Market Report.
🤝 Israel and Lebanon agreed on Wednesday to the implementation of a ceasefire following negotiations in Washington. The agreement is contingent on a complete cessation of fire from Hezbollah and the evacuation of all its operatives from the South Litani Sector.
🚧 The two sides agreed, with U.S. guidance, to swiftly advance the creation of pilot zones where the Lebanese Armed Forces will take exclusive control of the territory to the exclusion of all non-state actors.
✈️ According to Reuters, Israeli drone strikes killed at least six people in southern Lebanon and targeted a car south of Beirut on the same day the ceasefire was announced. Israel said it intercepted a hostile aircraft likely fired by Hezbollah.
🗓️ The parties will reconvene for political and security-related talks during the week of June 22 with a view toward a comprehensive agreement.
Gulf under attack, again.
🛩️ A day after the U.S. Central Command carried out “self-defense strikes” on Qeshm Island in the Persian Gulf, Iran attacked the Kuwait International Airport, leading to the comments.
🗣️ Yesterday, president Donald Trump explained the rationale behind the U.S. attack on Iran, saying that the operation was driven by Israel’s need for American support. “Israel needed us. They couldn’t have done it without us. They couldn’t have even come close. They needed us, and they got us to help them,” Trump said.
🤝 Netanyahu said during a CNBC interview, that he and Trump have tactical disagreements but agree on the main things, primarily preventing Iran from obtaining a nuclear weapon. He downplayed reports of a schism, saying that as in the best of families, they sometimes disagree in the morning and find common ground by the afternoon. He described Trump as the greatest friend to Israel.
🤐 Netanyahu brushed off a question about Trump reportedly calling him “fucking crazy” during a phone call, saying he would not get into details. Trump later confirmed the exchange to the New York Post but framed it as two wartime leaders who work well together, adding he was perturbed at Netanyahu’s constant fighting with Lebanon.
📞 Netanyahu said he speaks with Trump once every two days. Asked about how the war should end, he conceded it is an open question.
⚔️ Netanyahu said if necessary there will be a full-scale return to military action. This comment leads to higher oil prices.
💸 The US army is tightening budgets.
📉 Army officials briefed Fox News yesterday, on mounting financial pressures within the service’s fiscal year 2026 budget. The key drivers cited were the ongoing war with Iran, unplanned southern border operations and National Guard deployments, and sharply higher global fuel prices inflating logistics costs.
🔧 These unplanned costs were not built into the FY2026 budget, forcing the Army to make internal trade-offs including cuts to training and readiness activities. Independent reporting confirmed a 4 to 6 billion dollar Army budget shortfall for the remainder of the fiscal year.
US Congress could pull the US out of the war.
🗳️ The U.S. House of Representatives voted 215 to 208 on Wednesday to approve a war powers resolution that directs President Trump to withdraw U.S. troops from the conflict with Iran unless Congress declares war or authorizes military force. The vote is largely symbolic, as legislation must also pass the Senate and faces constitutional debate over whether such resolutions are valid even if approved.
📉 The vote reflects growing unease among some Republicans over Trump’s handling of the three-month-old war. It marks a rare bipartisan effort to curb presidential war powers. Three previous war powers resolutions had failed in the House by increasingly slim margins, and Republican leaders postponed a vote on this one last month when it appeared likely to pass. The Senate advanced a similar measure last month in a procedural vote, but further Senate votes have not been scheduled.
⚖️ Democrats argued that only Congress can declare war under the Constitution and that Trump may have pulled the country into a long conflict without a clear strategy. They also highlighted rising prices for gasoline, food, and other products since the U.S.-Israeli strikes began on February 28, making affordability a central theme ahead of November’s midterm elections.
The Iran war has changed the shape of the Middle East.
💰 The Iran war has driven direct costs to roughly 29 billion dollars so far, mostly in munitions, with supplemental requests potentially reaching 200 billion dollars.
🛡️ The U.S.-Israeli war on Iran began in February 2026 and initially appeared successful. President Trump declared victory, but Iran maintained its military and industrial strength. No uprising occurred, and the war’s main objective was not achieved. The conflict led to a transformation within Iran, fostering adaptation and innovation in its military and governance.
📘 According to a new report published on Foreign Affairs, a new leadership, mainly from the Islamic Revolutionary Guard Corps, emerged with a nationalistic perspective. This generation, shaped by experiences in the Iran-Iraq War, focuses on state management rather than revolutionary ideology. Rapid institutional changes occurred between the two wars, emphasizing decentralization and quick adaptation.
🏛️ A new Supreme Defense Council was formed to streamline decision-making.
🚀 Iran’s military strategy evolved, employing systematic missile and drone attacks against adversaries.
🛡️ Asymmetric warfare tactics targeted U.S. defenses, weakening their capabilities.
The emerging crisis.
📉 A stark warning from Kirill Dmitriev, Executive Director of the Russian Direct Investment Fund, we first brought up on May 1st about the economic impact of the Gulf crisis appears to be unfolding, according to recent assessments.
🛢️ So far, commercial oil inventories and strategic reserves have acted as a buffer, masking an estimated 15 percent loss in global crude supply. That has kept price increases relatively moderate.
⏳ But the situation is expected to worsen from now on. In June and July, prices are forecast to rise further, and distribution problems could lead to temporary gasoline station closures. Some petroleum derivatives are likely to become scarce.
🛑 By August, Western governments may begin introducing rationing measures, and smaller refineries could be forced to shut down.
🇺🇸 In the United States, political pressure from non-oil industries, financial circles, and the general public is expected to outweigh the influence of pro-Israel lobbies, according to the analysis.
🔁 Even after a potential agreement to reopen the Strait of Hormuz, it would take many more months for sufficient oil supply to return to the market.
🏦 Separately, the Vice President of the European Central Bank warned that shockwaves from the crisis would continue to affect prices for months, even after the strait is reopened.
The USDJPY reaches 160.
📈 The yen strengthened above the 160 level, which traders see as a possible intervention zone. The Japanese government expects the Bank of Japan to align its policies with recent hawkish remarks from Governor Kazuo Ueda. Some analysts believe Tokyo’s market intervention appears more favorable when viewed over the past two decades.
Bitcoin in trouble.
📉 Long-term Bitcoin holders, those who have held for at least 155 days, have turned into sellers after being largely inactive from February to April. In the past two days alone, they sold about 2.4 billion dollars in Bitcoin.
📊 Compass Point analyst Ed Engel noted that 26 percent of Bitcoin sold in the past 30 days came from investors who bought above 90,000 dollars. This cohort had been resilient throughout the bear market but is finally capitulating as Bitcoin approaches new cycle lows.
🔍 Engel described top-buyer capitulation as a common theme in late cycle bear markets. He said this makes the firm more confident that Bitcoin’s bear market is in its late stages.
❓ The divergence has investors questioning both of Bitcoin’s dominant narratives: that it is digital gold and that it trades like a high beta tech stock.
💼 Bitcoin ETFs registered their twelfth consecutive day of net outflows, the longest streak ever. Net assets across Bitcoin ETFs fell to 85 billion dollars from 107.8 billion on May 14.
🏦 As CNBC reports, Citi analyst Alex Saunders said ETF flows are the primary driver of Bitcoin price appreciation, explaining approximately 45 percent of weekly return variation.
Corporate News.
📉 Broadcom reported revenue of 22.19 billion dollars in its fiscal second quarter, slightly below analyst estimates of 22.27 billion. Adjusted earnings per share came in at 2.44 dollars, above the 2.40 forecast.
📉 The stock fell in extended trading after CEO Hock Tan did not raise the company’s full-year target of 100 billion dollars in AI chip sales. He reiterated guidance for AI semiconductor revenue to exceed 100 billion dollars in fiscal 2026.
🤖 Broadcom’s AI revenue more than doubled to 10.8 billion dollars in the quarter. Tan said he expects AI revenue to triple in the current quarter to about 16 billion dollars, but noted that bookings are not for immediate delivery as customers need to align other elements first. The company also said it would shift to offering chips only instead of complete integrated AI systems for its customers.
🚀 SpaceX set a fixed IPO price of 135 dollars per share, resulting in a valuation of 1.77 trillion dollars. The company plans to sell 555.6 million shares to raise 75 billion dollars, with underwriters having an option to buy an additional 83.33 million shares. Elon Musk will retain over 82 percent voting control after the offering.
🏛️ SpaceX would be the seventh largest U.S. company by market capitalization, ahead of Tesla’s roughly 1.6 trillion dollar value. The company is expected to debut on the Nasdaq under the ticker SPCX on June 12.
📈 The offering would be the largest IPO in history, more than triple the size of Alibaba’s previous record. Goldman Sachs is the lead banker, followed by Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase.
📣 The IPO comes as AI companies Anthropic and OpenAI also race to go public. Anthropic confidentially filed its IPO prospectus on Monday, and OpenAI is preparing to file in the coming weeks.
Market View.
📉 Markets are pulling back slightly amid pessimism over the resolution of the Middle East conflict, in line with our forecast over recent weeks.
📉 Mini S&P 500 futures have retreated to the 7,550-point area; Nasdaq futures appear to be finding support around 30,500 points.
💵 The US Dollar Index (DXY) has broken above the 99.45 barrier and surpassed 99.50, before pulling back hours later to the current 99.45. This has triggered bearish moves in currency pairs: EUR/USD momentarily dipped below 1.15 and now stands at 1.1615, while GBP/USD fell towards 1.34 before rebounding to the current 1.3430.
🇪🇺 In Europe, indices are rebounding slightly after an active session yesterday. DAX 40 futures fell towards the 24,700-point area but rebounded to the current 24,830 points. Euro Stoxx 50 futures have held up better, finding support at 6,030 and bouncing back to the current 6,060 points.
🛢️ Spot Brent crude rose to practically $99 per barrel following a Netanyahu interview in which he stated they are prepared to reactivate the war; spot Brent has since pulled back to the current $97 per barrel.
🥇 Gold futures lost the $4,450 per ounce level during yesterday’s session but rebounded quickly and are now trading around $4,500 per ounce.
🚨 Bitcoin is plunging once again, hitting a low of $61,310 in recent hours, before staging a strong rebound to the current $63,975.
