Market Report.
🗓️ Yesterday, Secretary of State Marco Rubio laid out tough conditions for any potential agreement with Iran during congressional testimony, signaling that the U.S. will not offer sanctions relief without concrete Iranian concessions.
🛣️ Rubio stated that Iran must first reopen the Strait of Hormuz and explicitly declare it open. He added that Tehran must commit to negotiating the disposal of its stockpile of highly enriched uranium. Sanctions will not be lifted solely for reopening the strait; any relief remains conditional on broader steps.
🌊 The Secretary also noted that Oman has “flirted” with Iran over control of the strategic waterway. He warned that Iran retains a substantial arsenal of drones, although its conventional military shield has been “substantially eroded.” When asked about the timing of a possible deal, Rubio said it could come “today, tomorrow or next week.”
🗣️ Rubio added in response to the questions, “Today, there is no Iranian navy. There is no such thing. There is no navy. There is no Iranian navy.” However, it is that same navy which is currently blocking the Strait of Hormuz
🛢️ Meanwhile, in response to the three-month-long crisis, the UAE’s state-owned oil company ADNOC plans to build a multi-fuel pipeline—carrying petrol, diesel, and jet fuel—designed to bypass the Strait of Hormuz.
But the world sees this zig zag in negotiations with Iran as a mirage.
🇺🇸 Trump’s peace initiatives on Ukraine, Iran, and Gaza have all stalled. The New York Times reported that Russia and Iran have tired of what they see as bad-faith US negotiations and prefer to continue the war rather than engage further with a deceitful American regime.
🔀 Trump’s own contradictory statements reflect the diplomatic disarray. He said he did not care if talks were over and found them boring, only to later praise the same negotiations. He also claimed the US did not destroy Iran’s military, framing this as a strategic choice rather than a failure.
📰 Bloomberg reports that the U.S. and Israel jointly launched the war on Iran in February 2026, but their diverging goals, especially over Lebanon, are now the main hurdle to a deal. Trump seeks a diplomatic off-ramp that would reopen the Strait of Hormuz, impose nuclear limits on Iran, and provide sanctions relief. Iran insists any agreement must also address the fighting involving Hezbollah in Lebanon.
🔥 The immediate flashpoint is Israel’s ongoing military escalation against Hezbollah, including strikes and threats against southern Lebanon and Beirut’s suburbs.
🏛️ Trump wants a quick deal to claim a foreign-policy win and reduce economic pain, while Israel sees the war as a chance to decisively weaken Iran’s regional network and is less willing to accept a deal that leaves Hezbollah intact. The situation has generated reports of tense calls between the leaders.
🎯 Israel aims to maximize degradation of Iranian and proxy capabilities ahead of Israeli elections, with a quick U.S.-Iran deal that sidelines its security demands posing a political risk to Netanyahu.
💬 In Netanyahu’s own words yesterday, “The Iranian regime is “doomed to disappear.” Mossad will remain on the front lines against Iranian aggression.
Turkey convinced Trump to cancel part of the operation against Iran, the Kurdish element.
📺 During an interview on PBS’s Firing Line, Maj. Gen. (res.) Tamir Hayman, former head of the IDF’s Military Intelligence Directorate, discussed the failed joint campaign against Iran in February 2026, known as Operation Roaring Lion or Epic Fury, explaining why the plan was scrapped.
🛡️ The centerpiece was a Kurdish-led invasion. Hayman stated that the centerpiece of the entire sequence was meant to be a Kurdish invasion, leveraging forces or opposition in northwestern Iran to spark wider unrest and facilitate the operation’s goals.
🤝 Erdogan convinced Trump to cancel it. Hayman said that Turkish President Erdogan, viewing a Kurdish state or autonomy as a strategic threat to Turkey, convinced Trump that backing the Kurds went against Turkish interests. Hayman confirmed that Trump then definitely canceled the operation.
🔻 The decision scaled the war back. Without the Kurdish element, the campaign launched on February 28, 2026, was reduced to primarily aerial and special-operations strikes. It killed Supreme Leader Khamenei and degraded some capabilities but failed to topple the regime or destroy the nuclear program.
Meanwhile, the crossfire continues during the false “ceasefire.”
🚀 U.S. and partner forces defended against multiple Iranian ballistic missiles and drones on June 2. CENTCOM reported that Iran launched several ballistic missiles toward regional neighbors, but all failed to hit their intended targets.
🛡️ U.S. Central Command forces also shot down three one-way attack drones launched by Iran toward civilian mariners transiting regional waters. American forces conducted self-defense strikes on an Iranian military ground control station on Qeshm Island in response.
📈 Bullish effects again on the crude market.
⛽ Although prices have not yet completely accounted for the worst-case situations, oil markets have been on edge due to Strait of Hormuz interruptions. Brent Crude, the international benchmark, increased almost 1% close to 98$ per barrel.
Not only is NATO not dissolving, but it is expanding its nuclear missile systems.
🇺🇸 The U.S. is reportedly considering expanding its nuclear weapons-hosting arrangements to include more NATO countries in Europe, according to the Financial Times citing people briefed on the confidential discussions. Six nations currently host U.S. dual-capable aircraft under NATO’s sharing arrangements, and this group could now grow to include countries on the eastern flank such as Poland and certain Baltic states.
📋 A NATO official said work to assess and potentially adapt the nuclear deterrence posture has been ongoing for several years and is not linked to any U.S. decision to adjust its conventional posture.
💼 And as always, everything is a war business. An expanded deployment would boost demand for dual-capable aircraft such as the F-35, benefiting manufacturers and supply chain companies including BAE Systems, Lockheed Martin, Rolls-Royce, Cobham, Qinetiq, Northrop Grumman, and RTX. These jets cost significant sums to operate and maintain, potentially creating large earnings opportunities and new jobs.
🇺🇸 The U.S. is reportedly considering expanding its nuclear weapons-hosting arrangements to include more NATO countries in Europe, according to the Financial Times citing people briefed on the confidential discussions. Six nations currently host U.S. dual-capable aircraft under NATO’s sharing arrangements, and this group could now grow to include countries on the eastern flank such as Poland and certain Baltic states.
👤 Trump selected loyalist Bill Pulte, who has no intelligence background, as acting Director of National Intelligence. Pulte is a 38-year-old heir to a construction fortune who currently heads the Federal Housing Finance Agency. He has become known for targeting Democratic members of Congress and Federal Reserve officials and has been sued for allegedly abusing his power by obtaining personal mortgage records against Trump opponents.
⚖️ Pulte also played a key role in the White House effort to remove Fed Governor Lisa Cook, which included unsubstantiated mortgage fraud claims.
Central bank movements:
🏴 The Bank of England held its benchmark interest rate at 3.75 percent, but policymakers warned that the ongoing conflict in the Middle East has altered their economic calculations.
🗣️ Yesterday, governor Andrew Bailey attributed the entire excess inflation reading to events in the Gulf region. He described the baseline scenario as a slowdown rather than a recession, though with high uncertainty. Bailey also cautioned that markets are too optimistic about the productivity pass-through of artificial intelligence.
⏳ Thanks to tighter financial conditions, the BoE has “time” to assess the situation, he said, but cannot wait for hard evidence on second-round effects. The Bank is currently on a “glide path” toward its equilibrium level of reserves, which could be reached in one to two years.
📈 Megan Greene, a hawkish member of the Monetary Policy Committee, struck a firmer tone: “The case for raising rates grows as the conflict continues.” She indicated that a rate increase could come in weeks or months. Greene prioritizes price stabilization over output, adding that British households and businesses are today more sensitive to inflation than in the past. “The risk of action is less serious than the risk of inaction,” she said
🇯🇵 In Japan, BOJ Governor Kazuo Ueda will deliver a closely watched speech that could reveal his thinking on the prospects of a June rate hike. Surching fuel costs from the Iran war are broadening price pressures in an already fragile economy. Markets expect the BOJ to raise short-term rates to 1 percent from 0.75 percent at the June 15-16 meeting.
⚖️ Ueda faces a tricky balancing act. Failing to signal a June hike may further weaken the yen, which breached the 160-per-dollar threshold earlier on Wednesday. But offering too clear a signal could be risky given the unpredictable nature of the Iran war.
📊 Several factors point to a strong chance of a June hike. The nine-member board is increasingly in favor of an early move. Three members dissented at the April meeting to keep rates steady, while two others warned of mounting price pressures in recent speeches. Wholesale inflation hit a three-year high in April.
🤝 U.S. Treasury Secretary Scott Bessent signalled Washington’s desire for BOJ rate hikes, saying Ueda would do what he needs to do if granted independence. Dovish Prime Minister Takaichi has refrained from pushing back against an early hike. Finance Minister Katayama said her views are aligned with the BOJ governor.
Corporate News.
🚀 Jensen Huang, the CEO of Nvidia, who is the AI kingmaker, provided the most recent push upwards by endorsing Marvell Technology, a chipmaker with a superhero-sounding name, as the subsequent trillion-dollar enterprise, thereby causing its stock price to increase by over 30%.
💬 According to Goldman Sachs CEO David Solomon, investors have switched to “greed” mode, with markets prepared to test an unheard-of fundraising wave for large artificial intelligence companies.
Market View.
📈 And despite all the external geopolitical tensions, we begin a new session with US futures once again at all-time highs. Mini S&P 500 futures stand at 7,620 points, and Nasdaq 100 futures stand at 30,712 points at present.
💵 The US Dollar Index (DXY) is showing strength once more, rising to highs of 99.37 points over the last few hours. This has led to bearish moves against the dollar: EUR/USD falls to 1.1615 and GBP/USD loses the 1.3550 level.
📉 In Europe, the divergence with US equities returns. DAX 40 futures fall to the 25,075-point area. Euro Stoxx 50 futures rose during yesterday’s session above 6,100 points but are now pulling back to 6,093 points.
🛢️ The crude oil market has turned bullish again, with spot Brent approaching $98 per barrel, still below the $100 barrier.
🥇 Gold futures once again lose the $4,500 per ounce zone and are currently trading at $4,490 per ounce.
฿ Bitcoin is plunging, even breaking below the $70,000 mark and falling below $65,500 in recent hours, now rebounding to $67,000.
