Market Report.
🕊️ The Middle East conflict hasn’t advanced further, nor has it deteriorated, and this equilibrium seems satisfactory for investors, with the upcoming US market set at record highs.
🔎 Looking ahead to this week, market watchers will focus on three major risk events. On Friday, all eyes will be on the U.S. nonfarm payrolls report and the unemployment rate. Early in the week, Tuesday brings the eurozone’s flash CPI reading for the month. Meanwhile, two U.S. manufacturing and services surveys are due: the ISM Manufacturing PMI on Monday, followed by the ISM Services PMI on Wednesday.
🗳️ Trump said on Friday he would make a final determination on a proposal to extend the April truce by another 60 days to allow time for a permanent end to the conflict.
🛡️ Defense Secretary Pete Hegseth said the U.S. is ready to restart attacks on Iran if a deal cannot be reached, speaking at the Shangri-La Dialogue in Singapore on May 30. He said U.S. stockpiles are more than sufficient and the defense industrial base is being supercharged to build two, three, or four times the munitions.
🌏 Hegseth stated the U.S. can focus on both the Middle East and the Asia-Pacific simultaneously and is not turning its back on the region. He described President Trump as patient and wanting a great deal that ensures Iran does not get a nuclear weapon.
⚔️ Separately, U.S. Central Command announced it conducted self-defense strikes on Iranian radar and drone control sites in Goruk and Qeshm Island after Iran shot down a U.S. MQ-1 drone operating over international waters. U.S. fighter aircraft eliminated Iranian air defenses, a ground control station, and two one-way attack drones, with no U.S. personnel harmed.
🔁 The two countries also traded strikes last week, with Iran targeting a U.S. air base after U.S. strikes near the Strait of Hormuz. Shipping through the strait remains at a trickle, with just eight vessels outbound on May 30 and only two of them tankers, compared to a pre-war daily average of about 136.
⛽ Global oil inventories could be so depleted by mid-June that actual shortages will emerge. Despite this, Brent crude rose 2.5 percent to $93.40 but remains well below the $100 mark.
Recent attacks in the middle east:
📰 A report by Bloomberg on Saturday details an attack on a US base by Iran, resulting in injuries. U.S. officials called the missile launch an egregious ceasefire violation. Iran portrayed it as proportionate payback.
🚀 Iran launched a Fateh-110 short-range ballistic missile toward the Ali Al Salem Air Base in Kuwait. Kuwaiti air defenses intercepted the missile, but falling debris struck the base and caused minor injuries to approximately five Americans, a mix of military personnel and civilian contractors. No fatalities were reported.
🛡️ This reinforces Iranian deterrence credibility and shows that limited U.S. operations will trigger measurable responses.
🛰️ The debris also seriously damaged or destroyed two U.S. MQ-9 Reaper drones, each worth roughly thirty million dollars. The details emerged from an anonymous source, as neither the U.S. Department of Defense, CENTCOM, nor the Kuwaiti government had issued public statements at the time of publication.
🕊️ At the time of the strike, a tentative framework for a 60-day ceasefire extension and renewed nuclear talks was under discussion. President Trump had signaled optimism that a deal was close, but a White House Situation Room meeting on May 29 ended without announcement, adding to mixed signals on the war’s direction.
The US conducts targeted attacks too.
✈️ U.S. fighter aircraft struck Iranian air-defense radar sites, a ground control station, and two one-way attack drones on Qeshm Island and in Goruk over the weekend. The targets were radar and drone command-and-control facilities assessed as direct threats to maritime traffic in the Strait of Hormuz. No U.S. losses were reported and the operation was described as limited and proportionate.
There is another ongoing conflict.
🎥 CNN was granted rare access to a forward Ukrainian military intelligence command post that plans and executes long-range kamikaze drone strikes deep into Russia. Footage shows Palantir’s PRISMA AI-powered battle-management software running live during active operations.
🛰️ PRISMA simultaneously tracks and coordinates thousands of drones, including scout, decoy, and strike variants, across a single screen. PRISMA is a specialized AI platform developed with Ukraine that ingests massive real-time data from satellite imagery, prior strike telemetry, and enemy radar emissions.
🧭 It identifies vulnerabilities in Russian air defenses and calculates optimal flight paths for each drone wave to exploit newly created gaps.
👁️ This would be first the visual confirmation of PRISMA in operational use inside a live strike-planning cell. Palantir has supported Ukraine since 2022 with AI and data-fusion tools, and PRISMA represents a specialized evolution for the drone-war phase.
The ECB continues to warn about dollarized stablecoins.
💬 ECB Executive Board member Isabel Schnabel said the rapid growth of stablecoins could further cement the international dominance of the US dollar. She spoke at the Bank of Korea International Conference in Seoul on June 1, 2026.
🇪🇺 Schnabel argued that the best reply is to advance Europe’s own digital infrastructure. A digital euro, a retail central bank digital currency, would preserve the public anchor of money and reduce dependence on non-European providers.
💱 Today almost all stablecoins in circulation are pegged to the dollar, with other currencies playing a negligible role. This means global dollar stablecoins could create new cross-border networks where dollarisation emerges as a byproduct of technology adoption rather than a deliberate currency choice.
🔗 Dollar dominance would be reinforced by network effects, scale, and first-mover advantages rather than necessarily stronger economic fundamentals. Even in regions with strong monetary credibility like the euro area, persistent dollar stablecoin use could strengthen dollar invoicing and limit the euro’s role in tokenised finance.
💵 The total stablecoin market capitalisation recently reached a record of roughly 320 billion dollars. USDT and USDC together dominate, while euro-denominated stablecoins remain marginal at around 500 million euros. it risks undermining sovereignty in emerging tokenised financial systems.
Industrial activity in the Asia-Pacific region:
🚨 The U.S.-Israeli war on Iran, which began in late February, has upended trade, rattled financial markets, and raised concerns over global energy supplies. The heads of the IEA, IMF, World Bank, and WTO warned the conflict is straining global energy supplies and hitting vulnerable economies hardest.
🏭 Asia’s factory output expanded steadily in May as firms stockpiled buffers against supply shocks from the Middle East conflict. The surveys showed the war’s economic fallout is broadening across the region.
📈 South Korea’s manufacturing PMI hit its fastest pace in five years at 54.8. Japan’s factory activity also expanded, though its PMI slowed to 54.5 from April’s multi-year high. China’s private sector gauge grew for a sixth straight month at 51.8, slightly better than forecasts.
📦 Companies are stockpiling to safeguard against product shortages and mitigate price risks driven by the war. Japanese firms reported the sharpest rise in input costs since September 2022 due to higher raw material prices from the Middle East war. Selling prices also marked the highest since October 2022.
🇮🇳 India’s manufacturing sector expanded at its fastest pace in three months with the PMI rising to 55.0. Cost pressures were among the most intense in nearly four years, driven by higher outlays for energy, fuel, materials, and transportation, with the war cited as a contributing factor. Firms sharply increased purchasing partly to build contingency stocks.
📉 China’s export orders contracted for the first time in five months, an early sign that rising energy prices are weighing on global demand for Chinese goods. Employment fell to a five-month low.
🤖 The AI boom is also fueling factory activity. Surging demand for artificial intelligence-related investment is helping economies like South Korea, Japan, and Taiwan. South Korea’s exports grew at their strongest annual pace in over four decades, underpinned by record chip sales.
Market View.
📈 US futures continue to start the week at all-time highs. S&P 500 futures surpass 7,600 points, trading at 7,615, while Nasdaq 100 futures exceed 30,500 points, trading at 30,570.
💵 The US Dollar Index (DXY) recovers the 99 level, leaving other pairs such as EUR/USD around 1.1650 and GBP/USD around 1.3465.
🇪🇺 In Europe, futures open with much more modesty and calm, with DAX 40 futures trading at 25,140 and Euro Stoxx 50 futures at 6,050.
🛢️ Spot Brent crude, which had reached the $90-per-barrel area on Friday, has rebounded to $93.75 per barrel, fueled by fresh crossfire between the US and Iran over the weekend.
🥇 Gold futures, which surpassed $4,625 per ounce on Friday, have pulled back to the current $4,540 per ounce.
₿ Bitcoin has fallen in recent hours, moving toward the $73,000 area.
