768,718 of stock, according to a filing with the US Securities and Exchange Commission.
• NetApp (NTAP) rallies 19% after the data storage provider reported its latest earnings with a strong print from the company, showing strong growth.
• Nextpower Inc. shares (NXT) rise 11% after it agreed to buy Prevalon Energy, a joint venture between Mitsubishi Power Americas and EES, for up to $365 million in cash and stock.
• PagerDuty shares (PD) are up 13% after the software company reported first-quarter results that beat expectations and raised its full-year forecast for adjusted earnings.
• SentinelOne shares (S) fall 12% after the software company gave a second-quarter revenue forecast that was weaker than expected and announced it would reduce its full-time employees by 8%.
• UiPath shares (PATH) are down 4.6% after the software company reported first-quarter results that analysts are generally positive on, although they want to see greater confirmation of durable growth in annualized recurring revenue.
• Viasat (VSAT) falls 7.2% after the wireless communications firm’s fourth-quarter earnings undershot analysts’ expectations.

In other news, space-related stocks gave back some recent gains after Elon Musk’s SpaceX cut its valuation goal to at least $1.8 trillion, according to people familiar with the matter. AST SpaceMobile Inc. fell 13%, while Rocket Lab Corp. slipped 5.3%. APfizer and Innovent Biologics signed a global agreement to develop cancer drugs, including a $650 million upfront payment and up to $9.85 billion in potential milestones. Costco reported higher-than-expected profit in the latest quarter, showing the club chain continues to gain ground among cautious US shoppers. 

A preliminary deal between Washington and Tehran to extend a ceasefire by 60 days is awaiting signoff from President Donald Trump. Vice President JD Vance told reporters Thursday that the parties are “going back and forth on a couple of language points,” including issues relating to Iran’s nuclear capabilities.

The prospect of a peace deal - the same peace deal the market has priced in every day since April - in the Middle East is easing pressure on oil prices and raising conviction that markets’ worst inflation fears wouldn’t come to pass, even as oil flows remain blocked and inventories are getting drained at a record pace. That confidence comes against a backdrop of an unprecedented artificial intelligence-led rally that has seen US-listed chipmakers surge nearly 70% since the start of April. Dell’s mic-dropping earnings print is being seen as evidence of “the latest perceived dinosaur tech to rediscover a new lease of life as an AI powerhouse, following in the footsteps of Intel, Cisco, Nokia, and Lenovo,” notes Emmanuel Valavanis of Forte Securities. 

“Brent below $90 by the end of next week seems at our reach,” wrote Florian Ielpo, head of macro at Lombard Odier Investment Managers. “It would create a rather supportive environment should it happen, clearly as oil prices have been the source of most macro fears this year.”

With energy prices coming off the boil, investors have begun to dial back expectations of a stagflationary shock for the global economy. Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s too early to conclude that interest rates need to rise, remarks that validated a six-day run of gains in Treasuries through Thursday.

“If a deal is agreed upon, we should see another leg higher in risky assets and lower in rates,” noted Mohit Kumar, chief economist and strategist for Europe at Jefferies. “Positioning suggests that the rates market should see a greater reaction than equities.”

The fact that the market has no clear view on the extent of the consequences of the conflict is a reason for caution, said Guillermo Hernandez Sampere, head of trading at MPPM. “Due to past disappointments, euphoria remains rather subdued,” he said. “Short-term price fluctuations are not yet sufficient to provide lasting stability to oil-dependent stocks.”

Info Tech has led sector gains month-to-date on the back of the AI narrative backed by strong earnings, supportive valuations and momentum. BI quantitative strategists note that since the launch of the Bloomberg AI Index in April 2015, a monthly rebalanced portfolio of high-momentum AI names has delivered a remarkable 41.02% annualized return on 28.69% volatility, equating to a Sharpe ratio of 1.43.

“The market is looking for an excuse to trend higher,” Pooja Malik, partner at Nipun Capital, said in a Bloomberg TV interview. Still, “while the AI rally, both from a fundamental and a sentiment perspective, has a huge amount of momentum, the inflation risk is real. If that results in interest rate hikes, that itself could act as a big break on this whole AI tech positive momentum,” she added.

Tech is likely to remain in the headlines over the weekend and into next week, with Nvidia’s Jensen Huang leading a parade of AI computing leaders in Taiwan for Asia’s biggest technology showcase, Computex. 

In Europe, the Stoxx 600 rose 0.6% to erase losses for the week.  Travel and leisure shares are among the biggest gainers, as Brent crude fell to $93 per barrel.  Thematically, Luxury, Ceasefire, Software and Momentum Short are among the top performing baskets. Germany Unemployment Rate printed 6.3% vs, 6.4% survey and 6.4% prior. German regional CPI released this morning were mostly softer than last month. May Tokyo CPI prints 1.4% vs. 1.6% survey vs. 1.5% prior. Here are the top movers:

• Ocado shares jump as much as 14% as the online food retailer enters a partnership with Asda to develop the supermarket’s online business across the UK with the Ocado Smart Platform
• CTS Eventim shares rise as much as 13%, the most since November 2020, after the events firm reported first-quarter sales and Ebitda that both beat consensus estimates
• Vivendi shares rise as much as 8.4% after a press report strengthened the case of minority shareholders seeking a buyout from Bollore SE, CIC CIB argues in a note
• BAM Groep shares rise as much as 17% to their highest level since 2008, after Oddo BHF double upgraded the stock to outperform on better-than-expected UK profitability and lower risks from legacy projects
• Ceres Power gains as much as 4.9% after Berenberg lifted its price target on the stock, saying the clean-energy technology developer is a beneficiary of the AI and data center boom
• Dottikon Es shares fall as much as 20%, the most on record, after results from the Swiss pharmaceutical ingredients firm that Zuercher Kantonalbank called disappointing at all levels except for cash flows
• Wickes and B&M European shares fall as much as 6.6% and 3.0% respectively as Deutsche Numis analysts cut their recommendation on both to sell on concern about the effect of hotter inflation on lower income consumers and big ticket spending

Earlier in the session, Asian equities rebounded as a tentative US-Iran deal to extend their ceasefire revived appetite for risk assets and caused oil prices to drop. The MSCI AC Asia Pacific Index rose as much as 2.1%, with most stock benchmarks in the region in the green. South Korea’s Kospi gauge led the pack with a gain of 3.6%. A rally in Samsung Electronics and SK Hynix has forced some funds bound by a 10% single-stock cap rule to to reshuffle their portfolios. Meanwhile, Asian computer-related stocks advanced after Dell shares soared in extended trading on raised guidance due to strong demand for its AI-powering servers.

In FX, the Bloomberg Dollar Spot Index up by 0.1% with New Zealand dollar outperforming after central bank comments.

In rates, treasuries narrowly mixed, keeping yields within a basis point of Thursday’s closing levels, with oil at a six-week low after the US and Iran tentatively agreed to extend a ceasefire by 60 days. US 10-year yield near 4.44% as European bond yields edging lower in spite of hotter inflation readings in France, Spain and Italy, with Germany the only outlier. US curve spreads are marginally wider, also within a basis point of Thursday’s close. IG dollar issuance slate empty so far. Almost $7 billion was priced Thursday, taking weekly supply over $40 billion. Borrowers paid about 2bps in new issue concessions on deals that were 3.1 times covered. Early dealer forecasts for June US high-grade supply are in the $130 billion-$135 billion range, versus $109 billion in June 2025. Focal points of US session includes several Fed speakers and potential for buying tied to month-end index rebalancing. 

In commodities, WTI crude oil futures are down 1.9% on optimism the Strait of Hormuz may soon reopen. Gold prices moving higher and back above $4,500/oz.

Economic data slate includes April advance goods trade balance and retail and wholesale inventories (8:30am) and May MNI Chicago PMI (9:45am, several minutes earlier for subscribers). Fed speaker slate includes Daly (7:45am, 12:40pm), Bowman (9:10am) and Paulson (9:15am)

Market Snapshot

Top Overnight News

• Iran and US reach deal to extend ceasefire, pending Trump's approval: RTRS
• Bond market volatility is boosting the case for Japan's central bank to pause the unwinding of its massive debt holdings next fiscal year, which would give Prime Minister Sanae Takaichi some relief amid growing investor concerns about her spending plans. RTRS
• China is targeting billions held offshore in the biggest crackdown in decades, with ramifications for the financial advisers and funds that help manage money overseas. BBG
• Samsung Electronics Co. has begun shipping samples of the industry’s most advanced memory to customers, taking an early lead in a race to supply the essential components for AI accelerators made by the likes of Nvidia Corp. BBG
• Apollo Global Management Inc. and Blackstone Inc. are working to bring additional investors into a roughly $36 billion debt financing deal to help Anthropic PBC build out its AI infrastructure. BBG
• France’s economy unexpectedly shrank in the first quarter, with households reining in spending as consumer confidence slid. BBG
• Tokyo’s key inflation gauge cooled to the slowest pace in four years, with the consumer price index excluding fresh food rising 1.3% in May from a year earlier. BBG
• Inflation in France, Italy and Spain jumped in May, reinforcing the case for the ECB to raise interest rates in June. BBG
• Americans are saving less as the everyday cost of living rises and wages struggle to keep up. The personal savings rate — defined as the share of income Americans have after taxes and expenses — hit 2.6% in April, according to data from the Bureau of Economic Analysis released on Thursday. That’s down from 3.2% in March, and 5.8% a year prior. CNBC
• Chevron chief executive Mike Wirth has warned oil prices are likely to rise over the next two months as crude inventories continue to decline due to the Iran war. FT
• US State Department designates Brazilian criminal organisations Comando Vermelho and PCC as specially designated global terrorists, effective June 5th.
• Heading into month-end, Goldman estimates $14 billion of US equities to sell from US pensions given the moves in equities and bonds. This expiry is the 12th largest non-quarterly sell estimate on record (since 2000). 

Iran War

• Many points regarding the Iranian nuclear file have been resolved; Iran has agreed to international oversight of its nuclear facilities to prevent their dismantling, Al Arabiya reported citing sources. Iran wants to transfer the enriched uranium to China with a commitment not to deliver it to America.
• Chairman of the Iranian National Security Committee of the Iranian Parliament said there are no plans to transfer enriched uranium out of the country, Asharq reported.
• Iran Deputy for Foreign Policy and International Security Ali Baqeri held separate meetings in Moscow with the Foreign Policy Advisor to Brazil's President and the Secretary General of Egypt's National Security Council.
• IRGC Commander said Iran forces are ready to act on Supreme Leader's order and enemies should not make mistakes as they will get themselves and others into trouble.
• Iran military source said US drone was intercepted near Bushehr in southern Iran, according to Al Jazeera.
• US Vice President Vance said that US President Trump is not yet ready to endorse the Iran agreement, while Vance noted that US and Iran made a lot of progress towards a ceasefire deal, according to AFP. Vance said US and Iran are at odds on uranium enrichment and stockpiles, according to SNN.
• White House Deputy Chief of Staff for Policy Stephen Miller stating in an interview with Fox News that US President Trump is directly involved in negotiations with Iran.
• US President Trump said we completely sank the Iranian Navy and destroyed their air force, did not target all of Iran’s military leadership so that what happened in Iraq would not be repeated.
• US military said Iran's state TV claim that Iranian forces downed a US aircraft near Bushehr is false and no US aircraft was shot down by Iran, with all US air assets are accounted for.
• US VP Vance said US and Iran are exchanging proposals regarding some drafting points including issue of enrichment, adds time is still early to know when an agreement with Iran will be reached and if it will happen at all.
• US Treasury imposes fresh sanctions targeting Iran's military oil sales, according to Reuters. IRNA reported US sanctions 25 individuals, firms and vessels over Iran oil.
• US President Trump said that US has all the cards, Iran has been defeated militarily, according to a Fox interview.
• Al Hadath posted Iranian television reported “the downing of an American fighter jet” in the vicinity of Bushehr, with no American confirmations.
• US official denies what Iranian TV announced about downing any American plane near Bushehr, according to Al Hadath.
• Israel's Channel 12, citing military sources, said "The army recommends to the political leadership intensifying the air and ground strikes in Lebanon".

A more detailed look at global markets courtesy of Newsquawk

APAC stocks headed into month-end on the front foot as the region took impetus from the gains stateside, where the S&P 500 and Nasdaq 100 posted fresh record highs amid reports of a tentative agreement regarding an MOU for a 60-day US-Iran ceasefire extension and to launch negotiations on Iran's nuclear programme, although it still needs approval from US President Trump, while Iranian sources also pushed back and stated it was not finalised. ASX 200 was led higher by outperformance in the mining, materials and resources industries, while the energy and defensive sectors were at the other end of the spectrum as geopolitics and oil moves remained the main catalyst for price action. Nikkei 225 rallied back above the 66,000 level amid lower oil prices and following a slew of data, including softer Tokyo CPI, lower Unemployment, and better-than-expected industrial output & retail sales. Hang Seng and Shanghai Comp were mixed as the mainland lagged and with headwinds from earnings, as automakers were pressured following weak results from XPeng, while sentiment was also not helped by trade frictions, with the EU set to discuss restrictions on Chinese imports.

Top Asian News

• Japanese Chief Cabinet Secretary Kihara said he is extremely concerned about speculative moves in the FX market; won't comment on FX levels and intervention. Government stance is to always take appropriate FX action.
• Japanese Finance Minister Katayama said we'll consider cost risk balance in reference to issuing bonds and to engage in dialogue with market on bond management, while she declines comment on future bond maturities at this time. said:. It's important to have broad bond investor base. Will continue appropriate debt management policies.
• Japanese Finance Minister Katayama said Japan can take decisive action on FX volatility, while she declined to comment on whether intervention has taken place or not.

European bourses (STOXX 600 +0.4%) are firmer across the board, attempting to rebound from recent losses and as markets digest reports that the US and Iran are nearing an agreement to extend the ceasefire. (See the commodities section for details.) From an index standpoint, the CAC 40 (+1%) outperforms in Europe whilst the FTSE 100 (+0.2%) lags vs peers, given its exposure to energy names. European sectors hold a positive bias. The cyclical industries (Consumer Products / Travel & Leisure / Autos) top the sectoral list, whilst the likes of Energy and Utilities hold towards the bottom of the pile. The Energy sector, unsurprisingly, has been dragged down by losses across the underlying oil complex.

Top European News

• Communications between former UK Minister Wes Streeting (potential PM candidate) and Peter Mandelson will be published next week, The Sun reported.

FX

• G10s are mixed against the Dollar. Kiwi leads after hawkish RBNZ speak overnight after the hawkish-leaning RBNZ hold early in the week, while Sterling lags after Cable dipped below its 200DMA.
• The Greenback is a touch firmer in a rebound from hefty losses on Thursday, when the DXY closed 0.6% from highs. (See Commodities on the headline feed). In short, a deal seems near, but uncertainty remains over whether Trump will sign off on the proposal and whether Tehran will formally endorse the reported terms. Aside from US-Iran, eyes are also on tensions between NATO’s Romania and Russia after a drone hit a residential building in Romania's Galati. DXY is firmer by 0.2% within 98.95-99.19 parameters.
• French, Spanish and German state inflation imply cooler German nationwide (due 13:00 BST), and EZ (due Tuesday) prints. French GDP: Final measures softer than expected. Q1 rate was revised into contraction from flat, yearly basis was also revised a touch lower. French HICP: Softer than expected and ticks up from the prior. Spanish HICP: Ticks up a touch on a yearly basis, in line with expectations, the monthly rate falls a touch beneath expectations and previous. German CPI: Implies the nationwide rate (due at 13:00 BST) will cool at a faster rate than expected. Limited moves were seen on the metrics with EUR/USD falling around 15 pips from 08:00BST. ECB pricing for June continues to price a c.89% probability of a 25bps hike.
• Tokyo CPI softened across the board in May, with core CPI slowing to 1.3% Y/Y from 1.5%, below expectations of 1.5%. The downside was largely driven by government subsidies on utilities and education costs. The release marks a fourth consecutive month of Tokyo core inflation running below the BoJ’s 2% target and contrasts with stronger activity data elsewhere in the economy. For the BoJ, the print provides ammunition for doves arguing for patience. Markets continue to expect the bank to raise rates at the June confab, with 18bps, or 71% probability of a 25bps hike. We expect the release of data which could show intervention occurred in April, which is due around 11:00 BST. USD/JPY trades unchanged within a narrow 18-pip 159.20-159.38 range.
• Kiwi is the best G10 performer after hawkish speak from RBNZ officials overnight. Breman (Consensus voter) said she sees ongoing uncertainty around inflation and that, on balance, the OCR is likely to increase. Assistant Governor Silk (Consensus voter) said she did not think interest rates need to increase yet, though she cautioned that the bias is for rate hikes in the coming meetings. As such, following the hawkish speak from non-dissenting members, the bias for July is tightening with markets assigning a 70% probability of such action.

Central Banks

• Fed's Kashkari (voter) said it is now unclear what the future path of monetary policy will be due to the Iran war; it is premature to conclude that the Fed needs to raise rates immediately after the April PCE inflation data. Speaking on PCE data, Kashkari said it makes him pay even more attention to inflation risks.
• Former BoJ Board Member Sakurai said BoJ will likely raise rates in June, Bloomberg reported.
• ECB’s Panetta said medium-term inflation expectations remain firmly anchored to target. For the June rate decision, it is crucial to assess the extent of the pass-through of higher energy prices. The forward-looking picture seems to call for a recalibration of the monetary policy stance. ECB will act in a timely and measured manner to stop the energy shock from turning into persistent inflation. Consumers’ inflation expectations are rising and firms have already started planning price increases.
• BoE Governor Bailey says have to monitor the situation in the Middle East and how it affects the UK economy and inflation very closely and adjust policy as required. Having taken expected cuts off the table for now, we have already tightened policy considerably in response to the shock relative to what had been expected by markets. Uncertainty about the strength of second-round effects means that monetary policy needs to balance the costs of leaning too little against these effects against the costs of responding too much. Tolerating temporarily above-target inflation to provide some support for the real economy is an appropriate way to approach the trade-off. But that tolerance would weaken if signs of second-round effects begin to emerge. Higher inflation expectations are not coming through in wage expectations and settlements. Hope a fall in UK bond market curve will go on but depends on events in the Middle East. Markets "obviously" see pressure on fiscal plans of government from Iran war impact.
• RBNZ Governor Breman said sees ongoing uncertainty around inflation and that on balance, the OCR is likely to increase.
• RBNZ Assistant Governor Silk said did not think interest rates need to increase yet, but inflation pressures are building in the near term, adds looking at high frequency data for July decision, bias is we're going to see rate hikes in coming meetings.
• RBNZ's Gourley said rates likely to rise sooner rather than later, but speed and size of any increase will depend on data.
• PBoC set USD/CNY mid-point at 6.8176 vs exp. 6.7685 (prev. 6.8240).
• Riksbank Financial Stability Report: The war in the Middle East entails risks to financial stability. The financial system has functioned well, but uncertainty is high. Favourable initial position for the Swedish financial system but risks remain. Maintains the CCyB at 2%.

Fixed Income

• A modestly bearish start to the day for fixed income, as we ease modestly off the post-Axios peaks on Thursday and continue to await the assessment of US President Trump on the MOU. Note, a recent dip in energy has provided some modest support.
• USTs at the lower end of a 109-31 to 110-06 band, having faded from Thursday's 110-07+ WTD peak. The docket for the US ahead is primarily waiting for Trump to comment on the MOU situation, and as such USTs may be relatively rangebound until an update occurs. That aside, we look for remarks from various Fed speakers. This morning, Kashkari (2026) said it is unclear what the future path of policy is and, in the context of April's PCE, that it would be premature to conclude they need to tighten immediately.
• Bunds are in line with the above for the most part, but have been moved about a touch by European data for May. At first, the benchmark found itself at a 126.05 trough with downside of just under 15 ticks, having also faded from Thursday's 126.47 best; note, that was a tick shy of Monday's high and the WTD peak. Thereafter, EGBs saw some modest upside on the cooler-than-expected French preliminary inflation print for May. Albeit, the move was only c. 10 ticks in Bunds and OATs, as prices lifted from the prior level. Next up was Spain, which printed as expected at a harmonised level and a touch cooler on the headline Y/Y. Note, the core figure ticked up to 2.9% (prev. 2.8%). Modest two-way action followed the data. Followed by Germany, where the state figures came in cooler than the prior level and have shifted the mainland consensus to a cooler print, vs pre-state forecasts for another 2.9% Y/Y figure. Finally, Italy was hotter than expected for all components aside from the headline Y/Y.
• We await the German nationwide figure at 13:00BST before assessing next week's EZ HICP. As it stands, Bunds are just off a 126.33 high, lifted alongside peers following a bout of energy pressure.
• Gilts started the day unchanged before experiencing some modest pressure in line with the slight overnight bias in peers, moving to an 88.48 trough. Since, BoE's Bailey spoke and his remarks perhaps have a slight dovish skew, as he noted that the BoE removing expected cuts has already "tightened policy considerably" and tolerating temporarily above target inflation to help the economy is an appropriate approach. Albeit, Bailey made clear that such tolerance would erode if "signs of second-round effects begin to emerge".
• Japan sold JPY 2.1tln 2-year JGBs b/c 3.70 (prev. 5.24), average yield 1.369% (prev. 1.407%). Lowest accepted price 100.04 (prev. 99.980). Weighted average price 100.06 (prev. 99.985). Tail in price 0.02 (prev. 0.005).
• Australia sold AUD 1bln 2.75% November 2029 bonds b/c 3.67, avg yield 4.4692%.

Commodities

• The week was marked by a sharp flare-up followed by renewed optimism around diplomacy. Following yesterday’s Axios reports regarding a 60-day MoU framework, Iran’s Tasnim reported that the text of the possible memorandum of understanding between the US and Iran had not been finalised or confirmed. Uncertainty remains over whether Trump will sign off on the proposal and whether Tehran will formally endorse the reported terms. This morning, there were mixed reports regarding the uranium file, in which Iran rebuffed reports that it wants to transfer the enriched uranium to China with a commitment not to deliver it to the US.
• Elsewhere in geopolitics, a Romanian radio station reported that a drone hit a residential building in Romania's Galati, near the border with Ukraine. NATO Secretary General Rutte affirmed "NATO’s absolute solidarity with Romania", and added that "NATO stands ready to defend every inch of Allied territory"; "will continue to enhance our readiness to deter and defend against any threat".
• The crude complex has been choppy this morning, with initial strength earlier in the session now entirely eroded; as it stands, benchmarks are towards session lows. WTI Jul currently trades towards the lower end of a USD 87.17-89.01/bbl range, while Brent Aug sits in a USD 91.28-92.95/bbl. Dutch TTF trades almost 2% firmer north of EUR 47.50/MWh.
• Spot gold continues the post-PCE rebound seen yesterday, with prices modestly firmer intraday above the USD 4,500/oz level in a USD 4,488-4,530/oz range. Spot silver, conversely, is lower with the precious metal towards the bottom of a USD 75.08-76.44/oz range.
• Base metals are mostly but modestly softer as traders look ahead to further geopolitical headlines, with price action rather contained at the time of writing. 3M LME copper trades towards the middle of a narrow USD 13,653.93- 13,748.38/t range.
• Kazakhstan Energy Minister said planned maintenance at the Kashagan oil field (400k bpd) is likely to be delayed until 2027.
• Commerzbank expects copper to rise to USD 14,250/ton by mid-2027 and Brent crude to reach USD 90/bbl by end-September before declining to USD 85/bbl by year-end.

Trade/Tariffs

• EU Commissioners will meet for a "orientation debate", which will cover the investigation of Chinese trade practices and an "overcapacity instrument", Politico reported; two probes re. chemicals are already being considered.
• China will retaliate against EU's overcapacity tool and may probe EU supply chains, according to state-linked Yu Yuantan.

Russia-Ukraine

• Romanian President said the unprecedented nature of the drone incident requires a firm, coordinated response at both the national and international levels; Romania summoned Russia's ambassador.
• European Commission President von der Leyen said the EU is preparing the 21st package of sanctions on Russia. EU will bolster security and deterrence, particularly on its eastern border, while maintaining pressure on Russia.
• Ukraine said that Russia carried out a drone strike on a Turkish vessel overnight.
• Fuel storage facilities in Russia’s Yaroslavl region were hit by drones.
• Romanian radio station reported a drone hit a residential building in Romania's Galati, close to the border with Ukraine.
• Currently no plans to have an extra NATO North Atlantic Council, Free Radio's Jozwiak reported.
• NATO Secretary General Rutte affirms "NATO’s absolute solidarity with Romania"; adds "NATO stands ready to defend every inch of Allied territory"; "will continue to enhance our readiness to deter and defend against any threat".
• EU Foreign Policy Chief Kallas said Moscow cannot be allowed to breach European airspace with impunity following the drone incident in Romania.

US Event Calendar

• 8:30 am: Apr P Wholesale Inventories MoM, est. 0.8%, prior 1.3%
• 9:45 am: May MNI Chicago PMI, est. 50.3, prior 49.2

Central Bank Speakers

• 12:00 am: Fed’s Mary Daly Speaks at Reagan National Economic Forum
• 2:00 am: Fed’s Kashkari Speaks in Moderated Event in S. Korea
• 6:50 am: Fed’s Schmid Speaks in Reykjavik
• 7:45 am: Fed’s Daly Speaks in Fox Business Interview
• 9:10 am: Fed Supervision Vice Chair Bowman Speaks in Reykjavik
• 9:15 am: Fed’s Paulson Speaks on Economic Outlook
• 12:40 pm: Fed’s Daly Speaks at Reagan National Economic Forum

DB's Jim Reid concludes the overnight wrap

As we go to press this morning, markets have continued to rally amidst widespread reports that the US and Iran are on the verge of a 60-day ceasefire extension that would reopen the Strait of Hormuz. So that’s led to mounting optimism about an end to the conflict, with Brent crude oil falling -0.62% yesterday to a one-month low of $93.71/bbl. Moreover, that momentum has continued overnight, with Brent down another -1.40% to $92.40/bbl.

With oil prices coming down, that’s meant investors have started to price out the more stagflationary outcomes for the global economy, with a clear rally across multiple asset classes. In fact, the positivity saw the S&P 500 (+0.58%) hit another record yesterday, advancing for a 6th consecutive session, with futures up another +0.05% this morning. Similarly for bonds, the 10yr Treasury yield (-3.5bps) posted a 6th consecutive decline to 4.45%, and this morning they’re down another -1.2bps as well. So even before the formal confirmation of any deal, there’s already been a strong reaction in markets.

That momentum has continued in Asia this morning, where most of the major equity indices have risen. Indeed, the Nikkei (+2.61%) and the KOSPI (+3.17%) are both on track for a new record, whilst the Hang Seng (+1.11%) has also posted a solid advance. There’s been a bit more weakness in mainland China however, where the CSI 300 (+0.06%) is only up slightly, whilst the Shanghai Comp (-0.37%) has fallen back. But generally the mood has remained positive, with a further boost from the latest data from Japan overnight. In particular, the Tokyo CPI print for May was softer than expected, with headline inflation unexpectedly slowing to +1.4% (vs. +1.6% expected), whilst core-core inflation fell to +1.6% (vs. +1.8% expected).

The initial catalyst for this latest rally was an Axios report, which said a deal had been reached on a 60-day memorandum of understanding to extend the ceasefire, with negotiations also starting over Iran’s nuclear program. According to the US officials cited in the article, they said the deal terms were “mostly agreed as of Tuesday”, but that it still needed President Trump’s approval. And the report also said the memorandum would say that shipping through the Strait of Hormuz would be “unrestricted”.

Later in the day, a similar message was reported by other outlets. For instance, Bloomberg reported that the US and Iran had reached a “tentative deal” on a 60-day ceasefire extension, with further talks on Iran’s nuclear program. Meanwhile, Vice President JD Vance said that although they were “not there yet” on a deal, the US was “getting very close”, which further cemented the optimism. Clearly the details will be important, but US Treasury Secretary Bessent said that Trump’s three “red lines” for a deal are for Iran to open the Strait of Hormuz, turn over its enriched uranium and end its nuclear program. And Bessent also posted earlier in the day that the US would “not tolerate any effort to impose a tolling system in the Strait of Hormuz.”

Those headlines helped to drive a sharp move lower for oil yesterday. So Brent crude pared back its earlier gains to close -0.62% lower, hitting a one-month low of $93.71/bbl, with further declines overnight to $92.40/bbl. Indeed, it also means that oil prices are down over -18% over May as a whole, which would make this the biggest monthly decline since March 2020, back when the Covid-19 pandemic began and the world moved into lockdowns. And in turn for bonds and equities, there was growing relief that oil prices were coming down and the more stagflationary scenarios would be avoided.

Whilst the geopolitical headlines provided the main boost to markets yesterday, they got further support after the latest US PCE inflation print was softer than expected, easing concern around the need for rate hikes. The release showed that headline PCE was only up +0.4% in April (vs. +0.5% expected), whilst core PCE was up +0.2% (vs. +0.3% expected). So that led investors to dial back expectations for a Fed rate hike, with the probability of a hike by December down to 59% by the close, having been at 62% the previous day. Fed officials also didn’t sound in a rush to hike either, with NY Fed President Williams saying that monetary policy “is right where we want it to be”. Admittedly, there was discussion of a hike, with St Louis Fed President Musalem acknowledging there “there is a scenario where the economy might require a rate increase”, but that was still conditional.

Ultimately, the combination of that downside inflation surprise and hopes for a US-Iran deal meant US Treasuries put in another strong performance yesterday. So the 10yr yield (-3.6bps) fell back to 4.45%, posting a 6th consecutive decline for the first time in over a year, and they’re on track for a 7th decline this morning. In addition, there was further downside pressure on yields after some of the US growth data was a bit weaker than expected. For instance, the weekly initial jobless claims rose to 215k in the week ending May 23 (vs. 211k expected). And if we look further back, the second GDP estimate for Q1 showed that growth was weaker than previously thought earlier this year, only running at an annualised +1.6% (vs. +2.0% before).

US equities also put in a solid performance, with the S&P 500 (+0.58%) at another record thanks to the geopolitical headlines and more dovish rates pricing. Moreover, the index is now up +10% YTD for the first time, and there were fresh records for the NASDAQ (+0.91%) and the small-cap Russell 2000 (+0.57%) as well. But for European equities there was a much weaker performance, with the tech outperformance unable to prevent the STOXX 600 (-0.49%) falling to a one-week low.

Otherwise in Europe, the easing inflation risk meant that sovereign bonds continued to rally. UK gilts saw the biggest outperformance, continuing their pattern of seeing the biggest moves in either direction since the Iran conflict began. So the 10yr gilt yield (-4.4bps) fell to a one-month low of 4.81% by the close. And it was a similar story across the rest of Europe, with yields on 10yr bunds (-2.5bps), OATs (-2.8bps) and BTPs (-2.4bps) falling back as well.

Those bond moves came as investors also dialled back the prospect of rapid ECB hikes this year. For example, the amount of hikes priced by the December meeting was down to 55bps, down -2.5bps on the previous day. Interestingly though, the accounts from the ECB’s last meeting in April were published yesterday, which said that “A number of members noted that the decision was a close call and that they would not have opposed raising rates at the current meeting had this been on the table.” However, it ultimately said that “all members were willing to rally behind the decision to keep policy rates unchanged”, so long as the communication stressed a commitment to ensuring “that inflation stabilised at the target in the medium term.” Looking forward, markets continue to see an ECB rate hike in June as highly likely, priced as an 89% chance as of yesterday’s close, which would be their first hike since 2023.

Looking at the day ahead, data releases include the flash CPI prints for May from Germany, France and Italy, along with German unemployment for May. In the US, we’ll also get the advance goods trade balance for April. Otherwise, central bank speakers include the Fed’s Kashkari, Schmid, Bowman, Paulson and Daly, the ECB’s Panetta, Radev and Muller, and BoE Governor Bailey.

“We remain vigilant, without giving in to being alarmist,” said French Finance Minister Roland Lescure on social media after the Gallic nation saw its economy unexpectedly shrink at the start of the year.

French gross domestic product fell 0.1% in the three months through March, the first quarterly contraction since the COVID pandemic, raising concerns over its resilience to the fallout from the Iran war.

Statistics office INSEE had initially reported zero growth for the quarter, but a sharper decline in consumer spending than expected was "an unpleasant surprise", said Dorian Roucher, the agency's head of forecasting.

He noted in particular "very bad figures for home renovations: it's rare to see this sector decline so much", Roucher told journalists, with overall construction spending down 1.7 percent.

Consumer spending overall was dented by the surge in fuel prices since the Iran war throttled Gulf oil and gas shipments, falling 0.2 percent after rising 0.3 percent in the fourth quarter of last year.

Business investment fell 0.4%.

Trade made a negative contribution as exports dropped 3.5%.

"The recession risk is fairly high," said Mathieu Plane, director of the French Economic Observatory, calling the GDP reading "worrying".

As Bloomberg reports, the revision follows a series of indicators suggesting the euro area’s second-largest economy is increasingly hobbled by rising oil prices since the conflict in the Middle East erupted in late February.

Consumer confidence has dropped to the lowest in more than three years, business activity slumped in May and firms are increasingly planning to raise prices.

A separate report Friday from Insee showed household spending in April fell 0.5%.

FinMin Lescure claimed that the sluggishness at the start of the year was partly due to uncertainty over a delayed budget that had made businesses and households hesitant to invest.

However, INSEE's Roucher said that "the most likely scenario at this time is not a new GDP decrease", though he cautioned that "we can expect the shock to spread" throughout the economy.

France awaits Friday a sovereign credit review from Standard & Poor's, which cut its rating to A+ last October on risks that government spending would remain high.

Authored by Michael Snyder via The Economic Collapse blog,

Our economy is being transformed at a faster pace than we have ever experienced before. Thanks to giant leaps in the field of artificial intelligence, human labor is not as valuable as it once was. All over the world, millions of human workers are being replaced and that trend is only going to accelerate. For those that have already retired or are on the verge of retirement, this isn’t that big of a deal. But for younger workers, this is absolutely terrifying. There is no loyalty in corporate America today. The moment that AI can do your job more efficiently than you can, you could be out the door. This is already happening at some of the biggest companies in the entire country. Good paying jobs are evaporating all around us, and as a result the gap between the wealthy and the rest of us is absolutely exploding.

I knew that the employment marketplace was changing really fast, but the results of a brand new survey that was just released still completely shocked me.

According to that survey, 99 percent of corporate executives are planning AI-related job cuts within the next 2 years…

A new study from consulting firm Mercer finds that virtually every employer is planning to cut jobs due to the technology (2). The 2026 Global Talent Trends report spoke with 825 C-suite leaders, along with 1,650 HR leaders, and a jaw-dropping 99% of the executives surveyed said they expect AI to lead to at least some headcount reduction in the next two years.

Nearly as many (98%) said they are also planning organization design changes in that same time period.

Meanwhile, just 32% of the CEOs surveyed said they believed the workforce can combine both human and machine worker capabilities in an optimal manner, despite just under two-thirds saying they felt that redesigning work to incorporate automation will drive the greatest return on investment.

If your job does not require much thinking or creativity, your job is potentially in danger.

Just look at what is happening at Meta. 1,400 highly paid workers in Washington state are about to get the axe…

Meta’s artificial intelligence overhaul is now hitting one of the country’s largest tech corridors, with the Facebook parent company preparing to cut nearly 1,400 workers across Washington state.

New filings submitted to Washington state officials show Meta will begin terminating employees in Seattle, Bellevue, Redmond and remote positions starting July 22 as the company restructures operations around AI initiatives.

The filings provide one of the clearest looks yet at how Meta’s broader workforce overhaul is affecting employees on the ground after the company announced plans last week to eliminate roughly 10% of its workforce while shifting thousands of workers into AI-focused roles.

Sadly, it isn’t just workers in Washington state that will be affected by the “artificial intelligence overhaul” that they have planned.

Overall, Meta is letting approximately 8,000 workers go in this latest round of layoffs…

Welcome to another day of corporate America hemorrhaging engineers and other white-collar workers with insurmountable student debt as AI adoption accelerates. This era will likely be remembered in history as the great “white-collar purge,” and the response will be continued hatred of data centers.

We’ve been covering for weeks that today is D-Day for Meta Platforms employees, who have finally learned their employment fate at the company that owns Facebook and Instagram.

Bloomberg reports that the new round of layoffs affects roughly 8,000 roles globally, with engineering and product teams expected to be at the center of the cuts as CEO Mark Zuckerberg reduces labor in favor of GPUs.

In this environment, it doesn’t matter how hard you work or how much you have sacrificed for the company.

If those at the top think that they can make more money by squeezing you out, you will be gone.

PayPal is making plenty of money, but they are apparently looking at cutting one-fifth of their entire workforce…

PayPal is reportedly weighing cuts of up to 20% of its workforce as the payments giant ramps up cost-cutting efforts under new leadership.

The potential layoffs come as PayPal faces mounting pressure on profitability despite continued revenue growth.

Who is going to step up to replace the six figure jobs that are being lost?

Needless to say, the truth is that most of the good jobs that are disappearing are never going to be replaced, and that is just going to make the gap between the rich and the poor even worse.

Today we are living in a K-shaped economy, and even the Federal Reserve is admitting that this has resulted in “a remarkable increase in food insecurity”…

The so-called K-shaped economy is now linked to “a remarkable increase in food insecurity,” according to a new blog post by the Federal Reserve Bank of New York.

Large segments of the population are facing high levels of financial strain, according to a post published on Wednesday, based on data from the Survey of Consumer Expectations.

Among this group, lower- and middle-income households have been hardest hit by prolonged inflation. A greater share of their spending is allocated to goods that have seen prices soar since the pandemic, such as housing, food and utilities, causing them to cut back on groceries, the researchers found.

In this environment, tens of millions of Americans are skipping meals on a regular basis because they simply do not have enough money for groceries.

So if you always have plenty of food to eat, you should count your blessings.

In general, those over the age of 45 are doing fairly well.

But those that are age 45 or younger control just 11 percent of the nation’s wealth…

To paraphrase the late jazzman Mose Allison, young Americans ain’t got nothing in the world these days.

Americans ages 45 and under control only 11% of the nation’s wealth, according to household data from the Federal Reserve.

In other words, nine-tenths of America’s assets belong to the older half of America. People ages 45 and over make up about 42% of the nation’s population, and about 54% of the adults.

I was stunned when I saw those numbers.

There is a reason why Americans have never felt as bad about the U.S. economy as they do right now.

Mass layoffs are being conducted all over the country and the cost of virtually everything just keeps going up.

Thanks to the crisis in the Middle East, the average price of a gallon of gasoline in the United States has now reached $4.46…

Now, gasoline prices are also dragging down the lower prong of the K. The national average gasoline price reached $4.46 a gallon as of Wednesday, up about 40% from a year ago, according to AAA.

If the crisis in the Middle East is not resolved soon, things will get a lot worse.

And that is really bad news for people like 57-year-old Kris Massey that are barely scraping by each month…

Kris Massey stood at a jeweler’s counter last month, hoping to sell a couple of her grandmother’s gifted pieces to possibly cover some bills.

Even though Massey, a 57-year-old nurse practitioner, makes six figures a year, her financial situation has grown untenable. Years of fast-rising prices and a recent monthslong bout of unemployment had taken their toll.

She worked two jobs from 2012 to 2023, but a second job is not an option after an extensive back surgery. Her retirement was drained when she was out of work.

“I’m just trying to hang on,” she told CNN.

Can you imagine selling off your prize possessions just so that you can make it through another month?

This is the reality that we live in now.

For 51-year-old Bill Brantner, any extra spending at all has become a thing of the past…

For Brantner, there’s absolutely no wiggle room now.

There’s no discretionary spending – no movies, no restaurants, no driving around town, no new clothes, no new shoes; his coffee is whatever’s available in the breakroom; his bumper is strapped on with Gorilla Tape.

“If I sign a lease again, and they raise my rent again, I can’t do it; if they raise my insurance premiums again, I can’t do it,” Brantner said. “They have squeezed every drop of blood that there is to be squeezed out of this stone.”

Come next May, if his rent is hiked for a fifth consecutive year, he might have to resort to living in his car outside of Colorado Springs city limits, where sleeping in a vehicle isn’t illegal.

The U.S. economy has been in a state of decline for decades.

For a long time, our leaders tried to hide what was happening, but now the truth is becoming apparent to everyone.

Those at the very top of the economic pyramid are still thriving, but virtually everyone else is really struggling.

The middle class is being systematically dismantled and the ranks of the poor are rapidly growing.

I have been warning about all of this since the early days of the Obama administration, and now a time of reckoning is at hand.

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Just about two months ago, JPMorgan did the math on "How Long Before The World Hits Crude Oil Operational Minimum." The punchline was that while the market can hold hundreds of millions of barrels, it would still become fragile once working stocks fell too low. Like blood pressure in the human body, the issue is circulation. 

Then, approximately 4 weeks later, the bank followed up this analysis with some more math, explaining "Why Hormuz Will Reopen By September... One Way Or Another." The bank calculated that of the 8.4 billion barrels in global oil inventories at the start of 2026, only 0.8 billion barrels were realistically available without pushing the system into operational stress. Long story short (and the long story can be found here), OECD commercial stocks could fall to operational stress levels by June, and then hit the global operational floor by September if the Strait of Hormuz remains closed, assuming demand destruction stabilized at 5.5 mbd (with oil prices paradoxically dropping since the last JPM article, demand destruction has actually slowed). 

Meanwhile, the biggest paradox during this period when the blocked Hormuz Strait meant that roughly 10 million barrels of oil wasn't reaching its intended destination each day, was that instead of prices going sharply higher to destroy demand, oil prices were actually dropping after peaking in late March and then again a month later, in effect incentivizing more demand. This prompted JPMorgan to published that "Something Is Off" With The Global Oil Math...

... and Goldman to follow up a few weeks later by observing that in May, global oil inventories plunged by a record 8.7 million barrels per day, with Hormuz still largely blocked.

And yet, oil prices are sharply lower in May, in no small part due to the daily market jawboning manipulation by various official and unofficial sources, who signal that an Iran deal is imminent... any minute now. 

Only it isn't, and while the market may prefer to shove its head in the sand, the biggest names in the room are no longer keeping quiet.

Today, Chevron CEO Mike Wirth warned oil prices are likely to rise over the next two months as already near record low crude inventories continue to decline due to the Iran war. 

“The buffers and the shock absorbers are being steadily drawn down, and the ability for the market to absorb this imbalance is drastically diminished today versus where we started,” he said at a Bernstein conference on Thursday.

“Over the next few weeks, we’re likely to see those pressures flow through more directly to physical prices and there’s more upwards pressure that I would expect as we get into June and certainly into July.”

Wirth’s comments follow a 10% fall in oil prices over the past week amid optimism that the US and Iran can agree a deal to end the three-month-long conflict that has closed the Strait of Hormuz, a narrow waterway through which a fifth of crude flows. They highlight growing concern among economists that the war’s impact on energy prices will continue to be felt for many months after any deal is agreed to end it... not that that moment is even remotely close. The conflict has removed 12mn-13mn barrels of oil a day from global markets.

The comments by Wirth echo a growing chorus of warnings from other oil executives, including the head of the United Arab Emirates state oil group Adnoc, who cautioned last week that full oil flows through the Strait of Hormuz were unlikely to return before next year even if the conflict is resolved.

“It will take at least four months to get back to 80% of pre-conflict flows, and full flows will not return before the first or even second quarter of 2027,” Adnoc chief executive Sultan al-Jaber said during an Atlantic Council event on May 21.

Echoing JPMorgan's observations, Wirth said oil prices had not risen as much as people had expected due to higher-than-normal stocks of crude prior to the outbreak of the war, releases from the US Strategic Petroleum Reserve and flows of sanctioned oil from Iran, Russia and Venezuela. But he said these stocks were now running low. One wildcard is the rapid, yet very stealthy, drain of Chinese stocks, both commercial and strategic. With 1.4 billion in China's SPR, the moment of reckoning could be delayed yet again if Beijing decides to open the floodgates. 

Wirth also said the energy crisis would force governments to focus more on “an insurance policy” by building up oil reserves to insulate them from shocks such as the pandemic and wars in Iran and between Russia and Ukraine. “The likelihood that another shock is around the corner is something policymakers are going to have to bear in mind . . . how long they want to roll the dice before they refill inventories is a question that I think we’re going to see policymakers have to grapple with.”

“That’s going to put more demand into the market, which is going to put a bit of additional tension on the price,” he said.

The Chevron boss concluded by warning that damage to oil and gas infrastructure in the Middle East would cost tens of billions of dollars to repair, putting additional upwards pressure on prices. “If this goes on for long, it tips us into an economic slowdown or a recession, you might have an offset on the demand side, which you can’t rule out.”

But if Chevron was pessimistic, the company's biggest domestic competitor, Exxon, was downright apocalyptic. Speaking at the same Bernstein conference, Exxon SVP Neil Chapman had some truly horrifying remarks, certainly not something that Donald Trump would like to hear. We present them below.

Commercial inventories of crude oil, of liquids, think petroleum, gasoline, diesel, jet fuel, they've all run down. And running down those inventories has mitigated or offset, supplemented by the release of strategic petroleum reserves, which most of the Western countries have done. All of that has mitigated the impact. You can model this. We've modeled it. I think a lot of people in the industry have modeled it.

Nothing new here: we've discussed all this in the previous three months. But it is what he said next that was a moment of shocking insight into just how bad things are about to get: 

We're approaching unheard of inventory levels. I mean, really, really low levels. You can debate whether that's going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you'll see price shoot up. A model would say dated Brent will shoot up. Once you get to that really low inventory level, up to $150, $160.

The models would tell you that. And then what happens is when the price gets to a certain level, demand destruction brings it back into balance. Prices go so high, it becomes unaffordable. And that's what happens. And so we're at that level right now.

Next, Chapman connected all the abovementioned dots: "I think crude being in this sort of $90 to $110 for the last whatever it is, six weeks, has really been mitigated by running down inventories. It can't last forever. So we'll see what happens.... predicting this and the exact timing, it's always a challenge. But that's the way we see the picture."

Putting all of the above in simple terms: by playing a jawboning game of cat and mouse with oil markets, the Trump administration is only draining stocks, both commercial and strategic, faster as consumers can afford to buy more, and they do. However, the supply sid of the pipeline remains blocked.

And until the war in Iran truly ends, and the Strait returns to normal transit, global inventories will continue to drain by about 10-14 million per day. Which is why when the operational floor is reached in less than three months, the resulting parabolic move in oil will be just as memorable as when it plunged deep into negative territory in April 2020 when traders were paying others any amount asked, to take physical oil off their hands. It will be just like that... only in reverse.

Later this summer, the nuclear-powered USS Gerald R. Ford will export electricity from its two A1B reactors directly to Naval Station Norfolk, powering the largest naval base in the world from a $13 billion supercarrier sitting at the pier.

Acting Secretary of the Navy Hung Cao provided the news during a May 14 House Armed Services Committee hearing on the FY2027 budget. “This summer, Naval Station Norfolk in Virginia is going to be powered from an aircraft carrier,” he said plainly. “We’re going to export the energy from the aircraft carrier to the base.” 

A Navy spokesperson later confirmed the initial test will happen later this year as part of a broader push for “firm, baseload power” and mission assurance at installations.

The Ford just returned to Norfolk after a record 326-day deployment. Its A1B reactors built by Bechtel and BWXT deliver roughly 25% more energy and operational availability than the older A4W plants on Nimitz-class carriers, with fewer sailors needed to run them. The test will show whether a docked supercarrier can serve as a floating backup generator during grid outages, attacks, or disasters. The idea is also being pitched that the power could also be utilized in drought-stricken areas for potable water production. 

But this isn’t the world’s first floating nuclear power play. The concept dates back to the 70s when a Westinghouse-Tenneco joint venture proposed mass-producing 1,200 MW plants on massive concrete barges off the U.S. East Coast. The idea died in regulatory and political quicksand, but only in the US. 

Russia actually built and operates one. The Akademik Lomonosov, with two KLT-40S reactors delivering about 70 MWe plus district heat, has been supplying the remote Arctic town of Pevek in Chukotka since 2019. It replaced the aging Bilibino nuclear plant and a coal facility. 

Rosatom has pushed follow-on designs using RITM-200M reactors for mining projects like Baimskaya in the far north, with some fabrication shifting to Chinese shipyards. 

Europe remains mostly conceptual. Denmark’s Copenhagen Atomics is reviewing reactor tech for Norwegian firm Ocean-Power’s floating barge ideas, and UK-based Core Power has partnered with Samsung on molten-salt concepts. No steel in the water yet. 

At the same hearing, Chief of Naval Operations Adm. Daryl Caudle floated something bigger. He called for a Navy reactor pilot program modeled on the Army’s Janus initiative, which has already shortlisted nine domestic bases and is using DIU milestone contracts for microreactors targeted by 2028, and the Air Force’s ANPI program, which selected companies including Antares Nuclear and Radiant, aiming for first power around 2030. 

“While the Army may be tapped to be the overall lead,” Caudle said, “I see no world in which the Navy is not going to be part of that discussion… But we need to get a pilot established and a target date and get one going.”