Category: Newsletter

A U.S.-Iran diplomatic breakthrough triggered a de-escalation pivot across global markets, sending oil prices down 8.70% as the Straits of Hormuz partially reopened. U.S. equities saw a sharp rotation out of tech into defensives, while Treasury yields retreated on deflationary relief. Eyes now turn to a holiday-shortened week packed with front-loaded labor data that will test Fed Chair Warsh’s hawkish resolve

The US–Iran ‘ceasefire’ eased energy supply fears and lifted risk sentiment, while the Fed’s June meeting and new Chairman Warsh delivered a sobering reminder that inflation remains unfinished business. With rates held at 3.50–3.75% and a potential hike back on the table, markets are repricing the path to easier policy. AI-driven equities and India stood out as bright spots amid the recalibration.

A blowout US jobs report — 172,000 nonfarm payrolls against an 80,000 consensus — sent rate-hike odds surging to 70% by year-end, erasing all hopes of 2026 cuts.

Equities sold off sharply, with the Nasdaq plunging 4.7% on the week as Broadcom’s guidance disappointed, while US-Iran ceasefire talks collapsed by Friday, keeping oil elevated and gold under pressure.

A US-Iran ceasefire offered markets a brief reprieve, driving a sharp rally in risk assets and pushing the S&P 500 to its strongest weekly performance in months. Yet “warflation” remains the dominant theme — sticky PCE inflation, elevated oil prices, and a near-closed Strait of Hormuz are forcing central banks to recalibrate toward higher-for-longer rates. Gold, tech, and industrial metals emerged as the week’s standout performers amid the cautious optimism

A week of two halves early AI-driven losses and geopolitical friction gave way to a sharp Friday recovery after the Supreme Court struck down sweeping global tariffs, lifting the Nasdaq to its first positive week since January. 

However, the full impact of the ruling which may prove more nuanced, plus a divided Fed, sticky core PCE, and emerging private credit liquidity concerns keep the macro outlook unsettled.

Technology stocks endured their worst week in months as investors reassessed AI capital spending returns; however, broader markets demonstrated resilience with a strong late rally pushing the Dow briefly past 50,000 for the first time.

While the US-India trade deal offers a geopolitical reprieve for Indian markets, the macro focus in the US is narrowing on the health of the labor market.

With the January jobs report delayed and layoff announcements surging, markets are increasingly assessing whether the 10th consecutive quarter of earnings growth can resist emerging cracks in the employment.

Markets navigate a volatile backdrop: from divergent U.S. earnings and violent precious‑metal moves to shifting Fed leadership and AI deal dynamics.

Focus shifts to Trump’s surprise pick of Kevin Warsh for Fed Chair, which adds a hawkish tilt to policy expectations.

US markets observe a rotation towards small caps, away from the stretched valuations seen in mega cap stocks.

The global backdrop remains of elevated uncertainty as Trump mounts pressures on nations supporting Greenland’s autonomy, while tensions remain elevated in Iran amid dire economic conditions.

Economic and policy risk were at least temporarily relegated to secondary status as geopolitical risk emanating from the war between Israel and Iran took centrestage. We expect financial markets to be in ‘risk off’ mode until clarity emerges about the extent and duration of damage caused by the conflict. Oil prices, in particular, are in focus.

Last week, the S&P 500 crossed 6,000 marking a bull market in a drama filled week which included a public spat between Donald Trump and Elon Musk and the first direct talks between the US president and the Xi Jinping since Liberation day.