Market Report.
🗣️ Trump threatened to have Defense Secretary Pete Hegseth “finish off” Iran if it does not make concessions. He made the remark during a cabinet meeting at the White House yesterday, while discussing the ongoing U.S.-Iran negotiations to end the three-month-old conflict. If Iran fails to make concessions, Trump claims, “Hegseth will have to finish them off”.
⚖️ The statement follows mixed signals from the previous 48 hours, with the U.S. touting deal prospects while negotiations remain stalled on core issues. The conflicting signals between deal hopes and military escalation continued, as U.S. forces launched strikes in southern Iran that the Pentagon described as defensive, while Tehran vowed retaliation.
🛳️ The U.S. wants the strait fully open for global shipping without Iranian control, but Iran still restricts much of it despite the fragile ceasefire.
📝 Iranian state media says a memorandum between Iran and the United States outlines an immediate de-escalation across the Middle East, mutual respect for sovereignty, and a commitment to negotiate a Final Deal within 60 days (extendable by agreement). It calls for lifting a naval blockade and U.S. troop withdrawal near Iran within 30 days, and for Iran to reopen the Strait of Hormuz in the same period.
💰 The memorandum also includes freezing Iran’s nuclear program during talks, temporary lifting of oil and petrochemical sanctions, and a pledge of a $300 billion reconstruction program contingent on a Final Deal.
🔄 The agreement envisions a phased removal of primary and secondary sanctions and gradual U.S. release of frozen Iranian assets as negotiations progress.
✈️ The United States has promised to remove its forces from areas near Iran, according to unofficial interpretations of the agreement, according to Iranian media. And in fact, this seems to be what is happening. Israeli Channel 12 reports that the U.S. plans to relocate refueling tankers and cargo aircraft from Ben Gurion International Airport to bases in Europe. The move is explicitly conditional on reaching a ceasefire deal with Iran to formally end the three-month-old conflict.
📦 The planned repositioning also serves as a sign of progress in talks, signaling to Iran and the region that the U.S. is preparing for de-escalation while maintaining a rapid-response capability. The U.S. aircraft deployment began in February 2026 as part of the initial military buildup against Iran.
🔥 Trump rejected the idea of Iran transferring its highly enriched uranium to Russia or China, saying he would not be comfortable with that arrangement. He declared in a Truth Social post that Iran’s enriched uranium must be destroyed, either in the United States, inside the Islamic republic itself, or at another acceptable location.
💬 Trump also stated that the U.S. is not talking about any easing of sanctions on Iran or giving them money as part of a deal. He said the U.S. has control of money that Iran claims is theirs and will keep control until Iran behaves properly.
🌊 He added that he would not accept a short-term deal giving Iran control over the Strait of Hormuz. The strait must be open to everybody, with nobody controlling it, and he said the U.S. will watch over it as part of the negotiation.
🛢️ Oil prices fell sharply on Wednesday after Secretary of State Marco Rubio said the U.S. will give talks with Iran every chance to succeed. West Texas Intermediate tumbled more than 5 percent to close at 88.68 dollars per barrel, while Brent also lost more than 5 percent to settle at 94.29 dollars per barrel.
🤝 Rubio said the negotiations have made some progress and that President Trump prefers the diplomatic route, but he noted that other options remain available if talks fail.
⚔️ However, as Iran’s Islamic Revolutionary Guard Corps announced that it had attacked a US airbase and that any more US assaults would result in “a more decisive response,” Brent crude soared 3.7% to $97.79 in the last few hours.
Voices within the Federal Reserve:
📉 Minneapolis Fed President Neel Kashkari said bringing down inflation is his top priority because consumer prices remain much too high. He noted that inflation has stayed above the 2 percent target for more than five years while the labor market is in decent shape right now, so the focus must be on price stability.
⚠️ Kashkari warned that the longer inflation remains elevated, the greater the risk that expectations become unanchored and move higher. If that happens, the Fed would have to respond even more aggressively, making it far better to act now to keep expectations anchored.
🛢️ He attributed the current inflation surge primarily to energy and fertilizer prices.
🧾 Fed Vice Chair Philip Jefferson said it is appropriate to focus on returning inflation to 2 percent given the labor market has been very resilient to the energy shock. He stressed that by mandate he must keep both sides in mind, but the resilience of employment allows the focus to rest on price stability.
🤔 Jefferson said it is difficult to say moment by moment what rate policy should be given the uncertainty over the extent and duration of the war-induced energy shock. He noted that the energy shock is a headwind for growth, but expanding AI investment is boosting the economy at the same time.
🔍 Fed Governor Lisa Cook said she currently believes the right course is to hold rates steady from a risk-management perspective. However, she warned that inflation is clearly moving in the wrong direction, driven by tariffs, surging oil prices from the Iran war, and AI-related investment pushing up demand for chips, software, and construction wages.
📈 Cook stated that the risks remain tilted toward higher inflation. While she expects inflation to ease in coming months without rate hikes, she is prepared to raise rates if the expected disinflation does not appear in a timely manner. She expressed optimism that AI adoption will boost productivity and growth long-term but cautioned it could lead to job losses before any job gains.
🔺 Cook’s openness to rate hikes poses a potential challenge for new Chair Kevin Warsh, whom Trump expects to lower rates.
European counterparts concur with these Fed remarks:
🌍 ECB Chief Economist Philip Lane warned that the energy shock from the Middle East conflict will have a persistent impact on inflation even if a quick resolution to the war is found.
📉 The sharp decline in global oil supply has been masked until now by the drawdown of inventories. As those buffers are exhausted, the price impact becomes more acute.
🔁 Lane stressed that even if the initial energy shock begins to reverse, the second-round effects will be with us for a while, broadening price pressures throughout the economy.
New ways of financing spending in Japan.
🏦 Japan’s ruling Liberal Democratic Party proposed issuing “bridging bonds” to fund flagship programmes aimed at boosting growth and economic security. The draft proposal will serve as a basis for government discussions on how to fund investment plans amid growing market attention to the country’s worsening finances.
🔒 Bridging bonds are used for temporary funding needs and come with guarantees on specific means for redemption. This structure allows the government to argue it is mindful of fiscal discipline even as it boosts spending.
📈 Japanese government bond yields rose on the news as the report rekindled worries about the country’s finances. Markets may take the idea as negative for fiscal discipline because the government could ramp up spending without solidifying the means to fund it.
📌 Takaichi has laid out 17 strategic areas such as semiconductors and shipbuilding for domestic investment. The Nikkei reported that the government will consider including bridging bonds in its medium-term fiscal blueprint due in July, which would be the first compiled by the Takaichi administration.
Corporate News.
📝 SpaceX has publicly filed its S-1 registration statement with the SEC, officially moving forward with the largest initial public offering in history. The company plans to list on the Nasdaq under the ticker SPCX and also on the Nasdaq Texas exchange. The roadshow is expected to launch in early June, with pricing and trading potentially starting around mid-June.
💵 The company is targeting a raise of at least 75 billion dollars, with a valuation of 1.75 trillion to more than 2 trillion dollars. This would eclipse the Saudi Aramco record of roughly 29 billion dollars raised and instantly make SpaceX one of the world’s most valuable public companies.
👨💼 Elon Musk owns about 42 percent of equity but retains 85 percent voting control through a dual-class share structure.
📉 The company remains deeply unprofitable, with a net loss of about 4.9 billion dollars in 2025 and a first quarter 2026 loss of 4.3 billion dollars due to heavy spending on Starship, Starlink expansion, and artificial intelligence infrastructure.
🌐 SpaceX is pitching a total addressable market of 28.5 trillion dollars across space launch, satellite internet, point-to-point transport, Mars colonization, and space-based AI. Starlink is already profitable and growing fast, while the rest represents the long-term bet.
🏁 BYD is evaluating a move into top-tier motorsport for the first time in its history, according to a Bloomberg report from March 2026 based on anonymous sources. The report continues to circulate widely on social media.
🏎️ The Chinese electric vehicle giant is studying both Formula 1 and endurance racing, such as the World Endurance Championship which includes the 24 Hours of Le Mans.
🔧 The company is weighing the option of creating its own team from scratch or acquiring an existing one.
🌏 BYD surpassed Tesla in 2025 to become the world’s largest seller of electric vehicles. It is expanding rapidly into Europe, Latin America and Southeast Asia.
🎯 The main goal is to boost BYD’s global brand appeal as it expands aggressively outside China. Motorsport is seen as a way to shed the perception of a cheap Chinese brand and showcase its advanced hybrid and battery technology to premium audiences.
⚠️ Significant obstacles remain. Entering Formula 1 could cost up to 500 million dollars per season. One source told Bloomberg this is a major hurdle.
🧭 Geopolitical resistance is also a risk, as Formula 1 is dominated by European and American teams.
Market View.
↔️ Sideways movement and slight pullbacks in the US after the new highs recorded. S&P 500 futures remain in a sideways range at 7,530 points. Nasdaq 100 futures, after reaching and surpassing 30,300 points, have returned to the 29,920-point area.
💱 The US Dollar Index (DXY) broke higher, briefly surpassing 99.50 points, after which it pulled back to the current 99.35 points. This has caused movements in other currency pairs, such as EUR/USD, which has momentarily fallen back below 1.16 and is currently struggling to hold that area.
🇩🇪 In Europe, DAX 40 futures retreated during yesterday’s session, falling to the 25,000-point area, from where they rebounded to the current 25,120 points. Euro Stoxx 50 futures also pulled back to 6,000 points before bouncing to the current 6,040 points.
🛢️ Crude oil fell, reflecting the easing of tensions over the Iran conflict, but over the last few hours it has risen again following announcements of Iranian attacks on US positions, currently trading at $94.90 per barrel for spot Brent.
🥇 Gold futures have also fallen, driven by the dollar’s strengthening, and are currently at two-month lows of $4,412 per ounce.
🪙 Bitcoin is falling sharply, losing its most recent support levels from late April, and is trading at $72,690.
