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Last updated: May 7, 2026, 8:30 PM ET

Geopolitical Tensions Drive Commodity & Equity Moves

Escalating Middle East conflict rattled markets globally, sending US stock-index futures lower as investors absorbed news of US and Iran forces exchanging fire in the Strait of Hormuz after Tehran attacked destroyers. Crude futures edged higher as initial optimism surrounding a potential truce deal faded, while the associated supply fears caused Shell to report first-quarter profits of nearly $7bn, more than double the prior quarter’s earnings following the oil price surge. The conflict’s financial fallout is already visible across the Atlantic, where Germany’s government now expects federal tax revenue to plummet by over €50bn ($58.9bn) through 2030, blaming the economic hit on the administration’s actions leading to a projected tax hole.

Gold prices climbed in early Asian trade as ongoing US-Iran tensions bolstered the metal’s safe-haven appeal, contrasting with the mixed signals in energy markets where US natural gas futures saw moderate gains following a smaller-than-expected storage injection last week by 500 billion cubic feet. Meanwhile, the volatility caused oil market liquidity to evaporate, amplifying price moves as traders avoided taking positions, a caution that also led Treasury yields to snap two daily declines awaiting a potential US-Iran breakthrough. Despite the geopolitical uncertainty, the International Energy Agency is urging Canada to move faster on exports to capitalize on current market conditions before they shift.

Corporate Earnings & Sector Performance

The software sector outperformed during the earnings season, providing a buffer as the S&P 500 pulled back from its record high, with fintech firm Block raising its full-year adjusted earnings guidance by 62% to $3.85 a share driven by lending booms. In contrast, consumer-facing firms showed signs of consumer trading down; Texas Roadhouse reported in-line results as diners opted for cheaper beef cuts to manage rising costs while Papa John’s saw customers forgo sides for smaller pizzas weighing on profitability. Elsewhere, the biopharma sector faced headwinds, as Gilead Sciences projected an adjusted 2026 loss of up to $1.05 per share due to acquired R&D expenses, a sharp downward revision from prior guidance forecasting earnings of up to $8.85 per share signaling steep integration costs.

Travel and leisure companies reported resilient demand despite Middle East conflict concerns; Inter Continental Hotels saw global room revenue rise and expects continued growth, offsetting conflict impacts, while Airbnb raised its outlook, anticipating annual sales increases in the low-to-mid-teen percentage range citing persistent travel demand. Conversely, appliance maker Whirlpool saw its stock fall as much as 20% after it halved its earnings guidance, warning that historically low consumer confidence is steering buyers away from its premium products forcing price adjustments. In the digital realm, Draft Kings swung to a first-quarter profit of $21.1 million, benefiting from stronger sportsbook margins, as revenue climbed 17% to $1.65 billion beating analyst estimates.

Deals, Capital Markets, and Private Credit Strains

Private credit is exhibiting signs of stress, with Golub Capital imposing withdrawal limits on its fund after investors requested to pull 8.5% of shares, marking the latest instance of a manager restricting investor redemptions. This sector remains under regulatory scrutiny, evidenced by Treasury Secretary Scott Bessent meeting with insurance regulators to discuss their exposure to these complex assets fueling mounting regulatory concerns. In corporate activity, a Blackstone-led group is preparing to inject at least $100 million of new capital into Medallia Inc. as part of a restructuring that will grant the creditors control of the firm following liquidity issues. Meanwhile, in Brazil, Compass Gas e Energia SA raised 3.2 billion reais ($650 in the first initial public offering in the country in nearly five years ending a prolonged IPO drought.

Investment managers appear poised for deployment despite recent market turbulence; Carlyle Group has amassed a record $96 billion ready to invest, though the firm itself swung to a first-quarter loss due to a wider decline in investment income masking deployment potential. In the tech sphere, cloud provider Core Weave widened its first-quarter loss, cautioning that component cost inflation may necessitate higher capital expenditures this year raising questions about future profitability. In fixed income, foreign central banks and governments have increased their holdings of Malaysian sovereign bonds to a record high, underscoring the country’s appeal as a stable reserve asset amid global volatility.

Regulatory and Political Developments

The US dollar index snapped a two-day losing streak, rising 0.2% to 94.96, even as the Federal Reserve’s Neel Kashkari suggested the Middle East conflict adds uncertainty to the near-term interest rate path making the next move unclear. On the corporate governance front, a Kazakh government official is slated to be proposed as the new CEO at the privately held mining group ERG amid a boardroom showdown, while Southeastern Asset Management publicly pressured Mattel to seek a sale, arguing the toymaker would benefit under private equity ownership or a competitor. Elsewhere, the US Department of Justice is reportedly investigating a lawyer from the Trump administration for potential misconduct after ordering an inquiry into the withholding of information related to a migrant’s international criminal charges with the DHS now unable to locate the individual.

International Markets & Currency Shifts

In Europe, Eurozone retail sales softened as consumers feel the energy pinch, pointing toward a general weakening of demand as inflation bites, though European stocks are being temporarily buoyed by strong earnings reports that mask tougher conditions ahead due to geopolitical uncertainty. Energy costs are a major concern for travel, with jet fuel shortages potentially impacting summer vacations across the continent raising questions about availability. Currency movements saw the Israeli shekel reach a 32-year high, providing a boost to the government but creating anxiety within the nation’s vital technology sector despite regional conflict condemnation. In Asia, Samsung is significantly shrinking its footprint in China, pulling back on TV and appliance production due to intense domestic competition reducing its market presence.