Public Markets 3 Days

Last updated: May 25, 2026, 2:36 AM ET

Energy & Geopolitics

Oil prices slid on hopes for a U.S.-Iran deal as crude futures dropped in early Asian trade, with the prospect of reopening the Strait of Hormuz driving a broad risk-on rotation across commodities. European natural gas also declined on optimism that Washington and Tehran are closing in on an agreement, while a supertanker hauling Iraqi crude out of the Persian Gulf crossed the U.S. blockade line into the Arabian Sea, signaling that normal shipping may resume sooner than expected. The dollar stalled near flat as risk sentiment improved, though gold and silver rose in early trade on the same deal hopes. A supertanker carrying Iraqi crude has exited the Persian Gulf amid ongoing talks, and U.S. Central Command said it redirected 100 commercial vessels during the six-week blockade. President Trump touted progress toward reopening the Strait but warned the Hormuz blockade would remain until a formal agreement is completed. Oil fell again as the U.S. emphasized the blockade would hold, and European gas continued to decline on the same optimism. With fuel prices driven 50% higher by the Strait blockade, U.S. consumers face a looming spending squeeze as Trump-era tax rebates fade, compounding inflation pressure already weighing on factory activity globally. Strategists warned yields may stay elevated even if the Iran war ends, suggesting structural factors are keeping borrowing costs high.

Emerging Markets & Currencies

Emerging-market stocks and currencies rose as oil prices declined, with the Indian rupee strengthening on oil relief and central bank commentary after Reserve Bank of India Governor Sanjay Malhotra said the currency may be undervalued. The Sri Lankan rupee is set to recover from its slide as oil prices ease and the central bank raises interest rates, while a Nifty gauge of government-controlled Indian banks fell 6% this month as Iran war-driven yields hit two-year highs. Indian bond investors are tapping soaring swap rates to juice returns as multi-year highs in fixed-income markets draw fund managers into riskier trades. Meanwhile, China's crackdown on illegal cross-border trading is likely to have limited impact on the yuan, though analysts at Citic warned the latest curbs could affect up to $32 billion of Hong Kong assets. A fresh wave of political turmoil is derailing rallies across emerging markets from Latin America to Eastern Europe, with resurgent political risk roiling EM assets broadly. Indonesia's FTSE Russell removed one of its richest families from global indexes after flagging concentrated shareholding, while the government is expected to lay out its new commodity export policy within weeks.

AI-Fueled Rally & Tech Debt Markets

The AI boom is delivering momentum investors their best returns in decades as the world's hottest stocks power ahead despite Iran war jitters. U.S. tech giants are tapping bond markets as they race to build AI data centres, and an average daily trading volume on Tokyo's prime market almost doubled in 12 months as AI fever and off-exchange trading grip Japanese retail investors. Big Tech dominance is spreading to bond markets, with companies like SpaceX preparing for what could be the largest IPO ever. Two European companies planning major share sales are weighing delays to avoid the expected SpaceX market melee, and OHB and KNDS are among those reconsidering their timetables. Short sellers reaped more than $2.3 billion betting against gambling companies pressured by tax rises and prediction market popularity, while a $3 billion private-placement bond sale by Danaher marked a record for the asset class. The relentless AI enthusiasm is raising concerns that a potential deluge of equity supply could signal a market top.

Japan Fixed Income & Corporate Activity

Japan's government bond market faces homegrown downside risks even as oil retreats, with a gauge of risk compensation for holding JGBs rising fastest among major markets since the Iran war began. Rising yields are deepening the divide between regional bank stocks based on portfolio strength, and Japan's financial regulator urged listed companies to spend cash on growth rather than shareholder returns. The ECB is set to lift its inflation outlook in June and some officials see a strong case for a June rate hike on the back of energy price surges, even as strategists warn bond yields may stay elevated regardless of Iran war resolution. Italy's state lender Cassa Depositi plans to raise its stake in Nexi to as much as 29.9% backing the digital payment company's long-term strategy, while a CVC-led consortium launched a €10.9 billion offer for Italian drugmaker Recordati in a deal that would tighten buyout control of the century-old company. SoftBank tapped retail investors for ¥260 billion in subordinated bonds, its second such offering in two months, while Australia's LNG reservation rule is set to apply to existing contracts, intensifying pressure on producers.

M&A & Strategic Deals

Jardines signaled a strategic pivot with a $2.4 billion Australian radiology deal, its first acquisition since a strategic overhaul, while Bank SMBC Indonesia sold $1.1 billion in pension loans to BTN as it tilts away from legacy business. Stellantis is accelerating partnerships with Chinese competitors to find growth amid a slowing domestic market, and Everlane and Puma are among western consumer brands attracting Chinese buyers as Chinese firms shop abroad for growth. Adecco warned that a Swiss population cap would curb economic growth, and the Bank of Central African States ruled out CFA franc devaluation despite weak growth and low reserves. New Zealand plans to spend $936 million on drones and naval upgrades to shield maritime routes, while the U.S. says its Iran blockade has redirected 100 vessels.