Market Report.
📰 On the weekend, U.S. President Donald Trump sent conflicting messages about a possible agreement with Iran, describing the negotiations as “constructive” but also sharing photos of American troops attacking Iranian ships.
⚖️ According to Trump, as the battle continues, Washington will not be pressured to reach an agreement at a time when energy supplies are in danger of entering the “red zone” this summer and Gulf countries’ aspirations for AI are hampered.
🛢️ As investors became more optimistic about a peace agreement between the two countries, oil prices increased on Tuesday as a result of U.S. military strikes in southern Iran, which the military characterized as defensive measures.
💬 Trump wrote yesterday on Truh Social: “Negotiations with the Islamic Republic of Iran are proceeding nicely! It will only be a Great Deal for all or, no Deal at all — Back to the Battlefront and shooting, but bigger and stronger than ever before — And nobody wants that!”
🤝 He then continued at length, stating that any agreement with Iran should require (or strongly encourage) multiple Muslim-majority countries—including Saudi Arabia, Qatar, Pakistan, Türkiye, Egypt, Jordan, and others—to simultaneously join or expand the Abraham Accords.
🇸🇦 Trump said he asked Saudi Arabia, Qatar, Pakistan, Turkey, Egypt, and Jordan to join the Abraham Accords en masse to normalize relations with Israel. He framed this demand as part of his effort to negotiate an agreement to end the war with Iran.
🚫 Pakistan rejected the proposal, with a source familiar with the matter stating that Pakistan is under no compulsion to adhere to any such demand. The source said the Iran ceasefire diplomacy and the Abraham Accords push are not interlinked and cannot be made so.
🌍 Other Muslim Nations Unlikely to Accept
None of the other countries named by Trump has publicly reacted, and a positive response was seen as unlikely.
🤨 Public mistrust of Israel remains high across Muslim nations due to the scale of its military offensive in Gaza.
🔐 For Saudi Arabia, recognizing Israel is a deeply sensitive national security issue. The kingdom’s longstanding position is that it will not sign the Accords unless there is an agreement on a roadmap to Palestinian statehood.
🗣️ International Crisis Group’s Ali Vaez said Trump is trying to sell an Iran deal as an Abraham Accords sequel, trading one fantasy for another. Senator Lindsey Graham embraced the linkage, arguing it would create regional integration and a powerhouse for economic opportunity.
📜 The Abraham accords are a series of U.S.-brokered bilateral normalization agreements between Israel and several Arab and Muslim-majority countries, establishing full diplomatic, economic, and people-to-people relations signed in 2020 during the first Trump mandate.
🎯 The aim of the agreements is mutual recognition between Israel and the Arab states, irrespective of the conflict between Israel and Palestine. They also seek to foster trade cooperation between the signatories and mutual support on regional issues.
🧩 In other words, the Abraham Accords are the glue with which Trump seeks to hold together a region that has become riddled with political and diplomatic rifts following the attack on Iran. The US’s Arab partners have been harmed by the actions of Israel and the US, and Trump wants to ensure that there is a common framework between them all to sustain them in the future.
🗞️ But Israel Hayom Criticizes Emerging US-Iran Framework: A sharply critical analysis in the Israeli newspaper Israel Hayom argues that the preliminary framework being negotiated heavily favors Iran and leaves Israel exposed. It states that the only concrete outcome so far is the mutual reopening of the Strait of Hormuz, allowing stuck ships to exit and Iranian oil tankers to resume exports.
⚠️ According to the report, every other critical matter including Iran’s nuclear program, ballistic missile development, and support for proxy militias is postponed to future negotiations without a set start date. The paper frames this as Iran achieving its core goal of regime survival while the United States achieved none of its stated war aims.
🔒 For Israel, all issues vital to its security such as nuclear breakout capability, missile threats, and Iranian-backed forces on its borders are pushed to an uncertain future with no guarantee that meaningful talks will ever occur.
🚨 Netanyahu Announces Major Escalation Against Hezbollah:
📹 Yesterday, on the evening, Israeli Prime Minister Benjamin Netanyahu declared in a video statement that Israel is at war with Hezbollah and will intensify strikes. He said he had ordered the IDF to press the pedal even harder, intensify blows, increase firepower, and crush them. The announcement came amid continued Hezbollah drone and rocket attacks on Israel, which he cited as violations of the fragile April 2026 ceasefire.
🔁 The escalation was announced on the same day President Trump posted that Iran negotiations were proceeding nicely and pushed for a mass Abraham Accords signing. Netanyahu emphasized that Israel retains the right to act independently on the Lebanese front, even as US-Iran talks advance.
⚠️ Iran has explicitly warned the United States that continued or escalated Israeli strikes on Beirut or its suburbs could derail the broader deal.
🛡️ Netanyahu’s announcement underscores Israel’s determination not to let any US-Iran deal constrain its security actions against Iranian proxies. While the Trump administration portrays the talks as pragmatic progress toward a larger regional settlement, the Lebanese theater is actively heating up.
Economic impact of the conflict:
📈 Inflation is also hitting Japan, following the US and German surges.
🏦 The Bank of Japan’s new core inflation index accelerated to 2.8 percent in April, blowing past the central bank’s 2 percent target. The reading marks an increase from 2.5 percent in March and strengthens the case for an interest rate hike as soon as next month.
🔎 The new index is designed to remove institutional factors such as education costs and energy-related subsidies. This gives a much clearer picture of underlying inflation than the government’s benchmark core consumer price index, which stood at just 1.4 percent in April.
📣 Deputy Governor Signals Rate Hikes Ahead: BOJ Deputy Governor Ryozo Himino stressed that with real interest rates remaining very low, the policy rate is expected to continue rising in line with economic, price, and financial developments. He added that central banks must preserve market confidence in their commitment to rein in inflation. Markets Price 80 Percent Chance of June Hike.
📊 However, the charts show clear upward trends in the USDJPY pair if the resistance levels of 159.35–159.50 are broken.
Corporate News:
📉 A Goldman Sachs report to clients late on Friday said that hedge funds favored technology equities last week, with speculators buying them up at the fastest rate in about three months.
💡 The negative impact of the Iran conflict on the world economy has been avoided by businesses that may gain in any way from advancements in artificial intelligence, especially in the semiconductor and chip industries.
⚠️ Investors are warning that the boom in memory chip stocks may still be subject to the industry’s historic boom and bust cycles, despite arguments that artificial intelligence has changed the dynamics permanently. Fund managers urge caution as the rally gathers steam.
📈 Samsung shares are up 114 percent year to date, while SK Hynix has surged 186 percent. U.S. based Micron Technology and SanDisk have advanced 141 percent and 156 percent respectively in 2026, fueled by insatiable demand for high-bandwidth memory chips used in AI.
🔁 Industry executives argue that AI has upended the traditional cyclicality of the memory sector, where demand fluctuates while supply remains fixed.
🧪 Alphabet’s Google unveiled TurboQuant, a new compression method that could reduce the amount of memory required to run large language models by six times. Such innovations have the potential to dramatically cut demand for AI memory chips and caused a sharp decline in memory stock prices upon its release.
⚙️ Production could increase meaningfully over the next three years, easing the current supply constraints, especially if AI demand growth normalizes.
Market View.
🌟 Optimism continues to drive the market, based on Trump’s promises that they are about to sign a deal with Iran. However, we have already explained all the blind spots in these claims.
📈 S&P 500 futures have climbed to 7,540 points, having set new all-time highs during yesterday’s session. The Nasdaq 100 is in a similar position, currently trading at 29,825 points.
💵 The US Dollar Index (DXY) started the week below last week’s levels but is quickly regaining momentum and is currently trading at 99.15 points. This is bringing fresh declines in pairs such as EUR/USD, which met resistance at 1.1650 and has pulled back to the current 1.1630.
🛢️ Crude oil fell below the 100 barrier for spot Brent, buoyed by optimism, and appeared to find support at 93.25, from where it has risen to $95.80 in recent hours.
🇪🇺 In Europe, futures opened the week strongly. DAX 40 futures approached 25,500 points and are currently trading at 25,405 points. Euro Stoxx 50 futures surpassed 6,150 points but are currently trading at 6,125 points.
💰 Bitcoin, unfortunately, fell below 75,000 $ over the weekend before rebounding to the current 76,670 $.
