Market Report.
⚔️ The 10-week war in the Middle East has reached a deadlock after President Trump rejected Iran’s counterproposal, calling it “totally unacceptable.” Iran has responded with defiance, vowing never to “bow” to the enemy.
❌ The Failed Counterproposal:
📜 Iran demands war reparations, full sovereignty over the Strait of Hormuz, an end to sanctions, and the release of frozen assets. Iran refused to dismantle its nuclear facilities. Instead, it offered to dilute or move its enriched uranium to a third country—but only on the condition that it be returned if the U.S. exits the deal again.
🛑 Washington demands a 20-year moratorium on uranium enrichment and the total dismantling of Iran’s nuclear program.
⚠️ The Iranian military warned of “miscalculations” by adversaries, threatening to take the conflict into unanticipated areas.
🇮🇱 Israel’s Stance: PM Netanyahu stated the war is “not over,” citing Iran’s refusal to surrender its nuclear stockpile or stop supporting regional proxies.
🗞️ According to The Atlantic, the current conflict with Iran represents a decisive and irreparable strategic defeat. The U.S. is facing a “checkmate” scenario where every available move leads to further disaster. Despite 37 days of devastating U.S. and Israeli airstrikes that killed Iranian leaders and destroyed military assets, the regime did not collapse or offer a single concession.
🚨 On March 18, Iran proved it could retaliate effectively by striking Qatar’s gas facilities, causing years of damage. This forced Trump into a moratorium and a ceasefire without gaining anything in return.
🧭 Iran now effectively controls the Strait of Hormuz. The Atlantic argues the “status quo ante” (freedom of navigation) is gone. Iran can now “tax” global trade or selectively block nations, giving them more immediate power than a nuclear weapon ever could. Gulf Arab states, realizing the American security umbrella is broken, will be forced to “go begging to Tehran” to protect their economies.
🤔 Trump is reportedly considering “declaring victory and walking away” because the alternatives are worse: a full-scale ground invasion/occupation or an economic catastrophe with oil hitting $150–$200 a barrel.
🔁 However, the Israeli Prime Minister seems to have a completely different view of the situation.
🎯 Netanyahu is publicly signaling that any deal that leaves Iranian infrastructure intact is a failure.
📺 In a “60 Minutes” interview, Prime Minister Netanyahu made it clear that despite the ceasefire talks, Israel does not consider the conflict resolved. Netanyahu said that Trump had told him he wanted to go into Iran and seize the uranium reserves – nuclear powder – from the nuclear facilities that Trump has allegedly already destroyed on two occasions since 2025.
🗣️ When asked how to handle Iran’s remaining enriched uranium, Netanyahu’s response was blunt: “You go in, and you take it out.” According to Netanyahu, if there is a deal, why shouldn’t they go in and seize the nuclear fuel? The reporter asked him during the interview, “And if there is no deal?”, to which he replied, “Well, in that case, we are not going to discuss our military plans here”.
🌾 A developing food crisis?
⚠️ Iran war has moved beyond a military or energy conflict; it has become a structural break in the global food supply chain.
🧾 According to Zerohedge Blog, while the world is focused on oil prices, a slow-motion catastrophe is unfolding in the agricultural sector. Because the spring planting window in the Northern Hemisphere is closing, the failure to deliver fertilizer now will result in empty shelves and skyrocketing prices by autumn.
⛴️ One-third of the world’s globally traded nitrogen fertilizer passes through the Strait of Hormuz.
🚜 With the Strait blocked by Iran, farmers in the Northern Hemisphere are missing the critical “application window” (which ends in June). A missed window means a lost harvest, not just a delayed one.
📉 The International Grains Council estimates a drop of 53 million tons in global wheat and grain output—a loss larger than Ukraine’s entire annual export volume. In the U.S., spring wheat planting is projected to be at its lowest level since 1919.
💸 70% of U.S. farmers report they cannot afford the fertilizer they need this year. Farm diesel prices have surged 46% since February.
🌍 In Africa, the situation is described as a “de facto global auction” where the poorest nations are being outbid for remaining supplies, leading to predicted mass hunger.
🌾 High fuel costs and fertilizer shortages are forcing Asian farmers to reduce planting. Combined with the El Niño effect, global rice supplies—a staple for billions—are under “critical threat.”
⏳ Even if the Strait of Hormuz were to reopen immediately, experts warn it would take weeks for ships to arrive and months for the global supply chain to normalize. The damage to the 2026 harvest is already “locked in.”
🤝 Trump and Xi Jinping meeting: While the headlines focus on the Iran war, the Beijing meeting is about the fundamental realignment of global power.
📌 Context: Trump’s “Liberation Day” tariffs in April 2025 failed because the U.S. lacked substitutes for Chinese components. China’s retaliatory rare-earth export controls forced Trump into a negotiating posture. This temporary truce has seen Trump ease chip-export controls and discourage Taiwan’s leadership from provocative moves, all to secure Chinese purchases of U.S. agricultural products and jets.
⏳ China may have used this tradewar to slow down U.S. technological constraints while China stockpiles food, fuel, and commodities. But Trump is buying time as well, to fix U.S. supply chain weaknesses (rare earths, minerals) and building a military muscle (a $1.5 trillion defense budget) while avoiding a two-front war.
🧠 A technology war is also underway. The development of cutting-edge AI models (like Anthropic’s Mythos) that can exploit cyber vulnerabilities has made the “tech war” far less forgiving.
🤝 The U.S. is pressing China to use its “strategic partnership” with Tehran to force the reopening of the Strait. But the summit may only produce a vague language on de-escalation—rather than a definitive breakthrough, as China is wary of appearing to cave to U.S. pressure.
🎯 The primary focus of President Trump’s visit to Beijing—the first by a U.S. president since 2017—is expected to shift from trade disputes (tariffs and rare earths) to the war in Iran.
🕊️ The Iran war is likely to take center stage. Following China’s recent hosting of Iran’s foreign minister, there are high hopes that the summit could broker a peace deal. While this has buoyed stock markets and lowered oil prices, it leaves less room for resolving economic friction.
👥 Unlike previous high-profile visits, the U.S. delegation of CEOs is expected to be significantly smaller (potentially halved from an original list of 24). The U.S. government declined China’s offer for industry-specific meetings to avoid the appearance of American businesses being “too close” to Beijing.
✈️ CEOs from Boeing (aiming for a major aircraft order) and Citigroup have confirmed their participation.
🌏 Treasury Secretary Bessent departs the U.S. on Monday, May 11, beginning a multi-country Asian economic diplomacy tour. This trip represents the final preparatory round of high-level economic talks before the Trump-Xi leaders’ summit scheduled for Beijing, demonstrating Treasury’s central role in shaping trade and economic policy outcomes at the presidential level.
🤝 Bessent meets Japanese Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama on Tuesday, May 12, in Tokyo focusing on strengthening U.S.-Japan economic partnership. Discussions prioritize trade relationships, supply chain resilience, investment screening mechanisms, and economic security—longstanding U.S. priorities repeatedly emphasized in bilateral summits under the current administration.
🔗 Tokyo meetings aim to align U.S. and Japanese economic/security policy on investment screening and supply‑chain resilience, reinforcing a bilateral front on technology controls and market access ahead of talks with China.
📍 Seoul’s selection as the U.S.-China meeting venue is strategically significant, offering neutral territory for last-minute technical discussions before leaders convene in Beijing. This arrangement allows negotiators to resolve outstanding issues and finalize talking points in a third-country setting, reducing pressure and enabling face-saving compromises before presidential-level engagement occurs.
⏰ This week marks the end of Jerome Powell’s term at the Fed.
🏛️ Although Powell stepped down as ‘chair’ on 15 May 2026, he announced that he would continue to serve as a ‘governor’ until 2028. Trump’s nominee, Kevin Warsh, is set to take charge of a deeply divided situation.
🔒 The fact that Powell remains on the board means he will work under Trump’s watchful eye and indirectly control the Fed’s potential decisions.
🎯 Strategic objective: to prevent Trump from immediately appointing a figure fully aligned with the White House to fill the vacancy on the board. Trump cannot have total control over the board’s voting.
📈 If Trump fails to secure a quick victory in Iran, inflation will spiral out of control and Powell’s presence on the board will prevent Trump from using the ‘printing press’ to cover the costs of the war.
Market View.
📈 US futures are at record highs despite the fragile ceasefire balance between the United States and Iran. E‑mini S&P 500 futures are currently at 7,410 points, just shy of their record highs. Similarly, Nasdaq 100 futures stand at 29,315 points.
💱 The US Dollar Index (DXY) continues to trade in a zig‑zag pattern around the 98.00 area, leaving forex markets confused and rangebound. EUR/USD shows some bullish patterns that could push it towards the 1.19 area, but it is once again below 1.18, trading at 1.1765.
📉 In Europe, futures opened without much optimism, at levels similar to Friday’s closing after the declines. DAX 40 futures are trading around 24,333.30 points and Euro Stoxx 50 futures at 5,890 points, showing clear pullbacks and divergence versus the US markets.
🛢️ The oil market has risen again, with spot Brent crude above $104.50 per barrel.
🥇 Gold futures have retreated relative to last week’s close and are trading around $4,685 per ounce.
₿ Finally, Bitcoin remains relatively strong, trading at $80,850.
