Market Report.
🇺🇸 U.S. President Donald Trump on Truth Social confirmed he authorized a U.S. military strike on Iran originally scheduled for Tuesday, May 20, 2026, but then postponed it. The decision came after direct personal requests from the Emir of Qatar, the Crown Prince of Saudi Arabia, and the President of the United Arab Emirates.
🤝 The three Gulf leaders told Trump that serious negotiations are now taking place and a deal is within reach that would prevent Iran from obtaining nuclear weapons. Trump cited his respect for them as allies and instructed the Pentagon to hold off on the attack.
🗣️ Speaking to reporters, Trump described the delay as possibly lasting only two or three days. He said the pause could be forever if a deal is reached, but for now it is a short window for diplomacy.
❗ No Immediate Iranian Reaction: Iran has historically used such pauses to claim diplomatic victories while continuing enrichment. No official response was reported in the initial hours.
🇺🇸🇮🇱 Intense Joint U.S.-Israeli Preparations Underway: The New York Times reports that the United States and Israel are engaged in the largest-scale joint wartime readiness measures since the April ceasefire. The preparations point to a possible resumption of strikes on Iran as early as this week.
📝 Trump administration advisers have drafted plans for renewed military action if nuclear talks collapse. Options include escalated bombing of military centers, infrastructure, and remaining nuclear sites. A ground operation to secure enriched uranium stockpiles has also been discussed, though military officials flag it as high risk for casualties.
⚓ More than 50,000 U.S. troops, two aircraft carriers, destroyers, and warplanes remain positioned in the region for rapid escalation.
🏛️ Senator Graham Calls for Renewed Strikes on Iran: Senator Lindsey Graham urged President Trump to abandon the current diplomatic approach and launch a new round of military strikes. He argued that the prolonged stalemate benefits Iran while inflicting economic pain on the United States through high gas prices and the blocked Strait of Hormuz.
🗳️ Graham brushed aside concerns that Trump’s handling of the economy could cost Republicans the midterm elections. He stated he would risk losing his own job if it meant preventing Iran from obtaining a nuclear weapon.
⛽ Shortages Could Hit Europe Within Weeks:
📉 Even in optimistic scenarios, global oil stockpiles are not expected to recover until December 2027. The supply deficit is deepening and the lag between reopening the Strait and actual fuel delivery means the crunch will persist for months.
📦 Societe Generale analysts calculate that even if the Strait of Hormuz reopened by early June, the sequence of tanker transit, discharge, refining, and distribution creates a minimum 52-day lag before physical relief arrives.
📆 A late June reopening would delay normalization until September and embed a deeper inventory deficit. An even longer closure could drive oil toward 150 dollars per barrel and keep prices elevated for the rest of the year.
🇪🇺 Merkel Criticizes EU for Underusing Diplomacy.
🎙️ Former German Chancellor Angela Merkel said the European Union is not making sufficient use of its diplomatic potential to help end Russia’s war in Ukraine. She spoke during a live interview with German broadcaster WDR at the Re:Publica digital conference in Berlin.
🌐 Merkel insisted that it is not enough for U.S. President Trump to maintain contact with Russia. She argued that Europe must also be someone in the diplomatic arena and urged the bloc to work toward a unified position on talks with Moscow, noting that diplomacy was essential even during the Cold War.
🕊️ Her comments come as the EU discusses appointing a special mediator for Russia-Ukraine peace efforts. Merkel recalled her failed push in October 2021 for a new EU diplomatic format with Moscow, which collapsed.
🗨️ They are only sincere when they leave office: German Chancellor Friedrich Merz responded that a single EU negotiator is not currently planned, though talks continue in smaller formats. He cautioned against raising false hopes until Russia shows a genuine willingness to negotiate.
💼 Treasury Extends Russian Oil Waiver:
📜 The U.S. Treasury Department issued a new 30-day general license allowing countries to purchase and offload Russian crude oil that was already loaded onto tankers before a specified cutoff date. The waiver does not lift the broader sanctions regime but carves out a narrow time-limited exception for stranded cargoes at sea.
🔁 This is the third consecutive short-term renewal since March 2026. Previous waivers were issued after initial pledges not to extend them, reflecting repeated administration reversals to manage the oil price spike triggered by the Iran war.
🎯 Treasury Secretary Scott Bessent said the move aims to stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries. The action frees up hundreds of millions of barrels of Russian supply that would otherwise be blocked, helping to ease global tightness with prices above 110 dollars per barrel.
⚠️ The extension happens even as U.S. intelligence reports allege Russian entities provided targeting data and technical support for Iranian strikes on U.S. and allied assets. Critics argue the waiver hands Moscow extra revenue that could indirectly bolster its partnership with Tehran.
📣 The announcement landed the same day Trump paused a planned military strike on Iran at the request of Gulf leaders to allow negotiations.
🇬🇧 Meanwhile in UK:
🌾 A Telegraph report warns that British cereals farms are facing a projected net loss of around 70,000 pounds on the 2027 crop due to surging energy-linked input costs driven by the Middle East conflict.
💷 The Central Association of Agricultural Valuers estimates that a typical 500-acre commercial cereals farm will pay an extra 25,000 pounds in fertiliser costs alone for the 2027 harvest. When combined with sharply higher red diesel prices, the full loss is expected to reach 70,000 pounds if farmers plant their entire area.
📈 The Iran war has pushed global oil prices above 110 dollars per barrel. In the UK, red diesel prices have roughly doubled since the conflict began, rising from around 78 pence per litre to 136 pence per litre, directly squeezing farm operating costs.
🔗 Fertiliser Supply Chains Disrupted: Nitrogen-based fertilisers are made using natural gas, and the Gulf region accounts for roughly one third of globally traded fertiliser volumes. The war has caused price spikes, with some products jumping from 350 pounds to 550 pounds per tonne, the second major shock in four years.
👨🌾 The National Farmers Union president highlighted the fertiliser price jumps and urged the government to act to protect food security.
📊 Markets will save us from war.
📉 Yves Smith of Naked Capitalism has consistently argued that financial markets are one of the few effective checks on Trump’s Iran policy. She sees bond yields, Treasury selloffs, and equity investor behavior as the real constraint when political and institutional guardrails prove weak.
📜 The thesis was first laid out clearly in June 2025. Smith noted that Trump interprets calm markets as evidence that attacking Iran is not overly hazardous. She contrasted this with the 2018-2019 tariff episode, when a sharp Treasury selloff in longer-dated bonds is widely believed to have forced Trump to back down on China tariffs.
📊 In her May 2026 analysis, Smith frames rising bond market jitters as a primary force now limiting Trump’s room for escalation. She argues that higher interest rates and falling bond prices are creating economic pressure that will drag on stocks and broader activity, making renewed major strikes far costlier.
🩺 Trump is trying to keep investors anaesthetized with optimistic spin about negotiations.
🇦🇺 Australia Orders Chinese Investors to Sell Rare Earths Stake. Whasigton’s orders?
🏛️ Treasurer Jim Chalmers directed six China-linked shareholders to fully divest from Northern Minerals Ltd, an Australian rare earths developer. The entities, registered in mainland China, Hong Kong, and the British Virgin Islands, were given 14 days to sell their roughly 18 percent combined holding.
🤝 The move directly supports the 2025 United States-Australia framework to secure supply chains for critical minerals and rare earths. That agreement commits both countries to strengthen powers that review and deter asset sales on national security grounds, with Northern Minerals cited as a priority project.
🕵️ Northern Minerals self-reported to regulators after detecting further attempts by Chinese-linked investors to build influence, including a failed bid by a major holder to install a new company chair.The divestment order aims to prevent creeping control over a strategically vital asset.
🌏 China currently controls about 90 percent of global heavy rare earth processing. Chalmers stated the orders were made to protect the national interest and that Australia operates a robust foreign investment framework. He warned of additional steps if necessary, while China called for fair treatment of its investors.
🏢 Corporate world news: AI takes over the labor market.
✂️ 8,000 Job Cuts Begin This Week: Meta is starting its latest round of layoffs with about 8,000 employees, or 10 percent of the workforce, set to lose their jobs. The company also scrapped plans to fill 6,000 open roles, marking another major reduction.
🤖 Meta is ramping up capital expenditures for artificial intelligence to as high as 145 billion dollars in 2026, even as it slashes jobs. Finance chief Susan Li said executives do not know what the optimal size of the company will be, signalling more uncertainty.
⚙️ The brutal reality across tech is that jobs are being replaced by AI, and shareholders are rewarding the companies making those cuts. Nearly 110,000 tech layoffs have already occurred in 2026, on pace to approach the peak of 2023.
🧾 Meta introduced an internal tool that collects data from employee actions, including mouse movements and keystrokes, to train AI models for digital agents. Workers described it as dystopian and fear privacy leaks, leading to a petition demanding leadership shut the project down.
📉 Meta shares are down about 7 percent this year and are underperforming most megacap peers.
Market View.
📉 Bearish patterns are beginning to emerge in US equities, which are showing their first lower highs. Mini S&P 500 futures have retreated towards 7,400 points and are currently bouncing slightly at 7,414 points. Nasdaq‑100 futures have pulled back towards 29,000 points and are holding there at present.
🛢️ The oil market experienced some volatility yesterday amid renewed threats to strike Iran. Brent crude approached $113 per barrel before easing back; it is currently stabilising around $110.40 per barrel.
💵 The DXY dollar index has eased since Monday’s early session but remains above 99 points, trading at 99.15. This is keeping EUR/USD below 1.1660, at about 1.1635 currently.
📈 European markets showed improvement during yesterday’s session after a weak open: DAX 40 futures have stabilised above 24,350 points, and Eurostoxx 50 futures recovered 5,850 points and are trading above that level now.
🥇 Gold futures appear to have stabilised above $4,550 an ounce, awaiting further developments in the US–Iran situation.
₿ Bitcoin’s decline continues despite a very optimistic start to May; new bearish patterns are forming as it attempts to stabilise around $77,000.
