Public Markets 3 Days

Last updated: May 18, 2026, 8:33 AM ET

Middle East Tensions & Energy Shockwaves

The Middle East crisis deepened as President Trump warned Iran the clock is ticking, demanding compliance on its nuclear program or facing renewed conflict, while Iran rebuffed his terms and a U.S. Navy blockade on Iranian ports entered its second month. Oil futures settled higher on concerns that the prolonged closure of the Strait of Hormuz would drain global inventories, with crude climbing toward $110 a barrel after back-to-back weekly gains. The International Energy Agency warned that commercial oil inventories are falling at an accelerated pace, while European natural-gas prices broke above €50 per megawatt-hour as traders see little sign of a Middle East resolution. Some 23 tankers have gathered around Iran's Kharg Island, the largest cluster since the blockade began, according to satellite data. The war's economic toll on Americans is already material, with the extra spending on petrol and diesel reaching $40 billion, exceeding the cost of repairing the country's bridges. European LNG imports extended April's decline as cargoes rerouted to Asia, and countries are returning to coal after the Hormuz chokepoint effectively shut down a key energy corridor.

Bond Rout & Equity Jitters

The global bond selloff intensified as war-driven inflation fears and government spending concerns pushed yields to multi-year highs across the U.S., U.K. and Japan. The S&P 500 dropped 0.4% in premarket trading as investors watched to see if Friday's yield spike would persist, while Morgan Stanley strategists warned that equities face a significant pullback if the bond rout derails the AI-driven rally. The 10-year German bund yield hit its highest since 2011, and U.K. gilt yields climbed to levels last seen in 2008, with 30-year gilts matching their 1998 peak. Japan's government bonds joined the global sell-off as its 10-year yield rose well above the Topix dividend yield for the first time since 2007, raising the prospect of a rotation from stocks into bonds once volatility subsides. Eurozone bond yields rose across the curve and the euro could face renewed pressure if long-dated yields climb further. The Czech central bank governor signaled readiness to hike rates if underlying inflation pressures from global risks intensify, while the Czech economy grew faster than expected in the first quarter despite energy price spikes. G7 finance ministers are set to discuss the bond rout as oil-fueled inflation risks overshadow global growth prospects.

Deals, Diversification & Corporate Action

In the largest power deal ever, NextEra Energy agreed to pay about $67 billion in stock for Dominion Energy, creating a utility titan stretching from Florida to Virginia to serve the surging demand from AI data centers. Anglo American sold its Australian steelmaking coal mines for as much as $3.88 billion to Dhilmar Ltd., completing its exit from coking coal and simplifying its portfolio ahead of a potential merger with Teck Resources. SpaceX's mega-IPO is putting a price tag on Wall Street's fear of missing out, with major brokerages doubling their price targets on Kioxia after the Japanese chipmaker gave a stronger-than-expected outlook. Berkshire Hathaway sold roughly $8 billion of Chevron shares as the oil giant's stock hit a record, while amassing a $2.6 billion stake in Delta Airlines. Ryanair suspended its profit guidance after a surge in jet fuel costs, warning of weakening prices and late bookings into the key summer season, and Deutsche Lufthansa is speaking with investors ahead of a potential euro bond sale as fuel stress grows. Commerzbank advised shareholders to reject UniCredit's offer, saying the bid undervalues the bank and lacks a credible strategic plan. Corvex Management called for Whitbread to put Premier Inn up for sale, arguing the company has no credible plan to