Market Report.
🇺🇸 President Donald Trump said that Iran has informed the United States it is in a “state of collapse,” adding that Tehran is seeking to have the Strait of Hormuz reopened “as soon as possible” while it works through what he described as a leadership crisis.
⚖️ Trump rejected Iran’s latest peace proposal setting aside nuclear programme discussion until conflict conclusion and shipping disputes resolved, insisting nuclear issues addressed from outset. Rejection directly contradicts Iran’s stance that original February 2026 military campaign reason preventing nuclear-armed Iran cannot be postponed, reflecting fundamental disagreement over negotiation sequencing and core conflict objectives between warring parties despite ceasefire framework.
🏴 Killing of Supreme Leader Ayatollah Ali Khamenei and elevation of wounded son Mojtaba as replacement has empowered hardline Islamic Revolutionary Guard Corps commanders, potentially hardening Tehran’s negotiating stance by concentrating power among military figures rather than traditional clerical arbiters of power.
🕰️ No new Iranian counter-offer or U.S. walk-back reported in last 24 hours with talks remaining at impasse, White House repeating “all options remain on the table” and Iran “will never” allowed nuclear weapon.
🇩🇪 Trump responded to Merz’s criticism:
💬 Trump criticized German Chancellor Friedrich Merz on social media, claiming Merz “doesn’t know what he’s talking about” regarding Iran after Merz questioned U.S. exit strategy, indicating strains between Trump and European allies over war conduct and diplomatic approach, undermining Western coalition unity.
🏁 Unilateral U.S. victory declaration?
🧠 U.S. intelligence agencies analyzing Iran’s likely reaction if President Trump declared unilateral U.S. victory and began withdrawing forces. Earlier intelligence assessments concluded U.S. victory declaration paired with force drawdown would likely be viewed by Iran as Tehran victory, while maintaining heavy U.S. troop presence would instead signal negotiating tactic rather than true conflict end, creating strategic dilemma regarding optimal messaging and force posture.
💸 The price of war, loss of support:
📉 Public opinion polls show war deeply unpopular domestically with only 26% Americans believing military campaign worth costs and 25% believing it enhanced national safety, creating “enormous” White House political pressure regarding midterm election implications and domestic political consequences.
📊 President Trump’s approval rating sank to lowest level of current term at 34%, down from 36% in prior April 15-20 Reuters/Ipsos poll, driven by Americans increasingly disapproving his handling cost-of-living and unpopular Iran war, representing significant erosion from 47% approval when taking office January 2025.
🛒 Only 22% poll respondents approved Trump’s performance on cost-of-living, down from 25% previously, reflecting severe damage from surging gasoline prices following U.S.-Israel February 28 Iran war launch, directly contradicting Trump’s 2024 campaign promises bringing down prices after Biden-era inflation concerns.
🐘 While solid Republican majority 78% still back Trump, 41% party members disapprove his cost-of-living handling, indicating significant internal party concern regarding economic messaging and midterm election vulnerability.
📉 Trump’s economy approval rating at 27% remains well below any reading during 2017-2021 first administration and lower than Biden’s weakest economy rating, demonstrating unprecedented economic approval weakness
🛢️ Division and OPEC breakup?
🇦🇪 The UAE announced it will exit OPEC on May 1, dealing a significant blow to the cartel’s cohesion and coordinating power. As OPEC’s third-largest producer behind Saudi Arabia and Iraq, the UAE’s departure (after nearly six decades of membership since Abu Dhabi joined in 1967) is one of the most consequential defections in the organisation’s history.
📈 The official reason given is strategic: the UAE wants the freedom to pursue its ambitious target of 5 million barrels per day by 2027, unconstrained by OPEC production quotas. Energy Minister Al Mazrouei framed it as a national interest decision following a full production policy review, and carefully denied it reflects frustration with Saudi-led output cuts — insisting he holds the “highest respect” for Riyadh.
🌍 The departure signals deeper discord among Gulf nations, particularly in the context of the Iran war. The conflict has reshaped energy dynamics across the region, and the UAE’s move suggests Gulf producers are increasingly prioritising independent strategies over cartel solidarity in a world where geopolitical and supply disruptions have become the norm.
🚢 Meanwhile, the Strait of Hormuz remains near-paralysed, with only seven ships crossing daily versus a pre-war average of 125–140, and none carrying oil for global markets. At least six Iranian tankers have been forced back by the US naval blockade, keeping global oil supply severely disrupted and reinforcing the energy price shock rippling through the world economy.
🔥 New attacks on oil infrastructure, and not in the Middle East:
🇷🇺 Russian spokesman Peskov claimed Ukrainian drones struck Tuapse refinery oil storage containing export-intended reserves, arguing “Kiev regime” strikes destabilize global energy markets and exacerbate worldwide oil shortage by disrupting international supplies, framing attacks as economically damaging to non-combatants rather than legitimate military targets.
🇺🇦 Ukrainian drone strike occurred overnight April 27-28, 2026, representing third strike on Tuapse facility in April and second within two weeks, targeting Rosneft-owned Black Sea export terminal causing major fire, toxic smoke, resident evacuations, oil spill into Black Sea, and damage to four additional storage tanks.
📰 Major Western outlets including Reuters, BBC, Wall Street Journal, and Guardian reported Peskov’s exact claims about export-intended oil and alleged global market impacts in opening paragraphs.
🌾 Additionally, Ukrainian President Volodymyr Zelensky has accused Israel of permitting what he described as “stolen” Ukrainian grain to enter its ports, alleging that the shipments originated from territories under Russian control. He warned that Kyiv is preparing sanctions against individuals and entities involved in the trade, signaling potential diplomatic friction over the issue.
🌎 Global crisis?
⚠️ Warnings about the global economy are intensifying. After billionaire investor Ray Dalio cautioned that the United States may be entering a period of stagflation, JPMorgan Chase CEO Jamie Dimon has raised concerns about the risk of a potential debt crisis.
💣 Dimon identified a dangerous and growing mix of risk factors: rising geopolitical tensions, elevated oil prices driven by the Iran war, and widening government deficits globally. He cautioned that while each risk might individually recede, an unpredictable confluence of all three simultaneously is what makes the current environment particularly hazardous.
📉 A bond crisis would manifest as a sudden spike in yields and a collapse in market liquidity, investors selling en masse with no buyers, ultimately forcing central banks to step in as buyers of last resort. The 2022 UK gilt crisis, which required emergency Bank of England intervention, was cited as a recent real-world precedent.
🏦 Key developments from the Fed this week and the outlook ahead.
📊 Markets are pricing a 100% probability of no Fed rate change, with cuts not expected until well into 2027. Despite this, Trump continues to loudly demand quick and aggressive rate cuts, setting up a direct clash between the White House and the central bank.
🧭 Powell’s legacy is expected to centre on his staunch defence of Fed independence against relentless White House pressure — particularly notable given that Trump was the one who originally appointed him. His term as chair officially ends May 15, and it remains unclear whether he will stay on as a Fed governor afterward.
⚖️ Powell’s chair term ends May 15 but his Board of Governors term runs until January 2028 — he could legally remain as a voting FOMC member. Trump has threatened to fire Powell if he attempts to remain in any role post-May 15. whether the DoJ investigation closure satisfies Powell’s own stated condition for departure — he said he needed “transparency and finality” before leaving.
🏛️ If Warsh is not confirmed by May 15, Powell has indicated he would serve as pro tem chair of the Board of Governors, as required by law. The White House has signalled it may challenge this arrangement, potentially triggering a constitutional standoff over who controls the world’s most powerful central bank.
🎙️ The FOMC’s June 17 press conference will be the first major public test of any new leadership’s tone and credibility with markets.
📈 The Federal Reserve formally adopted a 2% inflation target in 2012. Measured against that benchmark, the years under Chair Jerome Powell saw the highest average inflation rate, at roughly 3%, followed by Alan Greenspan at about 2.5%. The period under Ben Bernanke came closest to the 2% target on average.
✅ The most market-friendly outcome: Kevin Warsh takes over as chair smoothly, providing clarity on leadership direction. The critical factor here is Senate timing: Senator Tillis has now dropped his opposition following the closure of the DoJ investigation into Powell, clearing a key political obstacle to Warsh’s confirmation. Markets would likely interpret this as a green light for eventual policy loosening, as Warsh is perceived as more open to rate cuts under White House pressure — though he is also a known hawk on inflation.
⚔️ War between NATO and Rusia?
👑 King Charles, invoking NATO’s activation of Article 5 after the September 11 attacks and the shared determination shown through two world wars, the Cold War, and the conflict in Afghanistan, told members of Congress that “that same unyielding resolve is needed for the defense of Ukraine and her most courageous people,” framing support for Kyiv as part of a longstanding transatlantic commitment to collective security.
😄 Additionally, King Charles, addressing President Donald Trump in remarks to Congress, referenced Trump’s past comment that without the United States, Europeans might be “speaking German.” The King responded with a touch of humor, adding: “Dare I say that if it wasn’t for us, you’d be speaking French,” underscoring the long and intertwined military history between the United States and Europe.
🤝 Britain’s King Charles told U.S. Congress UK and U.S. remain staunch allies despite deep divisions over Iran war, speaking at time of significant disagreement between longtime partners, suggesting diplomatic tensions threatening transatlantic relationship despite rhetorical commitment to partnership.
🤖 The corporate world is dissatisfied with open AI.
📰 According to WSJ, this is not an existential crisis, but it is a critical inflection point. OpenAI remains the dominant AI player with billions in annual revenue and a vast private valuation.
📉 OpenAI has missed several internal targets for user growth and revenue in recent months, failing to reach its goal of 1 billion weekly active ChatGPT users by end-2025 and falling short on multiple monthly sales goals in early 2026. Growth has cooled notably after an explosive 2024–2025 run, with subscriber churn higher than expected and rivals Anthropic and Google’s Gemini gaining ground in enterprise and coding markets.
⚠️ CFO Sarah Friar has raised the alarm internally, warning fellow leaders that OpenAI may struggle to meet future computing contracts if revenue growth doesn’t accelerate. She has also expressed reservations about the feasibility of an IPO by year-end — putting her in direct tension with CEO Sam Altman’s aggressive push to lock in ever more computing capacity and proceed with a public listing.
💰 OpenAI has already signed deals worth hundreds of billions with Microsoft, Oracle, Nvidia and others, with some internal projections pointing to as much as $600 billion in infrastructure spending over the next five years — a staggering bet that requires rapid and sustained revenue acceleration to justify.
Market View.
📈 US futures are recovering after yesterday’s pullback, which followed Donald Trump’s rejection of the latest Iranian proposals.
📊 E-mini S&P 500 futures are attempting to reclaim the 7,200 level, currently trading at 7,185, very close to record highs.
💻 Nasdaq 100 futures are in a similar position, trading at 27,292, below recent highs in the 27,535 area.
💵 If the conflict intensifies, the dollar tends to strengthen. The US dollar index (DXY) is rising again, approaching 98.50, putting renewed pressure on dollar pairs. EUR/USD has fallen back below the 1.1700 level.
🇪🇺 In Europe, futures continue to trade within sideways ranges.
📊 DAX 40 futures are hovering around 24,215, while Euro Stoxx 50 futures remain near 5,810.
🥇 Gold futures have declined once more – a pattern seen repeatedly over the past two months whenever tensions between the United States and Iran escalate. Prices are currently holding near key support around $4,600 per ounce.
🛢️ Oil has strengthened again, with Brent Crude moving back above $105 per barrel in recent hours.
₿ Meanwhile, Bitcoin pulled back during yesterday’s session, dropping below $76,000, but has since recovered and is trading back above $77,000.
