Japan's services PMI fell to 51.0 in April from 53.4, an 11-month low, as Middle East war costs drove input inflation to a 42-month high and business confidence hit its lowest since the pandemic. Summary:The S&P Global Japan Services PMI fell to 51.0 in April from 53.4 in March, marking the softest rate of expansion in 11 months and a 13th consecutive month of growth, according to S&P GlobalInput costs rose at the sharpest rate in 12 months in April, with the Middle East war cited as a key driver, particularly for fuel; output charges rose at the third-steepest rate since the survey began in September 2007, per S&P GlobalNew orders expanded at the slowest pace since October 2025, with new export business falling for the first time in five months, partly attributed to war-related uncertainty weighing on overseas demand, according to S&P GlobalThe Japan Composite PMI Output Index slipped from 53.0 in March to 52.2 in April, the softest reading of 2026 to date, with services weakness offsetting the quickest rise in manufacturing output in over 12 years, per S&P GlobalInput cost inflation across the composite hit a 42-month high in April, while selling prices rose at the fastest rate on record, suggesting an acceleration in official inflation in coming months, according to S&P Global Economics Associate Director Annabel FiddesBusiness confidence was the second-lowest since the pandemic, lifting only marginally from March's post-pandemic low, with ongoing uncertainty over the war and its cost and demand implications cited as the primary drag, per S&P GlobalJapan's services sector expanded at its slowest pace in 11 months in April, as the economic fallout from the Middle East war drove input costs to their highest in three and a half years and pushed business confidence to near its lowest level since the Covid-19 pandemic, according to the latest S&P Global Japan Services PMI survey.The headline Services Business Activity Index fell to 51.0 in April from 53.4 in March, remaining above the 50.0 threshold that separates expansion from contraction and extending the current growth streak to 13 consecutive months. However, the pace of that growth was the most marginal since May 2025, and the data pointed to a services sector increasingly squeezed between weakening demand and accelerating cost pressures driven by the conflict in the Gulf.New orders expanded at the slowest rate since October 2025, with firms reporting that uncertainty related to the war and elevated prices had weighed on sales. Export business fell for the first time in five months, albeit modestly, as overseas demand for Japanese services softened. Finance and insurance and transport and storage were the strongest-performing sub-sectors within the survey, but the broader picture was one of deceleration.The cost picture was more alarming. Average input prices rose at the sharpest rate in 12 months, with fuel costs linked to the Middle East war cited explicitly as a key driver. Firms responded by passing on higher costs to clients, with output charges rising at the third-steepest rate recorded since the survey began in September 2007. S&P Global warned that the pricing data points to an acceleration in Japan's official inflation rate in the months ahead, a development that will carry significant implications for the Bank of Japan's policy path.The composite picture, combining services and manufacturing, showed the Japan Composite PMI Output Index easing from 53.0 in March to 52.2 in April, its softest reading of the year to date. Strikingly, the composite masked sharply divergent sectoral trends: services growth was the weakest in months, while manufacturing output rose at the fastest rate in over 12 years, driven partly by front-loading as firms sought to build inventory buffers ahead of anticipated war-related supply disruptions.Across the composite, input cost inflation hit a 42-month high and selling prices rose at the fastest rate on record, a combination that Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, described as suggestive of a coming acceleration in official inflation. Fiddes noted that business confidence slipped to its lowest since the pandemic in August 2020, with firms citing the war, the risk of further price increases, and the possibility of softer customer demand as the primary sources of uncertainty weighing on their year-ahead outlook.Employment continued to rise modestly across the services sector, at a pace broadly in line with March, and capacity pressures showed some signs of easing as backlog growth slowed to its softest rate in 14 months. But those relatively stable labour market signals sat in uncomfortable contrast with a confidence reading that is flashing a more cautious message about where Japanese services activity is headed as the Middle East conflict shows no sign of abating.--- The combination of slowing services activity and record-pace selling price inflation is a stagflationary signal that complicates the Bank of Japan's policy calculus at a moment when markets are already pricing a June rate hike on the back of this morning's wage data. Input cost inflation hitting a 42-month high, driven explicitly by Middle East war-related fuel costs, is a direct transmission mechanism from the Gulf conflict to Japanese consumer prices, and S&P Global's warning that official inflation could accelerate in coming months will add urgency to the BOJ's deliberations. For energy markets, the data provides further evidence that the Iran conflict is generating measurable demand-side disruption in Asia's second-largest economy, with business confidence at its lowest since the pandemic suppressing the kind of activity growth that would otherwise support fuel consumption. The divergence between a services sector slowing to its weakest in 11 months and a manufacturing sector posting its strongest output growth in over 12 years, partly driven by front-loading ahead of anticipated supply disruptions, creates an uneven demand picture that traders in both crude and refined products will need to navigate carefully. This article was written by Eamonn Sheridan at investinglive.com.

Morgan Stanley targets $5,200 gold this year, driven by ETF buying, China accumulation and 2027 Fed cuts, but warns the Iran conflict has exposed gold as a rates trade, not a safe haven.Summary:Morgan Stanley has set a gold price target of $5,200 per ounce for later this year, driven by resumed central bank and ETF purchases and expectations of Federal Reserve rate cuts, per the bank's research noteGold has fallen 14.5% since the Iran conflict began, underperforming the FTSE All-World, down 9%, and the S&P 500, down 7.8%, according to Morgan StanleyMorgan Stanley argues gold is reacting to rates rather than geopolitics, with higher oil prices feeding inflation fears, suppressing Fed cut expectations, lifting real yields and thereby weighing on the metal, per the noteCentral banks and ETFs paused or reversed gold purchases after the conflict began, with some selling aggressively, according to Morgan StanleyThe bank's bullish longer-term case rests on ETFs resuming purchases, China recommencing reserve accumulation, a weakening US dollar and expected Fed rate cuts of 25 basis points each in January and March 2027, per Morgan StanleyMorgan Stanley concludes that monetary policy has become more important for gold pricing than geopolitical events, describing the metal as increasingly a real rates trade rather than a fear trade, per the note Gold has fallen sharply since the Iran conflict began, and Morgan Stanley argues that decline is not an anomaly but a signal: the metal's oldest role as a safe haven in times of geopolitical stress has been eclipsed by its sensitivity to real interest rates, a shift with lasting implications for how investors should position around it.Since the outbreak of the Iran conflict, gold has lost 14.5% of its value, a performance that places it below both global and US equities over the same period. The FTSE All-World has fallen 9% and the S&P 500 has declined 7.8%, meaning gold has not only failed to provide the protection investors traditionally expected of it but has actively underperformed the risk assets it was supposed to hedge against. Morgan Stanley's analysis of that underperformance traces a direct line through the interest rate channel.The bank's reasoning runs as follows: elevated oil prices generated by the conflict have intensified inflation fears, which in turn have reduced market expectations for Federal Reserve rate cuts, pushing real yields higher. Higher real yields increase the opportunity cost of holding gold, which generates no income, and the metal has repriced accordingly. In Morgan Stanley's framing, monetary policy has become a more powerful force for gold than war itself, a conclusion that breaks sharply with decades of conventional wisdom about the metal's behaviour.A secondary headwind has come from institutional buyers stepping back. Central banks and exchange-traded funds, which had been consistent and at times aggressive buyers of gold in the years prior, paused purchases after the conflict began, with some selling the metal outright. The removal of that structural bid amplified the rate-driven selloff and left gold without the floor that official sector buying had previously provided.Despite all of that, Morgan Stanley remains bullish on the metal over the longer term and has set a price target of $5,200 per ounce for later this year. The bank's constructive case rests on several developments it expects to materialise: ETFs have begun buying again, China has resumed accumulating gold reserves, the US dollar is weakening, and the Federal Reserve is expected to deliver two 25 basis point rate cuts, in January and March of 2027. Each of those factors, if they develop as Morgan Stanley anticipates, reduces the real yield headwind and restores the demand dynamics that drove gold's multi-year rally before the conflict disrupted them.The broader takeaway from the note is a structural one. Gold, Morgan Stanley argues, is no longer primarily a fear trade triggered by geopolitical events. It has become a real rates trade, one that responds to the monetary policy implications of those events rather than the events themselves. For investors who bought gold as insurance against exactly the kind of conflict now unfolding in the Gulf, that is a significant and uncomfortable reassessment.----The reframing of gold as a real rates trade rather than a geopolitical hedge has significant implications for how energy and commodity desks should model the metal's behaviour during the current Gulf conflict. If Morgan Stanley's thesis holds, oil price spikes that stoke inflation fears and suppress Fed cut expectations will continue to weigh on gold even as the underlying geopolitical environment deteriorates, inverting the traditional safe haven logic that many traders still rely on. The bank's $5,200 target is contingent on a chain of events, including resumed ETF and central bank buying, a weakening dollar and Fed cuts in early 2027, that are far from guaranteed and sit in tension with a higher-for-longer rate environment. China's resumption of reserve accumulation is the wildcard: if that buying proves sustained and broad-based, it could override the real yield headwind that has suppressed the metal since the conflict began. For now, gold's 14.5% decline since the Iran conflict started is a data point that will force a rethink across desks that had positioned the metal as a hedge against exactly this kind of event. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

Paul Tudor Jones says the AI bull market has one to two years left, likens the moment to 1999, and warns the eventual correction could be breathtaking; he has added to AI stock positions. Info via CNBC. Summary:Paul Tudor Jones said the AI-driven bull market still has one to two years to run and that he has recently added to AI-related stock positions, according to comments made on CNBC's Squawk BoxJones compared the current phase of AI development to Microsoft's early software dominance in the 1980s and the commercialisation of the internet in the mid-1990s, periods he described as productivity miracles lasting four to five and a half years, per CNBCThe hedge fund manager said the current moment feels like 1999, approximately a year before dot-com share prices peaked in early 2000, and warned that when the bull market ends the drawdown could be significant, according to CNBCJones estimated the AI productivity cycle is roughly 50 to 60 percent complete, and said a further 40 percent rally in equities could push the market-to-GDP ratio to 300 to 350 percent, setting up what he called breathtaking corrections, per the CNBC interviewJones said governments will ultimately need to regulate AI and expressed personal concern about the technology becoming dangerous to humanity if left unchecked, according to CNBCJones is founder and chief investment officer of Tudor Investment and shot to prominence after predicting and profiting from the 1987 Black Monday crash, per CNBCPaul Tudor Jones, one of the most closely watched macro investors in the world, has said the artificial intelligence bull market still has between one and two years left to run, and that he has added to AI-related stock positions as he searches for historical parallels to frame the current cycle.Speaking on CNBC, Jones compared the trajectory of AI development to two earlier technological revolutions: the rise of Microsoft and personal computing software in the early 1980s, and the commercialisation of the internet that accelerated in the mid-1990s alongside the launch of Windows 95. Both periods, Jones argued, gave rise to productivity miracles that sustained market gains for four to five and a half years. On that basis, he estimated the current AI cycle is somewhere between 50 and 60 percent complete, leaving meaningful runway before the boom exhausts itself.The comparison that will attract most attention, however, is the one Jones drew to 1999. The billionaire founder and chief investment officer of Tudor Investment said the current market environment continues to feel like the final phase of the dot-com bubble, approximately a year before technology share prices peaked in early 2000. The analogy is a deliberate one: Jones is not simply endorsing the rally but flagging the nature of what comes after it.His warning on the eventual correction was pointed. Jones suggested that if equities were to rise a further 40 percent from current levels, the ratio of stock market capitalisation to GDP could reach somewhere between 300 and 350 percent, a level he described as setting up breathtaking corrections. The severity of that framing sits in deliberate tension with his decision to add exposure, reflecting the calculus of a macro trader who believes he can navigate the exit.Jones said he buys baskets of stocks rather than individual names, and declined to specify which AI-related positions he added or when the purchases were made. He acknowledged the moment as extraordinary, describing it as a crazy, crazy time shaped by his preference for finding historical precedents.Beyond the near-term market call, Jones flagged a longer-term concern about the technology itself. He said governments will ultimately be required to step in with regulation and expressed personal worry about artificial intelligence becoming dangerous to humanity if development continues without meaningful oversight. That warning, while not central to his market thesis, adds a dimension to his thinking that goes beyond the trade.---Jones's public addition to AI positions will carry weight given his track record and macro credibility, and his framing of the current cycle as roughly 50 to 60 percent complete provides a loose but influential timeline for institutional investors calibrating their own exposure. The 1999 comparison cuts both ways: it validates the bull case for another year or two of upside while simultaneously flagging the severity of what follows, and the prospect of a correction from a market-to-GDP ratio of 300 to 350 percent is a number that risk managers will take seriously. For energy and commodity markets, a sustained AI infrastructure build implies continued heavy power demand, data centre construction and chip supply chain investment, all of which carry significant physical commodity implications. The warning on regulation, though not new, adds a tail risk dimension that markets have largely chosen to discount. This article was written by Eamonn Sheridan at investinglive.com.

Japan's real wages rose 1.0% in March, a third straight monthly gain; total cash earnings rose 2.7% against a 3.2% consensus and prior; BOJ rate decision due June 15-16.Summary:Japan's inflation-adjusted real wages rose 1.0% year on year in March, a third consecutive month of gains, according to government data released FridayTotal cash earnings rose 2.7% year on year, missing the consensus estimate of 3.2% and slowing from a revised 3.4% gain in February, per government dataOvertime pay rose 1.9% year on year in March, per the government releaseRegular pay, or base salaries, grew 3.2% in March, easing from a revised 3.4% rise in February, with full-time worker base salary growth exceeding 3% for a third straight month, according to the dataSpring wage negotiations resulted in pay increases of above 5% for a third consecutive year, per ReutersThe consumer inflation rate used to calculate real wages stood at 1.6% in March, below the BOJ's 2% target for a third consecutive month, with government subsidies helping offset weak yen and elevated oil price pressures, according to ReutersNearly two-thirds of economists polled by Reuters expect the BOJ to raise its benchmark rate to 1.0% by end-June, with the next policy review scheduled for June 15-16 Japan's real wages rose for a third consecutive month in March, government data showed on Friday, delivering the kind of sustained pay growth the Bank of Japan has identified as a prerequisite for further interest rate increases and sharpening focus on the central bank's June policy meeting.Inflation-adjusted wages climbed 1.0% year on year in March, easing from a revised 2.0% gain in February but comfortably above the 0.7% rise recorded in January, which had marked the first real pay increase in 13 months. The sustained sequence of gains reflects a labour market that is translating nominal wage momentum into real purchasing power, a combination the BOJ has said it needs to see before moving again on rates.Total cash earnings, the broadest measure of nominal wages, rose 2.7% year on year. That came in below both the consensus estimate and the prior reading of 3.2%, with the slowdown partly attributed to a sharp reversal in special payments, which fell 1.5% in March after a revised 7.5% surge in February. Special payments consist primarily of one-time bonus payments and can introduce significant volatility into the monthly headline figure.Stripping out that volatility, the underlying picture remains solid. Base salaries grew 3.2% in March, just fractionally below February's revised 3.4%, and full-time workers saw base pay growth exceed 3% for a third straight month. Overtime pay rose 1.9%. The spring wage negotiation round, known as shunto, delivered increases of above 5% for a third consecutive year, providing the structural foundation beneath the monthly data.Consumer inflation, as measured by the index the labour ministry uses to calculate real wages, stood at 1.6% in March, remaining below the BOJ's 2% target for a third consecutive month. Government energy subsidies have been suppressing the headline reading by partially offsetting the twin pressures of a weak yen and elevated oil prices driven by the ongoing Iran conflict.The BOJ's next rate decision falls on June 15-16, and the central bank has been explicit that it views sustained wage and price growth as the conditions under which further normalisation would be justified. With nearly two-thirds of economists surveyed by Reuters now expecting a rate rise to 1.0% by end-June, Friday's data will be read as tilting the balance further in that direction. The moderation in the March print from February's pace gives the BOJ flexibility to proceed carefully, but the three-month trend leaves it with little grounds to argue the conditions for a hike have not been met. ---A third consecutive month of real wage growth is precisely the data sequence the Bank of Japan has said it needs to justify further policy normalisation, and the June 15-16 meeting now looks live in a way it did not before this release. With nearly two-thirds of economists already pencilling in a rate rise to 1.0% by end-June, today's print reduces the BOJ's justification for delay. Yen-sensitive commodity markets, including oil importers and energy traders pricing Japanese demand, will note that a hawkish BOJ trajectory implies a firmer yen over time, which would partially offset the import cost pressure that a weak currency and elevated oil prices have been generating. The moderation in real wage growth from February's revised 2.0% to 1.0% provides the BOJ with room to move cautiously rather than aggressively, but the direction of travel is now well established. The persistence of spring wage negotiations delivering above 5% increases for a third consecutive year gives the central bank confidence that nominal wage gains are structural rather than episodic. This article was written by Eamonn Sheridan at investinglive.com.

Deutsche Bank warns markets are pricing the Iran conflict inconsistently across equities, rates and credit, with long-run inflation faith looking increasingly difficult to sustain. Summary:Deutsche Bank notes a clear repricing across markets since the Iran conflict began, but identifies significant inconsistencies across asset classes and regions, according to the bank's research noteUS Treasury yields have closely tracked oil prices since the conflict began, but equities diverged after an initial correlation, with equities appearing to price in a temporary shock while rates markets price in a more protracted conflict, per Deutsche BankCentral bank pricing is described as inconsistent on a relative basis, with markets expecting the Federal Reserve to hold rates for the next 12 months while simultaneously pricing in up to three ECB rate hikes by March, despite the US having stronger growth and higher core inflation, according to the noteBoth high-yield and investment-grade credit spreads in the US and Europe are tighter now than before the Iran conflict began, despite an energy shock, weaker growth expectations and a hawkish shift in central bank pricing, per Deutsche BankThe bank warns that markets have retained a remarkable degree of faith in longer-term inflation remaining anchored around target, despite another energy shock, several years of above-target inflation and a persistent historical upward bias in price pressures, according to the research noteFinancial markets have repriced significantly since the Iran conflict began, but the signals they are sending are contradictory and in several cases very difficult to reconcile, according to a research note from Deutsche Bank. The bank has identified a series of inconsistencies across equities, fixed income, credit and central bank pricing that suggest investors have not yet converged on a coherent view of how the conflict will evolve or what it will mean for inflation and growth.The most striking divergence Deutsche Bank highlights is between equity markets and rates. Since the conflict began, US Treasury yields have moved in close alignment with oil prices, suggesting bond markets are pricing in a sustained inflationary shock consistent with a protracted conflict. Equity markets told a similar story initially, but have since decoupled, implying that stock investors have settled on a view that the disruption will prove temporary. Both assessments cannot simultaneously be correct, and Deutsche Bank's note frames the gap as a live tension rather than a resolved debate.Central bank pricing adds a further layer of contradiction. Markets are currently positioned for the Federal Reserve to keep rates on hold for the next 12 months, while also pricing in the possibility of the European Central Bank hiking rates as many as three times by March. Deutsche Bank finds this relative pricing hard to justify given that the US economy is running with stronger growth and higher core inflation than the eurozone. The implication is that one side of that trade is mispriced, with consequences for dollar assets and rate-sensitive sectors if the gap corrects.In credit markets, the picture is arguably the most counterintuitive. Both high-yield and investment-grade spreads in the US and Europe are currently tighter than they were before the Iran conflict began. That is a compression in perceived credit risk at a moment when an energy shock is bearing down on corporate costs, growth forecasts have been revised lower, and central bank pricing has shifted in a more hawkish direction. Deutsche Bank does not offer a definitive explanation for the tightening but presents it as evidence of broader market inconsistency.Underlying all of these anomalies, the bank argues, is what it characterises as a remarkable and perhaps unwarranted degree of faith among investors that long-run inflation will remain anchored around target. That faith has persisted through another energy price shock, a prolonged period of above-target inflation stretching back several years, and what Deutsche Bank describes as a persistent historical tendency for price pressures to surprise to the upside. Whether that confidence is justified or represents the final piece of a mispricing that will eventually correct is, the note implies, one of the more consequential open questions facing markets right now.-The inconsistencies Deutsche Bank has identified point to markets that are still in the process of digesting a conflict shock rather than having reached a stable new equilibrium, which itself creates trading risk. The divergence between equity and rates pricing is particularly pointed: if bond markets are correct that the Iran conflict is protracted and inflationary, equity valuations built on a temporary-shock assumption face a material correction. Credit spread tightening, against a backdrop of an energy shock and downgraded growth, suggests investors are either complacent or front-running a policy pivot that central bank pricing does not yet support. Oil traders should note that the broader repricing dynamic Deutsche Bank describes has not yet fully fed through to energy-exposed assets, leaving room for a sharper adjustment if the conflict extends or intensifies. This article was written by Eamonn Sheridan at investinglive.com.

Iran and the US exchanged missiles and more:Reports filtering in that Iran launched missiles at US Navy shipsUS strikes Bandar Abbas and Qeshm as Gulf tensions surge past ceasefireUS CENTCOM says US destroyers repelled Iranian attack in Strait of HormuzSeparate reports out of Israel and Iran says hostilities have ceased. For now at least. This article was written by Eamonn Sheridan at investinglive.com.

A US trade court struck down Trump's 10% global tariffs 2-1, ruling the duties were not justified under a 1970s trade law; the White House had cited a $1.2 trillion goods trade deficit as grounds. Summary:The US Court of International Trade ruled 2-1 against President Trump's 10% global tariffs, finding they were not justified under the Trade Act of 1974, per the court rulingThe tariffs took effect on February 24 after Trump invoked Section 122 of the 1974 Act, which permits duties for up to 150 days to address balance-of-payments deficits or dollar depreciation risks, per the court filingThe court found the law was not an appropriate instrument for the type of trade deficits Trump cited, according to the rulingThe Trump administration had argued a serious balance-of-payments deficit existed, pointing to a $1.2 trillion annual goods trade deficit and a current account deficit of 4% of GDP, per the administration's legal submissionsThe case was brought by small businesses who argued the tariffs were an attempt to circumvent a Supreme Court decision that struck down Trump's 2025 tariffs under the International Emergency Economic Powers Act, per court documentsOne dissenting judge said it was premature to grant victory to the small business plaintiffs, according to the rulingA federal trade court has struck down President Donald Trump's 10% global tariffs, ruling in a 2-1 decision that the duties were not legally justified under the 1970s trade legislation the administration used to impose them, in a significant blow to one of the White House's central economic policy instruments.The US Court of International Trade found in favour of a group of small businesses that challenged the tariffs after they took effect on February 24. Trump had issued the February order under Section 122 of the Trade Act of 1974, a provision that allows a president to impose duties for a period of up to 150 days to correct serious balance-of-payments deficits or to head off an imminent depreciation of the dollar. The court determined that the law was not an appropriate tool for the kind of trade imbalances Trump cited when issuing the order.The administration had mounted a robust defence of the tariffs, arguing that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual goods trade deficit and a current account deficit equivalent to 4% of gross domestic product. That argument did not persuade the majority of the panel, though one dissenting judge argued it was premature to hand victory to the small business plaintiffs, leaving the door open for a more protracted legal dispute.The small businesses behind the challenge had framed the February tariff order as an attempt by the administration to sidestep an earlier Supreme Court decision that struck down Trump's 2025 tariffs, which had been imposed under the International Emergency Economic Powers Act. By reaching for a different statutory authority, the White House sought to put its tariff policy on firmer legal ground, a strategy the trade court has now rejected.The ruling will be welcomed by import-dependent businesses and global supply chain operators who have faced rising costs since the duties came into force. The Trump administration is widely expected to appeal, meaning the legal status of the tariffs is unlikely to be resolved swiftly. Until a higher court issues a definitive ruling, companies will face continued uncertainty over whether the duties will ultimately stand, complicating investment decisions and supply chain planning across a wide range of sectors.It's a bit of a challenge trying to keep up with all these stuff ups. ---The ruling introduces immediate legal uncertainty over a tariff regime that has been a central pillar of the Trump administration's trade policy and a persistent source of cost pressure for businesses reliant on global supply chains. A successful challenge on the grounds of statutory overreach narrows the legislative tools available to the White House for imposing broad-based duties, and markets will reassess the durability of the entire tariff architecture if the ruling survives appeal. For energy traders, the significance lies in the downstream implications: import-dependent industries facing lower tariff costs may see input price relief, while the prospect of a less aggressive trade posture could ease some of the demand destruction fears that have weighed on oil price forecasts. The 2-1 verdict leaves room for appeal, meaning the uncertainty is unlikely to resolve quickly, and companies will be cautious about adjusting supply chain strategies until a higher court rules. This article was written by Eamonn Sheridan at investinglive.com.

Iran fired missiles, drones and small boats at three US Navy destroyers in the Strait of Hormuz; no US assets were hit; Centcom struck Iranian launch sites, command posts and surveillance nodes in response.Summary:US Central Command confirmed Iranian forces launched missiles, drones and small boat attacks against USS Truxtun, USS Rafael Peralta and USS Mason as the three guided-missile destroyers transited the Strait of Hormuz, per CentcomCentcom described the Iranian attack as unprovoked and said US forces responded under the right of self-defence, per the official statementNo US assets were struck during the engagement, according to CentcomIn response, US forces eliminated inbound threats and targeted Iranian military facilities including missile and drone launch sites, per CentcomCommand and control locations and intelligence, surveillance and reconnaissance nodes were also struck, according to the Centcom statementThe destroyers were transiting from the Strait of Hormuz to the Gulf of Oman when the attack occurred, per CentcomUS Central Command has confirmed that Iranian forces mounted a coordinated, unprovoked attack on three American guided-missile destroyers as they transited the Strait of Hormuz, and that US forces responded with strikes on Iranian military infrastructure responsible for the assault.According to Centcom, USS Truxtun, USS Rafael Peralta and USS Mason were passing through the international sea passage en route to the Gulf of Oman when Iranian forces launched a simultaneous barrage of missiles, drones and small boats against the convoy. The use of all three attack methods in combination points to a deliberate and coordinated military operation rather than an opportunistic engagement, and represents one of the most direct Iranian military actions against US forces in the Gulf in recent memory.Centcom stated that no US assets were struck during the attack, crediting the interception of inbound threats as part of the defensive response. US forces then moved beyond defence, striking Iranian military facilities that Centcom identified as directly responsible for the attack. Targets included missile and drone launch sites, command and control locations, and intelligence, surveillance and reconnaissance nodes, a target set that suggests the US sought to degrade the operational architecture behind the attack rather than simply respond in kind.The geography of the incident carries enormous weight. The Strait of Hormuz is the single most critical chokepoint in global energy markets, with approximately a fifth of the world's seaborne oil supply passing through its waters daily. A direct military exchange between Iranian and US forces inside or adjacent to that passage will be treated by energy markets, shipping operators and regional governments as a fundamental change in the risk environment, regardless of whether the strait remains physically open in the immediate term.Centcom's framing of the Iranian action as unprovoked is notable given the broader context of US strikes on Bandar Abbas and Qeshm Island reported earlier, and the competing Iranian narrative that positions its actions as a response to American aggression. The gap between those two accounts will matter enormously in the hours ahead as governments, markets and military planners attempt to assess the trajectory of events. What is not in dispute is that US and Iranian forces have now exchanged fire in the Strait of Hormuz, and that the United States has struck Iranian military targets on multiple fronts in a single operational period.----Centcom's confirmation that Iranian forces mounted a coordinated assault using missiles, drones and small boats against US naval assets in the Strait of Hormuz removes any ambiguity about the nature of the confrontation now underway in the world's most consequential oil passage. The targeting of Iranian missile and drone launch sites, command and control infrastructure, and surveillance nodes indicates the US struck with breadth and intent, not merely in token retaliation. Energy markets will register this as a structural shift in Gulf risk rather than an isolated incident. With three guided-missile destroyers transiting the strait under fire, the viability of commercial and tanker passage through Hormuz is now a live operational question, and shipping insurers will move immediately to reprice war risk coverage for the region. The US insistence that no assets were struck may offer brief reassurance but does nothing to reduce the underlying threat level now established in the strait. This article was written by Eamonn Sheridan at investinglive.com.

US military strikes hit Iran's Bandar Abbas and Qeshm Island; Iran claims it fired missiles at three US destroyers and launched drones; explosions reported in Abu Dhabi. Summary:The US military struck the Iranian port city of Bandar Abbas and Qeshm Island in the Strait of Hormuz, according to an American official speaking to Fox NewsA senior US official stated the strikes are not a restart of the war and do not represent an end to any ceasefire, per the same sourceIran’s top military joint command says the US violated the ceasefire by targeting two Iranian oil tankers near the Strait of Hormuz and carrying out air attacks on civilian areas along Iran’s southern coast with the cooperation of “some regional countries.”Iranian state media confirmed explosions in both Bandar Abbas and Qeshm IslandIran claimed it launched missiles at three US destroyers and deployed suicide drones, per Iranian state media reportsAn explosion was reported in Abu Dhabi in the United Arab Emirates, according to available reportsAnti-aircraft fire was reported over Tehran, per circulating reportsThe United States military has carried out strikes on the Iranian port city of Bandar Abbas and Qeshm Island, located in the northern reaches of the Strait of Hormuz, in a sharp escalation of tensions in the Gulf that marks a dangerous new phase in the confrontation between Washington and Tehran.An American official confirmed the strikes to Fox News, while a senior US official sought to contain the diplomatic fallout by insisting the action does not constitute a resumption of war and does not signal an end to any existing ceasefire. That framing deserves scrutiny. Strikes on sovereign Iranian territory using military force are, by any conventional measure, an act of war, and the official's insistence to the contrary reflects a pattern of linguistic management designed to limit political consequences rather than describe operational reality.Iranian state media confirmed that explosions struck both Bandar Abbas and Qeshm Island. Tehran then reported that it had responded, claiming to have fired missiles at three US destroyers in the Gulf and deploying suicide drones as part of its counter-action. If confirmed, that represents a direct Iranian military engagement with US naval assets, a threshold that carries severe escalatory potential.The geography of the strikes is significant. Bandar Abbas is Iran's principal commercial and naval port, and Qeshm Island sits at the entrance to the Strait of Hormuz, through which approximately 20 percent of the world's seaborne oil supply transits daily. Any military activity in or around that corridor will be interpreted by energy markets as a direct threat to global supply.Further complicating the picture, an explosion was reported in Abu Dhabi in the United Arab Emirates, raising the possibility that the conflict is already spilling beyond Iranian and US military assets into Gulf state territory. Separately, anti-aircraft fire was reported over Tehran, suggesting that the Iranian capital itself is under some form of aerial threat.The speed and geographic spread of these events suggest a rapidly deteriorating security situation across the Gulf region. The White House's semantic insistence that hostilities do not constitute war is unlikely to provide meaningful reassurance to markets, shipping operators, or regional governments now watching events unfold in real time. ----- The strikes represent a sharp and sudden escalation in Gulf risk, with Hormuz, the world's most critical oil chokepoint, now a confirmed active theatre of military operations. Any sustained disruption to navigation through the strait would immediately threaten roughly a fifth of global seaborne crude supply, and markets can be expected to price in a sharp risk premium. The reported explosion in Abu Dhabi introduces a UAE dimension that widens the threat perimeter beyond Iranian territory and into the heart of Gulf infrastructure. Anti-aircraft fire over Tehran suggests the Iranian capital itself is under some form of aerial pressure, raising the prospect of a broader Iranian state response. The official US framing that their strikes do not constitute a resumption of war will do little to calm traders; markets price events, not semantics. This article was written by Eamonn Sheridan at investinglive.com.

Reports filtering in that Iran launched missiles at US Navy shipsNASDAQ and S&P closed lower. No record close todayFed's Williams: There's a lot of uncertainty in the economy right nowTrump: Agreed to give Von Der Leyen until July 4 to fulfill trade agreementMexico central bank cuts rates but signals caution aheadUS crude oil futures settle at $94.81More from Fed's Hammack: I need to keep an open mind about the next policy moveECB Schnabel: Some damage from Iran War will be hard to reverseWSJ: Saudi Arabia and Kuwait lift restrictions on US military use of bases.Fed' Daly: Committed to bringing inflation back to Fed's 2% targetCrude oil moving off of low levels and back toward the next target at the $95 areaIran can outlast Trump's Hormuz blockade for monthsNY Fed Survey of consumer expectations:1Y inflation higher @ 3.6% vs 3.4%. 5Y steady at 3%Fed's Hammack: I see a lot of uncertainty in economic outlookUS construction spending for March 0.6% versus 0.2% estimateGeopolitical Tensions Push Oil Trading Higher in Q1, easyMarkets ReportsUS productivity preliminary for Q1 0.8% versus 1.0% estimate.US initial jobless claims 200K vs 205K estimateinvestingLive European markets wrap: Dollar, oil prices drop further on US-Iran hopeThe U.S. dollar moved higher helped who is tired home how are you for against the major currencies today. The greenback strengthened against the Euro (+0.14%), British pound (+0.26%), Australian dollar (+0.33%), New Zealand dollar (+0.24%)Japanese yen (+0.32%), Swiss franc (+0.19%), and Canadian dollar (+0.17%), With those currencies gaining on the day. The US Dollar Index (DXY) edged up 0.17% to 98.193, reflecting a modest overall gain for the dollar on the day, though the moves were relatively contained across the board with no outsized swings in any single pair.After riding a wave of optimism tied to U.S.-Iran peace deal hopes that drove all three major indices to record closes on Wednesday, Wall Street gave back some of those gains on Thursday. The S&P 500 fell 0.38% to close at 7,337.11, the Nasdaq Composite slid 0.13% to 25,806.20, and the Dow shed 313.62 points, or 0.63%, settling at 49,596.97 — snapping their record-close win streaks after all three had briefly touched fresh intraday all-time highs earlier in the session. The pullback was broad-based. The S&P 500 was dragged lower by losses in Amazon and semiconductor stocks such as Broadcom and Micron, while the Dow was weighed down by Caterpillar (-3.37%) and JPMorgan (-2.74%), falling further away from retaking the 50,000 mark. The Russell 2000 was the hardest hit, closing down 1.74% as industrials, energy, and healthcare stocks sagged.Lingering uncertainty around the Iran situation contributed to the afternoon reversal, as Iran continued to assess and criticize, the U.S. memorandum to end the war and restore tanker flows through the Strait of Hormuz, keeping traders cautious. Earnings were a mixed bag — strong results from Datadog (+28%) and Fortinet (+15%) weren't enough to offset the broader drag, with Shake Shack's near-30% plunge serving as the session's most jarring headlineFed speak today leaned hawkish overall as policymakers continued to emphasize elevated inflation risks, geopolitical uncertainty, and a still-resilient labor market. Cleveland Fed President Hammack said there is “a lot of uncertainty” surrounding the economic outlook and argued the Fed should remain patient and neutral rather than signaling a clear easing bias. She added that rates may need to stay on hold for “quite some time” and warned that the Iran conflict could create more persistent inflation pressures while also weighing on growth. San Francisco Fed President Daly reiterated the Fed’s commitment to returning inflation to its 2% target and stressed that policymakers cannot become complacent as higher oil prices and geopolitical tensions threaten to complicate the inflation outlook.New York Fed President Williams struck a more balanced tone, acknowledging significant uncertainty but emphasizing that the US economy and labor market have remained relatively resilient. He also noted that rates are not historically high, a comment markets interpreted as slightly less hawkish than some of his peers, although he stopped short of signaling any imminent shift toward easing.Separately, ECB Executive Board member Schnabel delivered a notably hawkish message, warning that some of the economic damage from the Iran war “will be hard to reverse.” She cautioned that markets may be underestimating the long-term inflation risks tied to higher energy costs, renewed supply-chain disruptions, and rising inflation expectations. Schnabel also warned that waiting for wage pressures to fully emerge before reacting could be “too late,” reinforcing expectations that the ECB could remain biased toward additional tightening if geopolitical-driven inflation pressures broaden further across the eurozone economy. This article was written by Greg Michalowski at investinglive.com.

The good vibes are continuing to deteriorate. Reports out of the Middle East are that Iran attacked US missile destroyers after the US attacked Iranian tankers. Additionally, Iranian TV is reporting anti aircraft activity in Northwest Tehran, but also explosions due to air defense system tests. Fog of war! This article was written by Eamonn Sheridan at investinglive.com.

A couple of lower tier items due from Japan is about it. Asia markets will likely be contyent to await the US jobs data. Trump has already given us a clue:investingLive Asia-Pacific FX news wrap: Trump has seen the NFP number and he is happy This article was written by Eamonn Sheridan at investinglive.com.

The major US stock indices are closing lower today. The S&P and NASDAQ indices closed higher two straight days and closed at record levels as well. Although the S&P and NASDAQ indices both made new all-time intraday highs at 7385.02 and 26036.38 respectively, the gains cannot be sustained.Dow industrial average fell -314.04 points or -0.63% at 49601.95. For the 2nd day in a row, the index traded above the 50,000 level, but could not sustain momentumS&P index fell -28.03 points or -0.3% at 7337.10.NASDAQ index fell -32.75 points or -0.13% at 25806.20Russell 2000 also closed below record levels for the 1st time in 3 days with a decline of -47.14 points or at -1.63% at 2839.62.The bigger losers today included:Shake Shack Inc: -28.27% Tapestry: -12.41% Whirlpool: -11.89% Arm: -10.10% Marvell: -7.05% Ciena Corp: -6.68% GE Vernova LLC: -6.53% Nebius NV: -5.29% Eaton: -5.26% Vertiv Holdings Co: -5.24% BAE Systems PLC: -5.17%Some stories behind the losers today:Shake Shack (-28.27%) — Earnings Disaster Shake Shack tumbled roughly 30% after reporting an operating loss of $2.6 million and missing both earnings and revenue estimates. CEO Rob Lynch cited winter storms and an increase in projected store openings as drags on EBITDA, while the company also dealt with higher beef costs. Poor weather during the period hurt same-store sales by 240 basis points. Additionally, the company announced a new CFO and provided no formal guidance for the next quarter, which further unnerved investors. Tapestry (-12.41%) — Beat Earnings, But Market Wasn't Buying It Tapestry posted strong Q3 results with EPS of $1.66 — up 62% year-over-year — and operating margin expanding 490 basis points. Despite the beat, the sell-off appears tied to ongoing weakness at Kate Spade, whose constant currency sales fell 11% to $219.6 million, alongside profit-taking after a significant run-up in the stock heading into earnings.Whirlpool (-11.89%) — A Triple Blow Whirlpool shares dropped sharply after reporting a Q1 net loss of $85 million, suspending its dividend, and cutting its 2026 profit outlook. Net sales fell 9.6% as U.S. appliance demand slumped, which Whirlpool linked to the war in Iran. The company slashed its 2026 adjusted EPS outlook to $3.00–$3.50 from a prior forecast of approximately $6 per share, a reduction JPMorgan attributed to higher raw material costs, a larger tariff drag than anticipated, and weaker pricing benefits. ARM Holdings (-10.10%) — Supply Can't Keep Up With Demand Arm Holdings fell after the semiconductor and software design company topped earnings expectations but said it has not yet secured enough supply capacity to meet an additional $1 billion in demand tied to its new AGI CPU. Investors reacted negatively to the supply bottleneck, even amid otherwise strong results.Marvell (-7.05%) — Profit-Taking After a Monster Rally Marvell's decline appears to be a market correction driven by concerns over its premium valuation and profit-taking after a substantial run-up, rather than any direct negative company news. Leading up to today, Marvell had climbed over 50% in the preceding month and more than 200% over the past year.Ciena Corp (-6.68%) — AI Optical Play Pulls Back With the Sector Ciena has been one of the biggest beneficiaries of the AI infrastructure build-out, with its stock surging from a 52-week low near $70 to over $560. Today's pullback appears largely sector-driven, as optical networking stocks like Ciena have been heavily tied to AI investment spending, which Goldman Sachs analysts estimate could account for roughly 40% of all S&P 500 earnings growth this year — making any reset in sentiment felt sharply across the group. GE Vernova (-6.53%) — Cooling Off After an All-Time High GE Vernova hit an all-time high just two weeks ago following a blowout Q1 earnings report. Today's decline looks like a broader rotation out of AI infrastructure names rather than any specific negative catalyst, with the stock still up approximately 167% over the past year.Nebius NV (-5.29%) — Caught in the AI Infrastructure Pullback Nebius, a European AI cloud company, was swept up in the broad sell-off across AI infrastructure names. With no specific news catalyst, the move reflects the same sector rotation hitting GE Vernova, Vertiv, and Eaton.Eaton (-5.26%) & Vertiv Holdings (-5.24%) — AI Power Trade Under Pressure Eaton plays a similar role to Vertiv in electrical distribution for data centers, with a more diversified industrial mix. The two are tightly linked to the same AI infrastructure trade — every megawatt added to a hyperscaler's data center generates orders across both companies. Both stocks pulled back today as the group digested recent gains, with Vertiv also still carrying some overhang from softer-than-expected Q2 guidance issued two weeks ago. TECHiBAE Systems (-5.17%) — EU-US Trade Tensions and Geopolitical Noise BAE Systems fell as geopolitical and trade tensions rattled European defense and industrial names. Trump's decision to raise EU auto tariffs to 25%, combined with pointed criticism of European NATO allies for not participating in the Iran conflict, created a risk-off tone for European equities broadly. This article was written by Greg Michalowski at investinglive.com.

NY Fed Pres John Williams is speaking (voter) and says: There is a lot of uncertainty in the economy right nowEconomy perform better last year than many expected.Economy has shown a lot of resilience, amid stable job market.The data support idea of K shaped economy, lower income families under pressure.Interest rates are not historically high. This article was written by Greg Michalowski at investinglive.com.

Trump: Had a great call with the president of European commission Von Der Leyensays that Europe and US are completely united that Iran can never have a nuclear weapon.Agreed to give EU until July 4 to fulffill trade agreements or unfortunately there tariffs would immediately jump to much higher levelsThe full TruthSocial post:I had a great call with The President of the European Commission, Ursula von der Leyen. We discussed many topics, including that we are completely united that Iran can never have a Nuclear Weapon. We agreed that a regime that kills its own people cannot control a bomb that can kill millions. I’ve been waiting patiently for the EU to fulfill their side of the Historic Trade Deal we agreed in Turnberry, Scotland, the largest Trade Deal, ever! A promise was made that the EU would deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO! I agreed to give her until our Country’s 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels. Thank you for your attention to this matter. President DONALD J. TRUMPRecall, on May 1, 2026, President Trump announced he was raising tariffs on cars and trucks from the European Union to 25%, claiming the bloc had failed to fully comply with a trade agreement negotiated with the US. Trump made the announcement via Truth Social, stating: "Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States." The White House said the changes would be made under Section 232.The EU rejected the claim that it was not in compliance, with a European Commission spokesperson saying the bloc remains "fully committed to a predictable, mutually beneficial transatlantic relationship." For context, the prior trade agreement — known as the Turnberry Agreement — had set a tariff ceiling of 15% on most EU goods, though a Supreme Court ruling earlier this year had complicated the tariff framework. This article was written by Greg Michalowski at investinglive.com.

Banxico lowered the Benchmark interest rate to 6.5% from 6.75% as expected.Board members Heath and Borja voted to hold rates steady. Board members Rodriguez, Mejia, and Cuadra voted to cut rates. The board was not unanimous on the rate decision. Benchmark interest rate lowered to 6.50% from 6.75%. Headline inflation is projected to converge to target in Q2 2027. Looking ahead, the board estimates it will be appropriate to maintain the rate at its current level. Forecasts Q4 2026 average annual headline inflation at 3.5% versus previous forecast of 3.5%. Forecasts Q4 2027 average annual core inflation at 3.0% versus previous forecast of 3.0%. Forecasts Q4 2026 average annual core inflation at 3.4% versus previous forecast of 3.4%. Forecasts Q4 2027 average annual headline inflation at 3.0% versus previous forecast of 3.0%. This article was written by Greg Michalowski at investinglive.com.

Crude oil is settling at $94.81, down $0.27 or -0.28% on the day, after another volatile trading session driven by geopolitical headlines and shifting risk sentiment. Technically, the market is closing just below a key technical level — the 50% midpoint of the rally from the April 17 low — which comes in at $94.95. Holding below that midpoint keeps the near-term bias tilted slightly in favor of the sellers.On the topside, the price extended to a session high of $97.46, narrowly surpassing yesterday’s high at $97.34 before stalling. That area has repeatedly acted as an important ceiling — and at times a floor — going back to April 24, reinforcing its significance as a key battleground between buyers and sellers. As long as the price remains below that resistance zone, sellers remain more in control from a short-term technical perspective.Meanwhile, the session low reached $89.85, holding above yesterday’s low at $88.66. The ability to stay above that prior low helped stabilize the downside and encouraged some late-session buying, but buyers still need to reclaim the $94.95 midpoint and then break back above the $97.34–$97.46 resistance area to shift momentum back to the upside. This article was written by Greg Michalowski at investinglive.com.

ECBs Schanabel is speaking and says: My view is that some damage done from Iran war will be hard to reverseThere seems to be a disconnect between the stock market and the global situation.Earlier, Schnabel said: Signs of supply chain disruptions are reemerging.Rapidly growing shares of European manufacturing firms are planning to increase prices. Household inflation expectations are adapting rapidly.If energy price shock broadens, monetary policy will need to tighten. Prices shocks are likely to feed through the economy faster than in 2021Risks have increased in recent weeksComments suggest that a tightening by the ECB is in the cards going forward This article was written by Greg Michalowski at investinglive.com.

The Wall Street Journal is reporting Saudi Arabia and Kuwait lifted restrictions on U.S. military use of bases and airspace tied to operations around the Strait of Hormuz. The move clears a key obstacle for the U.S. effort to restart escorted commercial shipping operations through the strait. The U.S. had paused the mission, called Project Freedom, after concerns from Gulf allies about escalation and protection from Iranian retaliation. Saudi Arabia reportedly became concerned after U.S. officials appeared to downplay Iranian attacks on Gulf targets. Crown Prince Mohammed bin Salman spoke directly with President Donald Trump multiple times during the dispute. The operation relies heavily on Saudi and Kuwaiti bases and airspace because of the large number of U.S. aircraft protecting ships. Iran responded to the U.S. mission by launching missiles and drones at ships and the United Arab Emirates, including strikes on the Fujairah oil hub. The U.S. said it intercepted attacks and destroyed several Iranian fast-attack boats, though some non-U.S. ships were hit. Gulf states are increasingly worried Iran may believe it can strike regional countries without facing major consequences. Pentagon officials said any resumed operation would route ships through a mine-cleared corridor protected by U.S. naval and air forces.Meanwhile, Iran foreign minister criticized the unilateral and provocative resolution submitted by the US and the Gulf on the situation in the Strait of Hormuz. They called the proposal one-sided and provocative. Araghchi emphasizing responsibility on the international community to prevent aggressors from abusing the Security Council as a tool to justify their illegal actions.Crude oil is trading higher and has pushed to a high of $97.46. That tests the corrective high price from yesterday after it tumble down to $88.70. The corrective high reached $97.34. Sellers are leaning on the first test. This article was written by Greg Michalowski at investinglive.com.