Public Markets 3 Days

Last updated: May 12, 2026, 8:30 AM ET

Geopolitical Tensions and Commodity Spikes

Global markets continued to absorb the impact of the Middle East stalemate, which drove crude oil prices higher ahead of the anticipated U.S. Consumer Price Index report. The volatility is creating severe supply chain disruptions, forcing Japanese snack maker Calbee to shift potato chip packaging to monochrome due to shortages of petroleum-based inks, while Shiseido seeks plant-based substitutes for oil-derived cosmetic inputs. Concerns over energy security drove Adnoc Gas to forecast profit hits between $400M and $600M in Q2 from the Strait of Hormuz closure, even as Iran claims deployment of mini-subs to guard the waterway amid stalled peace talks.

The energy crisis is showing varied effects across sectors, with Saudi Aramco's CEO warning of long-term market disruption despite reporting a profit jump due to higher prices. In response to the crisis, the UK, France, and over 40 nations will convene to plan escort missions through Hormuz once a ceasefire is achieved, while Qatar mandated LNG ships to go dark at its main export facility as a new safety measure. The conflict is also causing specific chemical shortages, as new Chinese export restrictions are further crimping the sulfuric acid market, a chemical essential for various industrial uses.

Emerging markets felt immediate pressure as hopes for an Iran ceasefire dimmed, causing widespread declines in currencies and stocks, with the Korean won and Thai baht leading losses. This sentiment was mirrored in South Korea, where the 10-year benchmark bond yield surpassed 4% for the first time since late 2023, reflecting growing trader expectations for aggressive interest rate hikes to counter imported inflation. On the currency front, the yen experienced sharp, brief gains during U.S. Treasury Secretary Scott Bessent’s visit to Tokyo before retreating, as the Japanese government navigates ongoing volatility following weeks of currency swings.

Equities and Corporate Earnings

U.S. stock futures ticked lower as investors braced for inflation data, specifically showing a retreat in high-flying technology names, though JPMorgan asserts corporate profits eclipse risks for the broader equity market. European shares faced broad declines, yet Bayer shares bucked the trend, climbing as much as 6.9% after its earnings beat expectations, providing a rare bright spot amid wider market anxiety tied to the Middle East situation. Meanwhile, in Asia, JPMorgan raised its Kospi targets to 10,000 for South Korea, citing momentum in semiconductors and corporate governance reforms, suggesting underlying strength in specific regional sectors.

Corporate results showed mixed fortunes globally. Chinese e-commerce titan JD.com returned to profitability in the first quarter, successfully stemming losses in its critical food-delivery segment. Conversely, sportswear firm Under Armour posted a quarterly loss as revenue declines in its core North American market outweighed international sales growth. In European telecom, Vodafone shares fell after its German business disappointed and adjusted earnings slightly missed forecasts, even as the company reported overall organic revenue growth due to its strategic pivot toward core markets like Germany and the UK where sales beat expectations.

Deals, M&A, and Private Markets

The product testing and inspection sector saw intensified M&A activity, with EQT submitting a final, fourth bid for Intertek Group Plc, while activist investor Palliser Capital built up a stake in the British firm, pressuring management to engage in deal discussions. Separately, private equity firms Bain Capital and LY Corp. jointly launched a competing offer for Tokyo’s $3.7bn price comparison site Kakaku.com Inc., challenging an existing bid from EQT. In infrastructure, Lufthansa plans to increase its stake in ITA Airways to 90% for nearly $400M, while German industrial giant Siemens is exploring the acquisition of Italian rail signaling firm Mer Mec SpA.

In the world of big tech and finance, Amazon initiated a Swiss franc bond sale structured across a record six tranches, indicating major corporations are diversifying debt issuance beyond traditional dollar markets. Financial infrastructure saw development as JPMorgan Chase spent hundreds of millions developing blockchain systems for use in the $13tn repo market, aiming to modernize legacy processes. Meanwhile, German regulators will increase pressure on insurers to correct failings identified in their burgeoning private credit investments, an asset class where reinsurer Munich Re flagged up to €2.5bn exposure.

Policy, Politics, and Regulatory Shifts

The U.S. and China are maneuvering diplomatically and economically ahead of the planned President Trump-Xi summit this week, with discussions underway regarding substantial American corn purchases by Chinese officials. Beijing is also signaling cooperation by announcing the dismantling of a cross-border drug trafficking network with the U.S. just ahead of the meeting, although Xi is expected to press Trump regarding arms sales to Taiwan which Beijing considers a core interest. In related news, the Trump family’s wealth grew by about $660M following token sales from World Liberty Financial Inc.

In the UK, political uncertainty surrounding Prime Minister Keir Starmer’s tenure deepened, causing long-dated gilt yields to surge to their highest levels since 1998, a plight compounded by high oil prices as noted in the bond market tumble. Conversely, Starmer’s speech promising closer EU ties boosted UK carbon futures, while the government also approved further early funding for power-grid projects amid supply chain competition. Separately, Lotus offered a lifeline to its troubled UK car plant, with the CEO slashing sales targets as part of a revival strategy for the manufacturer controlled by China’s Geely.

The pharmaceutical and consumer goods sectors are adapting to geopolitical and regulatory pressures. Bristol-Myers Squibb inked a potential $15.2bn licensing deal with Jiangsu Hengrui Pharmaceuticals to leverage Chinese R&D, while the EU agreed on a Critical Medicines Act to incentivize domestic production and avoid future pandemic-style shortages. In the U.S. consumer space, Imperial Brands is withdrawing its vaping business due to a prolonged regulatory approval process, while retailers like Walmart and Target invest billions in remodeling physical stores to compete against online traffic.

Technology and AI Race

The contest for AI supremacy remains a central theme, with advanced models from Anthropic and OpenAI extending the U.S. lead over China, which was reportedly denied access to Anthropic’s newest models. The artificial intelligence sector continues to attract vast capital, evidenced by a startup raising $1.3bn to build an alternative AI 'grid' separate from the dominant hardware providers. Concerns over the technology’s dominance are rising in the U.S., where many Americans express dread regarding unstoppable AI, while legal challenges are mounting, with wrongful death lawsuits against OpenAI utilizing consumer product safety laws.

Tech executives are facing scrutiny; Microsoft CEO Nadella described the attempt to remove Sam Altman from OpenAI in 2023 as "amateur city" during testimony related to Elon Musk’s lawsuit. Meanwhile, the growing reliance on AI infrastructure is boosting demand for specialized hardware, with Mitsubishi Heavy Industries forecasting that gas turbine orders will remain strong due to data center build-outs, despite a slight dip expected this year. Separately, shareholders of The Swatch Group AG rejected activist demands for board representation for a second time, reinforcing the controlling Hayek family’s governance structure.