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Last updated: May 13, 2026, 2:30 PM ET

Geopolitical Tensions & Energy Markets

Global energy markets remain highly reactive to the ongoing conflict in the Middle East, with crude flows through the Strait of Hormuz plunging nearly 30% in the first quarter of 2026, signaling a persistent supply shock that has already driven wholesale prices higher. The instability is forcing major shifts, evidenced by Saudi Arabia’s crude production sinking to its lowest level since 1990 as output was choked by Persian Gulf disruptions, even as a Chinese-owned supertanker tests the U.S. blockade near the Strait. This energy stress is now radiating globally, causing Pakistan’s economy to accelerate despite rising import costs, while Fitch Ratings slashed Bangladesh’s outlook due to high vulnerability to the conflict, and Turkey’s central bank must revise inflation forecasts upward.

The focus on supply stability is reshaping investment priorities, as evidenced by the U.S. leveraging its status as a global energy exporter following the shale boom and geopolitical disruptions. However, the fallout is complex: while North Sea oil traded at a discount for the first time during the war, the global impact is severe, with construction projects stalling worldwide due to soaring material costs derived from oil products. Furthermore, the war is creating strategic dependencies, as the U.S. requires access to rare-earth minerals dominated by China to rebuild drained weapons stockpiles.

Fixed Income & Inflation Pressures

Surging energy prices are aggressively pushing inflation expectations higher, leading investors to secure 5% yields on 30-year Treasuries for the first time since 2007, prompting Japanese funds to execute their largest dump of U.S. sovereign debt since 2022. Benchmark 10-year Treasury yields climbed to their highest level since July as traders increased bets on near-term rate hikes, a trend that the Federal Reserve’s potential nominee, Kevin Warsh, would likely confront with sustained hawkish policy. Despite this, equity markets are attempting to defy the inflation narrative; S&P 500 futures edged up ahead of the Trump-Xi summit, with HSBC strategists arguing that strong earnings and low positioning can absorb the pressure from rising yields.

Corporate Dealmaking & IPO Activity

The initial public offering market saw significant activity, particularly in the burgeoning energy transition sector, as geothermal champion Fervo Energy debuted strongly on the Nasdaq, raising $1.89 billion in an upsized offering and seeing shares immediately jump 33% above the IPO price. The IPO valued the company, backed by figures including Bill Gates and Google, at approximately $7.7 billion. Shifting focus to traditional energy, Swiss power companies are planning for longevity, with nuclear plants at Goesgen and Leibstadt deemed profitable for up to 80 years beyond previous estimates, while European defense consolidation continues as a Czech group made an offer for KNDS. Elsewhere in M&A, Equinox Gold and Orla Mining agreed to merge, creating an $18.5 billion North American gold major.

Technology, Autos, and Geopolitics in China

The high-stakes summit between President Trump and Xi Jinping in Beijing is occurring against a backdrop of deep rivalry, where China is seen as playing a generational game for dominance while the U.S. pursues immediate wins. While leaders are expected to discuss the risks of the AI arms race, neither nation appears willing to unilaterally slow development, even as Chinese tech giants continue heavy investment; Tencent maintained double-digit profit growth, though Alibaba’s profitability lagged due to AI spending and competition. The auto sector is also pivoting: Ford shares surged following a bullish call from Morgan Stanley focused on its energy storage business, while Chinese EV maker BYD is negotiating to acquire European plants from Stellantis and others.

Financial Services and Regulatory Moves

In financial markets, alternative asset manager Golub Capital promoted executives, naming David and Lawrence Golub as Co-CEOs for the first time, while Wells Fargo marketed a three-part investment-grade bond sale shortly after reporting soft Q1 results. Meanwhile, private equity firms are driving a significant portfolio shift in the insurance sector, with PE-owned insurers piling into alternative credit, a trend that former SEC Chair Clayton suggested did not indicate excess leverage in private credit. In litigation, Skechers USA increased its offer to hedge funds challenging the price of the 3G Capital $9.4 billion buyout, as settlement talks failed.

Domestic U.S. & Political Developments

In the U.S., inflation data continues to prompt policy concern, with the Producer Price Index jumping at its fastest pace in four years, overshadowing calls from some to suspend the federal gas tax. Political maneuvering remains fraught: the House is close to forcing a vote on Ukraine aid after reaching the 218-signature threshold, while President Trump's decision to side with tobacco lobbyists against his own FDA commissioner led to a key spokesman’s resignation. In corporate news, Northeastern University secured a $202.7 million windfall following its takeover of Marymount Manhattan College, bolstered by the acquisition of prime Manhattan real estate.