On Wall Street, indices are retreating. The Dow Jones was down 1.03% around 5:45 p.m.

In a message posted on the Truth Social network, Donald Trump judged this Wednesday that the Iranians had 'taken too long to negotiate a deal that would have been great for them', adding that they were 'going to have to pay the price'. 'The Iranian military is in complete and total chaos. Much of it, like their navy and air force, doesn't even exist anymore - they have been totally defeated', he added. 'Iran is all talk and no action. The tyrant of the Middle East is DEAD!!!'.

For its part, Iran announced today that it had targeted U.S. bases in the Gulf in retaliation for Washington's strikes against Iranian targets near the Strait of Hormuz. This escalation follows the destruction of a U.S. helicopter, an attack that the United States attributes to Tehran.

Following these clashes, Esmaeil Baghaei, the spokesperson for the Iranian Ministry of Foreign Affairs, criticized Washington for undermining diplomacy through contradictory messages, shifts in position, and repeated ceasefire violations.

In a statement, the ministry 'reaffirmed the legal and moral responsibility of all countries in the Gulf region [...] to prevent the U.S. military and Israel from using their territory or facilities to plan, organize, execute, or support hostile actions against Iran'. It signaled that Iran 'would not hesitate to exercise its inherent right to self-defense' by specifically targeting bases and logistical facilities used for operations against Tehran.

Beijing said today it was 'deeply concerned' by the strikes between the two sides and urged them to 'stop the escalation of the situation'.

In this context, oil prices are rising but remain below the 100 dollar threshold. Brent gained 0.24% to 92.56 USD around 5:45 p.m. WTI advanced 0.28% to 89.50 USD.

In corporate news, Soitec (-10.56%) plummeted, marking a second consecutive session of decline. The stock was hit by unfavorable comments from Jefferies, which downgraded its rating from 'hold' to 'underperform', as well as a rather mixed note from Berenberg, which maintained its 'hold' recommendation. Both brokers nevertheless raised their price targets, from 45 to 85 EUR and from 28 to 138 EUR, respectively.

In Europe, adidas (+2.84%) posted the strongest gain on the DAX 40 index in Frankfurt this Wednesday following a note from RBC. The Canadian bank believes that 'the German sporting goods manufacturer benefits from strong earnings visibility thanks to the current strength of its direct-to-consumer (DTC) activities, which include sales from its own stores as well as its e-commerce business'. Given its market share gains in both footwear and apparel, RBC stated it expects the group to eventually revise its 2026 financial targets upward.

Furthermore, WH Smith shares (-15.60%) slumped on the London Stock Exchange following the announcement of a proposed capital increase intended to reduce its reliance on debt, representing nearly 20% of its market capitalization. This news comes alongside a downward revision of its annual targets. The British bookstore chain now anticipates an underlying pre-tax profit of 75 to 90 million pounds for the 2026 financial year, compared to a previous estimate of 90 to 105 MGBP.

ECB in focus

Tomorrow at 2:15 p.m., investors will learn of the ECB's monetary policy decision following its meeting.

Patrick Barbe, Head of European Investment Grade Fixed Income at Neuberger Berman, considers that 'the main risk related to the Iranian conflict should come from slowing growth, as the rise in energy prices is currently mainly limited to oil. The deterioration in household confidence is already weighing on consumption'. 'However, recent statements from several ECB members indicate they do not anticipate a recession. The ECB should therefore favor a 25-basis-point hike in its key rates at this meeting. Beyond that, in the absence of second-round effects and given the weakness of activity in the eurozone, we believe the ECB will proceed more with a monetary policy adjustment than a true rate-hiking cycle. We thus anticipate two rate hikes this year', he stated.

For its part, Indosuez WM also anticipates two temporary ECB rate hikes this year, in June and July. 'The main driver of our scenario is the continued rise in inflation expectations, with household expectations reaching 4%, a level similar to market measures such as one-year inflation swaps. In our view, the ECB is increasingly concerned about the risk of de-anchoring inflation expectations, especially as surveys continue to show an increase in selling price hike intentions'.

USA: Inflation rises as expected in May

On the statistical front, U.S. inflation offered no unpleasant surprises in May. The Consumer Price Index rose by 0.5%, as expected, bringing the year-on-year increase to 4.2%, in line with expectations. However, it signals an acceleration from the 3.8% recorded in April.

In core data, excluding food and energy, the monthly increase was 0.2%, 0.1 percentage point lower than expected. On an annual basis, the data matched the consensus with a 2.9% increase, compared to 2.8% a month earlier.

'While core inflation measures indicate more limited price increases and much of the rise comes directly from oil (energy) or indirectly from airfares, this release suggests that inflationary pressures resulting from the oil shock remain, at this stage, contained for the U.S. economy', noted Josh Jamner, Senior Investment Strategy Analyst at ClearBridge Investments (a subsidiary of Franklin Templeton), on the matter.