Public Markets 8-Hour Briefing
×Energy & Commodities
Oil futures extended gains a second day as escalating rhetoric over the Iran war raised concerns over a prolonged conflict, outweighing an emergency release of crude reserves by Western nations. Brent crude surged past $90 per barrel after reports of mines in the Strait of Hormuz and nearby cargo ships being struck, while the U.S. and Israel launched fresh strikes against Iran, where crowds mourned military commanders killed in the conflict. The Trump administration plans to release 172 million barrels from the Strategic Petroleum Reserve as part of a coordinated IEA effort to ease surging crude and fuel prices, though the move failed to stem the rally. Meanwhile, Mercuria Energy Group led a rush to withdraw LME aluminum as war cuts supply, with traders bracing for major disruptions to global metals markets.
Public Markets Turmoil
Hedge funds faced their worst drawdown since April's Liberation Day tariff turmoil, as unwinds in crowded trades punished the fast-money cohort, according to JPMorgan strategists. Morgan Stanley capped redemptions from one of its private credit funds, returning less than half of the capital that investors sought to cash out, while Cliffwater followed suit limiting payouts after a wave of withdrawal demands. Ares Management convened a town hall to reassure employees concerned about recent market volatility and emphasize the investment opportunities it created. Pimco's commodity hedge fund plunged 17% this month as the war in Iran rattled oil prices and global markets, according to a person familiar with the matter.
Geopolitical Tensions
The European Union warned that inflation could surpass 3% this year if the Middle East war causes Brent oil prices to remain around $100 per barrel and gas prices stay elevated. Israel bombed targets in Lebanon as the death toll climbed, while the U.S. used up to $4 billion worth of munitions in the first 72 hours of attacks against Iran, including about 400 cruise missiles and 800 air defense interceptors. The Trump administration asked the Supreme Court to end protections for Haitian immigrants and has also sought to end deportation protections for other immigrant groups, including Syrians. Meanwhile, Chubb partnered with the US International Development Finance Corp. on a $20 billion reinsurance backstop aimed at reviving shipping in the Strait of Hormuz, a crucial oil route being disrupted by the conflict.
Corporate & Credit Markets
Salesforce sold debt at a significant premium in a $25 billion bond deal, signaling Wall Street jitters over AI disruption. Banks prepared a $7.15 billion debt offering to help finance Clayton Dubilier & CD&R's buyout of packaging company Sealed Air Corp. In leveraged loan markets, most liquid debt got hit hardest, creating a liquidity paradox as investors rushed for the exits. Argentina missed a window to return to debt markets as ambitious government goals to bring down country risk are at odds with reality, investors say. Bolivia pledged to meet dollar bond payments this month to private bondholders as it looks to swap notes held by local public institutions into local currency debt.
Technology & Innovation
Amazon secured a court ruling allowing it to keep outside AI bots off its site for now, but retailers are preparing for a new normal in shopping as AI shopping wars intensify. Xanadu Quantum Technologies is set to receive C$390 million ($287 in government financial aid to build engineering and domestic manufacturing capabilities for its first quantum computing data center. Investors are joining special purpose vehicles to get a piece of the hottest companies before they go public, though sometimes the funds don't actually own any shares. The Nasdaq proposed changing its index-inclusion policy in a move that would benefit Elon Musk ahead of potential SpaceX and OpenAI IPOs.
Economic Policy & Regulation
The Trump administration started sweeping trade investigations that set the stage for new tariffs, the centerpiece of a push to replace levies struck down by the US. Moody's Ratings lowered its outlook on New York City to negative, citing "sizable and persistent" expected budget gaps. The administration sought extradition of Maduro ally Alex Saab from Venezuela, testing President Trump's sway over the country's new rulers. Meanwhile, Democratic states sued over Trump's demand that colleges provide race data, challenging efforts to ensure institutions aren't using racial preferences in admissions.
Regional Markets
Australia's pension funds boosted currency hedges to cushion their global stock portfolios amid the local dollar's biggest annual surge in five years. South Korea's stock market faced sharp swings as turbulence tested the country's market revival, serving as a reminder that Seoul's reform agenda remains incomplete. Emerging market investors scrambled to reassess interest-rate bets as oil whipsaws, upending one of the best trades in the region. Refiners began balking at eye-watering premiums on available oil barrels, threatening to slow down the flow of the world's most traded commodity as the Middle East war upends energy markets.