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Last updated: May 13, 2026, 11:30 AM ET

Global Markets & Macroeconomic Pressures

Equities faced headwinds as the Producer Price Index jumped at its fastest pace in four years in April, providing fresh evidence of surging inflation that day after consumer prices also indicated price pressures are accelerating, causing the Dow industrials to slip. This inflation anxiety immediately translated to fixed income, where the US 10-year yield hit its highest since July, prompting traders to intensify wagers for higher interest rates over the coming year, a view echoed by bond bears renewing bearish bets on Treasuries. Despite the tightening outlook, HSBC strategists maintain that stock rallies can continue further, arguing that powerful earnings recovery and low positioning levels will outweigh rising bond yields.

Geopolitics, Energy, and Trade Tensions

The ongoing conflict in the Middle East continues to reshape global energy flows and economic forecasts, with Saudi Arabia reporting output sank to its lowest since 1990 amid choked Persian Gulf exports. Satellite imagery confirmed that Iran’s Kharg Island jetties remained empty, limiting its crude export capacity, even as Tehran broadened its definition of the Strait of Hormuz. In response to global supply shocks, the EIA now forecasts global oil inventories will drain by 2.6 million barrels a day throughout 2026, a far steeper decline than previously estimated, while OPEC has reduced its 2026 global demand forecast to 1.17 million barrels daily. The conflict is also straining sovereign finances; Fitch Ratings slashed Bangladesh’s outlook to ‘negative’, citing high vulnerability, while Pakistan’s economy accelerated last quarter despite rising crude prices impacting its fuel import needs.

US Politics & Regulatory Shifts

Markets are closely watching the upcoming summit between President Trump and China’s Xi Jinping, a meeting that could carry lasting ramifications after the initial trade war devolved into an uneasy truce. Meanwhile, the administration's actions are creating internal dissonance: the tobacco industry secured a lucrative win in a vape dispute, with the president siding against his own FDA commissioner who subsequently resigned in protest. Furthermore, the government has begun the process of issuing refunds totaling about $160 billion plus interest on duties previously deemed illegal, even as the President continues to lash out at the courts overseeing the process.

Corporate Dealmaking & Sector Investment

The mining sector saw major consolidation, as Equinox Gold agreed to acquire Orla Mining in a deal valued at approximately $5.1 billion, forming a new North American gold giant worth $18.5 billion when finalized. In contrast, Agnico Eagle plans a C$14 billion ($10.2 billion) investment into its Ontario gold assets, representing one of the largest private sector commitments the province has ever seen. In technology, AI infrastructure spending continues to attract capital, with chips startup Fractile raising $220 million from investors including Peter Thiel’s Founders Fund, even as established Chinese giants like Alibaba and Tencent disappointed investors hoping for bigger AI-driven growth payoffs. On the corporate governance front, Skechers USA Inc. increased its offer to hedge funds challenging the $9.4 billion buyout by 3G Capital after initial settlement talks stalled.

Financial Sector Activity and Asset Allocation

Life insurers owned by private equity are actively reshaping portfolios by piling into alternative credit, deepening the industry's entanglement with the broader private credit space. This trend towards alternatives is reflected in asset manager advice, where BlackRock advocates staying invested in credit for income as the superior strategy for navigating current volatility, rather than chasing spreads. Elsewhere in finance, Golub Capital promoted two executives, naming David Golub co-CEO alongside his brother Lawrence, while Wells Fargo & Co. is marketing a multi-part investment-grade bond sale one month after reporting weaker-than-expected first-quarter results. In Europe, Raiffeisen Bank intensified its takeover race by improving its bid to acquire Balkans lender Addiko Bank AG.

Global Economic & Regulatory Developments

In the UK, political turbulence is making long-term wagers difficult, with HSBC noting that UK gilt markets have become a volatile ‘half-hour trade’ due to the fractious political climate. Meanwhile, global food supplies face tightening, as global rice production is set to fall for the first time in a decade, threatening supplies of the staple crop. In Asia, Bharti Airtel approved a $2.9 billion stock swap to increase its stake in its UK-listed African subsidiary, aiming to boost earnings. In stark contrast to corporate expansion, the government in India has doubled tariffs on gold imports in an effort to protect the rupee from oil-shock related pressures, a move that has added to pessimism around local stocks.

Defense & Infrastructure Spending

European defense manufacturing is scaling up production in response to geopolitical conflict, evidenced by the deal struck between Perennial Autonomy and Twentyfour Industries to manufacture the Merops drone interceptor in Germany. Meanwhile, US tech firms are contemplating deeper involvement in next-generation energy, with AI hyperscalers considering investments in SMR nuclear fuel. On the infrastructure front, Senegal’s state oil company announced the Yakaar-Teranga gas project will cost $7.5 billion to develop, a necessary expenditure intended to eliminate the country's costly energy subsidies once the facility is operational.