Market Report.
🔄 The usual back-and-forth we’ve come to expect from Trump is still going strong. Despite everything, the markets are opening on a pessimistic note, but without any major drama or sharp falls – a slight correction that is to be expected following last week’s impressive rise.
⚠️ New incidents between the United States and Iran are raising fears of a breakdown in the ceasefire or a collapse in negotiations.
🚢 U.S. is significantly escalating its naval enforcement actions against Iran-linked shipping worldwide as part of the broader “Economic Fury” campaign to increase pressure on Iran.
⚓ The U.S. Navy’s USS Spruance guided-missile destroyer intercepted the Iranian-flagged container ship M/V Touska as it attempted to run the U.S. naval blockade of Iranian ports in the Gulf of Oman. After multiple warnings over a 6-hour period, the Spruance fired rounds from its 5-inch deck gun into the Touska’s engine room, disabling the ship’s propulsion without causing casualties. U.S. Marines then boarded and seized the vessel.
📢 President Trump confirmed the details of the incident in a post on Truth Social, noting the ship was under U.S. Treasury sanctions for prior illegal activity and that its cargo is now being inspected.
🌊 The incident occurred amid volatility over the Strait of Hormuz, with Iran first declaring the strait “open” to commercial shipping, then reversing course and closing it again within 24 hours, blaming continued U.S. “piracy” and the naval blockade.
🔥 The event has further escalated tensions between the U.S. and Iran, with Iran vowing a “strong response” and describing the U.S. action as “maritime terrorism.”
🇮🇷 The Iranian version: The Iranian government and state media have condemned the U.S. operation as “maritime piracy,” a “ceasefire violation,” and an “unprovoked attack by American terrorists” on a commercial vessel. They have explicitly claimed that Iranian forces launched drone strikes on “several U.S. warships” or “U.S. military vessels” in the Gulf of Oman as immediate retaliation.
📺 The Iranian state media, such as the Tasnim News Agency, have used highly charged language to describe the U.S. actions as an “attack by American terrorist soldiers” on the Iranian container ship.
🌍 New global expansion of the U.S. naval crackdown on Iran-linked shipping:
📰 According to Wall Street Journal, the U.S. military is preparing in the coming days to board Iran-linked oil tankers and commercial ships in international waters, expanding its naval crackdown beyond the Middle East.
💥 This is part of an escalated pressure campaign dubbed “Economic Fury” to force Iran to fully reopen the Strait of Hormuz and meet U.S. demands on its nuclear program and missile/drone stockpiles.
🛢️ The U.S. will target Iran-linked “dark fleet” oil tankers carrying Iranian crude oil that evade sanctions, as well as commercial ships suspected of providing material support to Iran.
🎖️ The plans were confirmed by Gen. Dan Caine, Chairman of the Joint Chiefs of Staff, who stated the U.S. will “actively pursue any Iranian-flagged vessel or any vessel attempting to provide material support to Iran.”
🇪🇺 US negotiators are not trusted by Europe.
🤝 European allies who were involved in the previous 2015 nuclear deal feel sidelined, and warn the current U.S. team lacks the necessary expertise to navigate the complex technical issues. There are fears a hastily reached framework deal could backfire, leaving the U.S. and Iran in a state of technical deadlock that is difficult to resolve going forward.
😟 European allies fear the inexperienced U.S. negotiating team is pushing for a swift, headline-grabbing framework deal with Iran that could entrench rather than resolve deeper problems.
⏳ There are concerns the U.S. could lock in a superficial agreement on Iran’s nuclear program and sanctions relief, then struggle through months or years of technically complex follow-up talks.
🗣️ Diplomats warn that deep mistrust and sharply different negotiating styles between the U.S. and Iran raise the risk of a fragile framework that neither side can sustain politically.
🔬 Key unresolved technical disputes remain over Iran’s uranium enrichment and sanctions relief, which diplomats say require meticulous and subtle negotiations that cannot be rushed.
🏦 War and central banks:
📉 The war in Iran has become the dominant economic concern globally, with policymakers struggling to navigate the high levels of uncertainty and the potential for severe impacts on inflation, growth, and energy security.
🕐 The drawn-out nature of the war is a major concern, as policymakers are unsure how long it will last and the uncertainty is weighing heavily on the global economic outlook.
📈 There are fears of stagflation, with the war already impacting inflation and growth. Officials warn that if the conflict drags on, it could trigger a significant spike in inflation that leads to stagflation.
⚡ Energy security is a top priority, with risks of supply disruptions through the Strait of Hormuz potentially causing the “greatest energy crisis in history.” Diversifying energy sources is seen as crucial.
🎭 Trump’s dramatic script changes and twists are making it extremely difficult for policymakers to plan and make policy decisions, leading to a “meeting-to-meeting approach” rather than long-term commitments.
🍁 Canada distances itself from the US:
🏛️ Canadian Prime Minister Mark Carney stated that Canada’s close ties to the United States, once a strength, have now become a weakness for the country. He praised the heroism of historical Canadian military leaders like General Isaac Brock and Chief Tecumseh, who fought against U.S. invasion and expansion in the past.
🧱 The U.S. has imposed tariffs on Canadian exports and President Trump has repeatedly mused about annexing Canada and turning it into the 51st U.S. state.
📦 Carney said Canada cannot control the disruption coming from its U.S. neighbors and cannot bet its future on the hope that this will suddenly stop. Canada sends almost 70% of its exports to the United States and is due to review the USMCA free trade agreement this year, with U.S. officials suggesting they want major changes.
🕵️ The Epstein scandal is causing a political battle in the UK.
🏟️ On Monday, Starmer will address parliament to lay out the relevant facts regarding the Epstein’s scandal, while the top Foreign Office official who was involved has been sacked.
😮 Starmer is facing calls for his resignation over his handling of the Mandelson appointment, as it has emerged that Mandelson had failed a security vetting process prior to being appointed. Mandelson, a senior figure in Starmer’s Labour party, was previously sacked as ambassador in September 2025 following revelations about his ties to the late sex offender Jeffrey Epstein.
❌ Starmer had previously told parliament that all due process had been followed in Mandelson’s appointment, but the new information shows he was not informed that Mandelson had failed the vetting. Starmer’s opponents, including the Liberal Democrats and Conservatives, have accused him of lying and incompetence, saying his job is no longer tenable.
Market View.
📊 Markets are opening slightly lower following renewed tensions between the United States and Iran, although the ceasefire remains in place. It could be described as a mild hangover after last week’s impressive rally. Since the start of the truce, the S&P 500 has gained more than 12%.
📉 E‑mini S&P 500 futures are trading lower at around 7,125, while Nasdaq 100 futures remain above 26,700, though still below the highs reached last week.
💵 The US dollar index (DXY) began the week from one of its strongest recent levels, briefly reaching 98.40 before easing back to 98.25 and drifting lower. EUR/USD has pulled back from last week’s highs near 1.1850 to around 1.1765.
🇩🇪 In Europe, DAX 40 futures have opened lower and are attempting to hold above the 24,500 level. Euro Stoxx 50 futures are also trying to defend 5,900 as a key support area.
🛢️ Oil opened higher, with spot Brent crude reaching $97.50 per barrel before retreating to around $95.
🥇 Gold futures initially moved lower towards $4,750 per ounce, but have since regained momentum and are now trading above $4,800.
₿ Finally, Bitcoin surged above $78,300 on Friday afternoon, but has cooled over the weekend and is currently trading around $74,800.
