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Last updated: May 14, 2026, 2:30 AM ET

Geopolitics & Energy Markets

Markets remained focused on the high-stakes summit between President Donald Trump and Xi Jinping as oil prices edged higher in early Asian trade against a backdrop of persistent Middle East tensions following the ongoing Iran war. India formally requested the US extend its waiver on Russian oil imports as the nearly 11-week conflict continues to disrupt energy supplies, a move that mirrors supply concerns seen in China where refined fuel exports failed to rebound despite signals of easing export bans. Furthermore, Saudi Arabia’s top military adviser maintained silence on the war, raising questions about military strategy, while satellite data showed oil jetties at Iran’s Kharg Island remained empty on Tuesday, curbing export capacity.

The geopolitical uncertainty is already translating into tangible energy market shifts, with India preparing to scale back Russian crude if the US waiver lapses, while US ethane exports to China hit a record high as naphtha shortages spurred by the war force plastic makers to seek cheaper feedstocks. In related developments, a Japanese crude tanker undertook a rare transit through the Strait of Hormuz, even as a Chinese-owned tanker was reportedly preparing to test the US blockade by exiting the region over the next 24 hours. This backdrop of supply disruption has led ECB Governing Council member Martins Kazaks to warn that the central bank would need to hike borrowing costs if rising crude prices feed through into inflation expectations.

Global Equities & Corporate Earnings

Asian equities slipped modestly as investors booked profits following recent technology-driven gains while awaiting clearer policy signals from the summit in Beijing, a meeting that has otherwise been characterized by a lack of the usual cultural exchange gestures seen in past encounters between the two leaders. Meanwhile, in Japan, Honda posted its first annual loss since 1957 after taking a multibillion-dollar charge associated with scaling back ambitious electric-vehicle plans, signaling domestic struggles within the auto sector. In contrast, US markets were buoyed by tech, with Nvidia climbing to a $5.5 trillion valuation, the first company to reach that milestone, prompting other AI-related listings like Cerebras Systems raising $5.55 billion in a blockbuster IPO.

European exposure to the space technology boom is intensifying, as evidenced by the quadrupling of one British fund’s holdings, while a Ukrainian arms maker, Fire Point, plans a satellite push to reduce reliance on US defense aid, despite an ongoing internal probe for alleged graft. In the financial sector, Citadel is forcing key quantitative researchers to relocate from Hong Kong or resign, reflecting broader strategic shifts among global asset managers. Separately, US private equity backers are voicing frustration over ‘runaway’ legal costs charged by top law firms and are pushing for shared liability between investors and buyout groups.

Fixed Income & Monetary Policy

The Federal Reserve’s balance sheet reduction strategy may incorporate a new mechanism, as the US Treasury proposed investing idle cash held at the Fed into money markets, offering an alternative route to shrinking its footprint. In Europe, the certainty surrounding a June interest-rate hike from the European Central Bank is diminishing, despite hawkish comments from member Martins Kazaks linking hikes to oil-driven inflation, while Chief Economist Philip Lane remained non-committal on the immediate path forward. In Asia, Japanese government bonds attracted firmer demand at auction for 30-year debt, supported by relatively higher yields.

Commodities & Infrastructure

The rally in industrial metals is showing signs of fatigue, with copper retreating from its record close as Chinese purchasing slowed ahead of the US-China summit. In Australia, satellite data suggests steel-making coal mines may be struggling to sustain output recoveries, which could provide support for commodity prices. On the energy front, US natural gas futures inched higher pending weekly storage data, while appliance maker Whirlpool faces a looming $3 billion debt wall as consumer demand softens. Meanwhile, the broader trend of energy infrastructure investment continues, with Japanese refiner Eneos paying $2.2 billion for Chevron’s Asia-Pacific assets, and Total Energies leading a $10.5bn offshore development in Suriname tying the nation’s future to oil.

US Markets & Regulation

The US dollar index rose 0.10% to 95.19, marking its third consecutive day of gains, while gold maintained its recent decline as strengthening US inflation data reinforced bets that the Federal Reserve will maintain restrictive policy longer. In corporate restructuring, Cisco announced a $1 billion job cut plan to facilitate an all-in pivot toward artificial intelligence development. On the regulatory front, SDNY prosecutors are reportedly adopting a more lenient stance on corporate wrongdoing, advising Wall Street firms that they can self-report fraud and potentially avoid severe penalties. Elsewhere, the Trump administration is reportedly considering settling a lawsuit with the IRS that involves dropping audits of the president and his family while simultaneously pushing the agency to identify undocumented immigrants to advance immigration policy.