Public Markets 24 Hours

Last updated: May 13, 2026, 5:30 AM ET

Geopolitical Tensions & Commodities Shock

Global energy markets remain dominated by Middle East conflict fallout, with the IEA now forecasting a contraction in global oil demand of 420,000 barrels a day this year, a massive downward revision from the prior 80,000-barrel estimate, as inventories draw down rapidly. The crisis has fundamentally altered investor calculus in the region, where geopolitical resilience has surpassed economic growth as the primary factor attracting capital. Oil prices slipped slightly as traders awaited clarity from the high-stakes meeting between Presidents Trump and Xi in Beijing, while the US Navy’s blockade around Hormuz faces challenges, evidenced by an Iranian-linked LPG tanker sailing past the boundary just ahead of the summit.

The impact of sustained high energy prices is translating into tangible economic strain across Europe and Asia. ECB member Olli Rehn warned that incoming data suggests the start of a stagflationary shock, a concern echoed in France where the economy is showing signs of faltering, with unemployment rising above 8% for the first time in five years. Meanwhile, Japan is reverting to coal power as conflict-driven spikes make procuring Liquefied Natural Gas prohibitively expensive, and shipping giant Hapag-Lloyd cautioned on higher fuel costs despite maintaining annual guidance.

Fixed Income & Central Bank Moves

U.S. Treasury yields reversed earlier gains but the 10-year note hovered near a one-year high following Tuesday's hotter-than-expected inflation data, fueling concerns that disinflation is receding as energy prices surge. This shift in pricing has directly impacted foreign holders, leading Japanese investors to dump the most US sovereign debt since 2022 amid an abrupt turnaround in Federal Reserve policy wagers. In Europe, government bond yields eased modestly, tracking the slight dip in oil prices, while UK Gilts recovered ground following a bruising selloff as investors weighed the political stability of Prime Minister Keir Starmer holding onto power.

Emerging market currencies experienced divergence based on specific policy actions and reserve strength. The Hungarian forint weakened sharply after the central bank unexpectedly cut the interest rate on its foreign-currency swaps, undermining one of the year's biggest EM currency rallies. In contrast, economists suggest India’s FX buffer remains far more robust than during the taper tantrum, capable of defending the rupee despite the oil shock, though the government is more than doubling gold tariffs to protect reserves. Turkey, however, recorded its largest monthly decline in foreign reserves in March due to the war-induced selloffs straining the lira.

Corporate Earnings & Dealmaking

European industrial and automotive sectors showed mixed results, with several giants lifting guidance despite the difficult backdrop. Deutsche Telekom lifted its full-year outlook based on its U.S. subsidiary's performance, while Germany’s Merck KGaA also raised guidance on life-sciences momentum. In the auto sector, Nissan projected a swing back to net profit for the fiscal year, signaling that recent restructuring moves are finally taking hold after seven consecutive quarterly losses, contrasting with BYD’s strategic moves to negotiate taking over European plants from Stellantis and others.

Dealmaking activity saw a major UK testing firm leaning toward accepting a buyout, as Intertek Group prepared to recommend EQT AB's final offer valued at £10.6bn, setting the stage for a contest among top London rainmakers in the takeover showdown. In the industrial space, Siemens launched a new $7 billion share buyback program spanning five years, even as the company posted higher first-quarter revenue across its core divisions. Meanwhile, emerging market investment flows continued, with Uzbekistan’s state fund rising in its London debut following a $604 million IPO.

Technology & US-China Dynamics

Anticipation surrounding the Trump-Xi summit cast a complex shadow over technology and trade, with market sentiment mixed ahead of the leaders’ meeting to discuss economic friction. While President Trump repeated military threats against Iran, which has cast a pall over the talks, a key focus remains the AI arms race, where the US currently holds a technological advantage after firms like Anthropic declined Chinese access to their newest models. Chinese AI stocks, however, surged temporarily on hopes that Jensen Huang’s presence on the US delegation could unlock future H200 chip supply, even as established giants like Tencent and Alibaba lag behind pure AI plays. In related market activity, the CME is planning to launch futures contracts for AI computing power, allowing hedging against GPU rental price volatility.

Global Health & Policy Notes

Markets received a minor reprieve from health scares as an isolated case in Italy tested negative for hantavirus, easing transmission worries sparked by an earlier Dutch patient. On the policy front, Greece is exploring early repayment of more of its bailout-era loans ahead of schedule this year. In the US, beef prices surged to new all-time highs, adding urgency to the Trump administration’s attempts to curb inflation, which has caused stocks to slide after April data showed prices running hotter than anticipated.