MARKET WRAPS
Stocks:
European shares were up on Friday amid a mixture of cautious optimism and continued uncertainty over a potential resolution to the conflict in the Middle East.
Airlines and travel stocks led the risers in early trading, while banking stocks gained across the continent.
"The tentative U.S.-Iran deal to extend the cease-fire is taking center stage this morning," Danske Bank said.
The U.S. and Iran are within reach of an agreement to wind down the war , Treasury Secretary Scott Bessent told reporters Thursday, but President Trump has yet to sign off on it. Vice-President JD Vance told the BBC the two sides are still working on several sticking points and it was too early to say when or if a deal would be agreed.
Oil was headed for a sharp weekly loss. While reopening the Strait would provide immediate relief to the market, a resolution has already been priced in.
"Significant further downside is likely limited , particularly during the early stages of a ceasefire," ING said.
Economic insight
French inflation this month climbed to its highest level in more than two years as energy prices continued to rise in response to the war in Iran, putting the European Central Bank on course to raise interest rates for the first time since 2023 when it next meets in June.
Stocks to Watch
Bayer 's U.S. legal battles remain the main source of uncertainty looming over its shares, which could take a hit if the company's litigation strategy doesn't go to plan, Jefferies said.
GSK 's trial results for its bepirovirsen drug candidate for hepatitis B point to a medicine with blockbuster potential that offers a viable cure for some patients for the first time, Jefferies said.
H&M is facing challenging input conditions as the Middle East crisis has sent raw-material and supply-chain costs higher, Jefferies said.
Johnson Matthey 's first-half results were mixed, with sales below expectations but underlying EBIT in line with consensus, Baader Europe said.
U.S. Markets:
Stock futures were edging up after all three stock indexes closed at records on Thursday.
Hopes for a settlement to the Iran conflict and that artificial-intelligence services can continue to grow could extend the record-setting rally.
Forex:
The euro was steady. The currency could rise more than 1% against the dollar if the Strait of Hormuz reopens under any U.S.-Iran agreement, ING said.
The dollar also traded steady as investors remain cautious even after headlines suggesting the U.S. and Iran are nearing an agreement to wind down the war.
Bonds:
Eurozone government bond yields edged higher in early trade.
The direction of both eurozone government bond yield spreads and curves remains dependent on the outcome of Middle East negotiations, Societe Generale said.
Treasury yields fell and have scope to move lower toward year-end, SEB said. A resolution to the Middle East conflict alone is unlikely to trigger a sustained decline in yields; this would also require support from macro data and the Federal Reserve's communication over the coming months.
Short-end U.S. Treasury yields are slightly stretched on the upside, it added. This reflects the likelihood that given inflation risks and solid growth data, markets will, for now, hold on to the possibility of an interest-rate hike by year-end .
The 10-year Bund yield remained below 3% . A Middle East peace deal announcement could temporarily push the 10-year Bund yield below 2.90%, SEB said.
Energy:
Oil prices were on track for steep weekly losses . Brent crude was down 0.8% and has plunged more than 11% this week, while WTI futures fell 0.8%.
Metals:
Spot gold rose. The precious metal's recent weakness doesn't suggest a breakdown in its role as a safe haven, said OCBC. Instead, the decline seems largely macro-driven , as rising oil prices from the Middle East conflict push inflation and real yields higher, boosting the dollar and capping gold's gains.
Gold Chart
Comex gold futures were likely staging a counter-trend rebound , based on the daily chart, RHB Retail Research said. Based on the bearish technical setup, the commodity's rebound will probably be short-lived and followed by downside price action.
Iron
Iron ore was higher in early Asian trade, but some analysts remain bearish on prices in the near term. Supply remains high even though it has fallen slightly from the peak, Baocheng Futures said.
EMEA HEADLINES
U.S. and Iran Have 'Makings of a Deal,' Bessent Says
The U.S. and Iran are within reach of an agreement to wind down the war, Treasury Secretary Scott Bessent told reporters Thursday, but President Trump has yet to sign off on it, and the White House wants a deal that satisfies several key conditions.
"We perhaps have the makings of a deal here," Bessent said from the White House, noting both sides have been swapping proposals. "Everything depends on what the president wants to do, and President Trump is not going to make a bad deal."
French Inflation Rises to More-Than Two-Year High as Energy Costs Intensify
French inflation this month climbed to its highest level in more than two years as energy prices continued to rise in response to the war in Iran, putting the European Central Bank on course to raise interest rates for the first time since 2023 when it next meets in June.
Annual inflation in the eurozone's largest economies had been trending downward toward the end of last year, reaching 0.4% in France in January. However, it rose sharply in March after the closure of the Strait of Hormuz drove prices of oil and natural gas higher.
Britain Is Drowning in Debt. The Bond Sharks Are Circling.
The public is about to square off with the bond market in Britain, and the country's politicians are struggling to play both sides.
You can cherry-pick plenty of numbers to sum up the crises in the United Kingdom. Here's one: The country could soon have its sixth prime minister in seven years. Prime Minister Keir Starmer is on the brink of being turfed out, less than two years after the Labour Party's landslide general election win.
Hezbollah's Drones Have Become a Top Threat to Israel
TEL AVIV-Hezbollah militants are increasingly adept at using explosive drones, deploying night-vision gear and first-person viewers to inflict a deadly toll on Israeli ground troops.
Within a matter of weeks, Hezbollah's one-way drones have turned into Israel's top concern on its northern flank, overtaking more-traditional threats such as antitank missiles, Israeli officials say. They are now the leading cause of battlefield deaths, responsible for seven out of the 11 Israeli soldiers killed since a shaky cease-fire between Israel and Lebanon went into effect in April, according to the military.
GLOBAL NEWS
Oil Falls though U.S. Futures Unmoved as Bessent Says U.S.-Iran Deal in Sight
Oil prices pulled back on renewed optimism that the U.S and Iran are closing in on a deal that would reopen the Strait of Hormuz, though U.S. stock futures were unmoved by the developments.
Brent crude oil for July delivery fell below $92 a barrel on hopes that oil-laden ships will soon be able to transit the crucial waterway. Treasury Secretary Scott Bessent said a deal to end the war was within reach Thursday, though President Trump has yet to approve any agreement. U.S. officials said the two sides were closing in on a 60-day deal, which would include a mutual unwinding of blocks in the Strait of Hormuz over the first 30 days.
Treasury Yields Can Keep Rising Even if the War Ends. It's About More Than Oil.
Oil prices and U.S. Treasury yields have been moving practically in lockstep this month. So that should mean that when the Iran war resolves and energy prices ease, yields should also decline, right?
Think again.
Aluminum Squeeze Might Get Worse Yet
Aluminum-used in everything from Ford F-150 trucks to soda cans-hasn't risen in price as much as crude oil, liquefied natural gas or fertilizer since the Middle East conflict began.
Some industry experts warn aluminum's rally is far from done.
The Chip Rally Has Gone Parabolic. It's Time to Separate the Pillars From the Pretenders.
Chip stocks used to be the gritty part of the tech complex. In trading patterns and profit margins, they had more in common with cyclical commodities than software. But as with so many things, artificial intelligence changed everything. Almost overnight, chips became the accelerant for the technology-and the market.
Supply constraints compounded the excitement. During one stretch this spring, the SOX, or PHLX Semiconductor Sector Index, rose for 18 straight days, for a gain of 47%. The index is up 80% since March 30, leading to worries about a new dot-com-style bubble with chips looking like the 2026 version of fiberoptic stocks.
U.S. Says Deal Reached With Kenya on Ebola Quarantine Facility for Americans
The Trump administration said Thursday it had reached a deal with Kenya to establish a quarantine facility for Americans exposed to Ebola in the Democratic Republic of Congo, an arrangement that has drawn fierce opposition from Kenyan medical groups.
In a conference call with reporters, senior administration officials said more than 30 U.S. public-health officers were en route to staff the 50-bed unit, which will be located at the Laikipia Air Base outside the city of Nanyuki and operational beginning Friday. The deployed officers include physicians, nurses, therapists and technologists, one of the officials said, including those who have experience dealing with prior Ebola outbreaks.
Carney Is Steering Canada Away From the U.S.-but Still Wants Its Investors
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05-29-26 0517ET
