US futures whipsawed and crude oil spiked higher as tensions flared up again in the Middle East, taking the focus off a run of strong earnings by megacap tech companies. As of 8:00am ET, S&P and Nasdaq 100 futures dropped 0.2% from Friday's record highs, falling as much as 0.5% just minutes earlier after Iran’s Fars agency claimed two missiles hit an American patrol boat, before erasing most of the declines after the US denied a ship was hit. All of this after Trump said Sunday that US Navy will guide ships out of the Strait of Hormuz from Hormuz in a move called “Project Freedom" while Iran issued Trump a one-month deadline for negotiations on its proposed 14-point deal to reopen the Strait of Hormuz. European stocks were mostly red while tech-heavy Asia indexes in South Korea and Taiwan surged in Monday trading. In premarket trading, Mag 7 names are mixed: GOOGL (+0.6%), AMZN (+0.6%), and META (+0.7%) are outperforming, while AAPL and MSFT are lower. Brent crude surged more than 5% to trade above $113 a barrel before paring the gain, while bitcoin and gold traded in a mirror image. Interest rates are higher with the 10Y yield rising 4bps to 4.41%; WTI crude added ~$2 to $104 this morning having briefly traded above $107; base metals are higher, while gold and silver both sliding more than 2%. Looking at the US economic data calendar slate includes March factory orders at 10am. Fed speaker slate includes New York Fed President John Williams at 12:50pm

In premarket trading, Mag 7 stocks are mixed (Alphabet +0.2%, Amazon -0.08%, Apple -0.4%, Nvidia -0.06%, Meta -0.09%, Microsoft -0.4%, Tesla +0.2%)

• Cryptocurrency-linked stocks are rising in US premarket trading after Bitcoin climbed above $80,000 for the first time in more than three months, buoyed by renewed risk appetite in the stock market.
• Celcuity (CELC) jumps 15% after its Phase 3 trial of gedatolisib plus fulvestrant in mutant breast cancer patients met its primary endpoint.
• EBay Inc. (EBAY) gains 8% as GameStop Corp. is proposing to buy the e-commerce company for about $56 billion in cash and stock, a bold attempt by Ryan Cohen to take over a name several times larger. GameStop (GME) falls about 1%.
• Global Business Travel Group (GBTG) gains 57% after Long Lake Management agreed to buy the company for $9.50 per share in an all-cash transaction valued at about $6.3 billion. Global Business Travel Group is a travel platform spun out of American Express.
• Norwegian Cruise (NCLH) falls 7% after the cruise-line operator gave a forecast for second-quarter profit that missed expectations and slashed a full-year outlook. The war in Iran has driven up fuel costs and hurt demand, the company said.

In deals, GameStop proposed to buy eBay for about $56 billion in cash and stock, a bold attempt by Ryan Cohen to take over a storied e-commerce name several times larger. Some have wondered if Blockbuster or Circuit City would announce a hostile takeover of GameStop while it is buying eBay. 

Iran moved to assert control over the Strait of Hormuz, a choke point for oil shipping, after President Donald Trump said the US would begin guiding ships not involved in the conflict through the waterway from Monday. The heightened tensions stalled a global stocks rally driven by optimism around the artificial intelligence trade and buoyant tech earnings. Sentiment was dented after Iran’s Fars agency claimed two missiles hit an American patrol boat, before erasing most of the declines after the US denied a ship was hit; the rapid recovery suggested the rally may not be over. Meanwhile, NATO Secretary General Mark Rutte warned European leaders that Trump is disappointed with their reluctance to assist with the war.

“This is just another dip that investors will want to buy into,” said David Kruk, head of trading at La Financiere de l’Echiquier in Paris. “Yes, the news from Iran led to a spike in oil prices but we’re now used to those. Investors are very much focused on the surprisingly good earnings season we’ve had so far, on the AI trade.”

Elsewhere, the AI narrative has continued to capture attention and tech-heavy Asia indexes in South Korea and Taiwan surged in Monday trading. However, some investors are using the rally to book profits, with hedge fund sharply unwinding risk in technology stocks for a second straight week, according to Goldman's Prime Brokerage. 

As Bloomberg notes, first-quarter earnings strength hasn’t been limited to megacap tech. It’s showing up across sectors. Small caps are on a tear, bank profits are booming and firms keep plowing past macroeconomic obstacles. The breadth of earnings revisions has even accelerated since the start of earnings season. The EPS surprise for the median S&P 500 stock in Q1 is 6%, the strongest in four years, according to Morgan Stanley's Michael Wilson.

Global stocks have been rising for more than a month as traders have set aside concerns about the economic fallout from the Middle East hostilities, with signs of corporate resilience driving US stocks to their best month since 2020. The proportion of companies missing analysts’ estimates is hovering at the lowest level since 2021 as earnings wind down for two-thirds of the stocks in the S&P 500 Index, which has posted five consecutive week of gains.

“We’ve gone from a market mainly driven by geopolitics to a market focused on earnings and these have been really positive across the board,” said Vincent Juvyns, chief investment strategist at ING in Brussels “Tech has been a driving force, but financial and energy stocks have also lifted indexes and earnings expectations.”

European shares slipped as carmakers fell following US President Donald Trump’s latest tariff threat. The Stoxx Europe 600 index declined about 0.5%, with the automobiles and parts sector down more than 1%. Mercedes-Benz Group AG dropped 2% and Bayerische Motoren Werke AG slid 1.9%. Trump said he would raise tariffs on European auto imports to 25%, adding to woes for the sector after a tepid earnings season.  Here are the biggest movers Monday:

• Nokia shares jump as much as 9% to their highest in 16 years as they play catch up with moves in the ADRs since Thursday’s European close
• Umicore shares rise as much as 16%, the steepest gain in 11 months, after the Belgian materials technology group said it expects group adjusted Ebitda for FY2026 to approach €1 billion, significantly above estimates
• Sinch gains as much as 20%, the most since July last year. The company, which sells cloud communication services, tracked gains in Twilio, which reported profit that beat analyst estimates and revenue growth forecasts
• Sanofi falls as much as 2% after Morgan Stanley cut to equal-weight from overweight, saying that while recent 1Q numbers may provide scope for a 2Q guidance raise, the investment story otherwise remains “catalyst-light” with key pipeline drug trial readouts now expected in 2027

Earlier in the session, AI chipmakers helped Taiwanese and Korean stock benchmarks reach record highs, helping the MSCI Asia Pacific jump as much as 2.3% on Monday, the most since April 8, and rising to new record highs. Tech-heavy benchmarks in South Korea and Taiwan surged more than 4.5% each. The moves came after the S&P 500 Index extended a record-breaking streak Friday to mark a fifth week of gains, following solid earnings from tech mega caps. The AI theme — a dominant feature of markets before the outbreak of the Middle East conflict — has returned to the forefront as last month’s ceasefire agreement between the US and Iran calmed investor nerves. Asia’s benchmark surged more than 13% in April, erasing almost all of the declines suffered in March. It is up 15% so far this year. “Investors are moving past the initial shock from the Middle East tensions, with more joining the FOMO trade,” said Francis Tan, Asia chief strategist at Indosuez Wealth in Singapore. Shares of SK Hynix soared nearly 13% on Monday to a record, while TSMC’s jumped 6.6% to their all-time high. Samsung’s stock also jumped more than 5% to a record. Markets in mainland China and Japan were among those shut for holidays.

Markets like South Korea are currently performing well because of this AI-driven trade or hype, Dilin Wu, a research strategist at Pepperstone Group, said in a Bloomberg TV interview. “I would be cautiously optimistic on the Asian market in general,” as the geopolitical uncertainty and high oil prices may be a constraint to equities, she said.

Oil pared early declines, with WTI above $101.50, as traders remained skeptical about President Trump’s proposal to guide neutral ships through the Strait of Hormuz after the Wall Street Journal reported the plan didn’t currently involve Navy escorts. S&P 500 E‑mini futures rise 0.1%, while Nasdaq contracts gain 0.4%. In FX, the yen spiked higher earlier with USD/JPY now trading near 156.80. Traders remain on watch for further FX intervention amid thin liquidity with Japanese and UK markets closed. Gold was little changed, hovering near $4,610 an ounce. Bitcoin rose to a three-month high above $80,000. Treasury futures edged lower to around 110‑18, with cash Treasuries closed for the Japan holiday.

In FX, the Bloomberg Dollar Spot Index erases a 0.2% drop and traded near session highs following a sharp escalation in Iran tensions; USD/JPY gained to trade near session highs of 157.10 falling as much as 0.8% to 155.72 following what is now a third failed intervention. Japanese Finance Minister Satsuki Katayama said the government’s stance has been clear, when asked whether the authorities remain ready to intervene in the currency market to prop up the yen. Katayama said “no comments” when asked if authorities intervened in the market on Monday. 

In rates, treasuries are lower as oil prices rise amid heightened Middle East tensions after US President Donald Trump said the US would guide stranded ships through the Strait of Hormuz. US yields are 3bp-4bp cheaper across a flatter yield curve, tightening 2s10s and 5s30s spreads by 0.5bp and 1.5bp respectively. 10-year trades near session high, up 3.5bp to about 4.41%. IG dollar issuance slate includes one small deal so far. Dealers expect about $40 billion of supply this week and about $175 billion for the month. Bunds fell with shorter maturities underperforming; two-year yield rises 4bps to 2.68% as ECB policymaker Peter Kazimir says a June hike is “all but inevitable.” Treasury auctions resume next week with 3-, 10- and 30-year sales

In commodities, WTI crude oil futures are up more than 3%, as Iran moved to assert control over the Strait of Hormuz after President Donald Trump said the US would begin guiding ships not involved in the conflict through the waterway from Monday. Iran surged after Iran’s Fars agency claimed two missiles hit an American patrol boat, before erasing most of the declines after the US denied a ship was hit. 

Looking at the US economic data calendar slate includes March factory orders at 10am. Fed speaker slate includes New York Fed President John Williams at 12:50pm

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.2%,
• Russell 2000 mini -0.2%
• Stoxx Europe 600 -0.2%
• 10-year Treasury yield 4.40%, +3bps
• VIX +0.5 points at 17.5
• Bloomberg Dollar Index little changed at 1,193.43
• euro little changed at $1.1719
• WTI crude +0.6% at $103.12/barrel

Top Overnight News

• Oil jumped after Iran’s FARS news agency claimed that two missiles had hit a US warship that ignored warnings. Donald Trump had said that the US would begin guiding neutral ships through the Strait of Hormuz starting today. Iran warned the move would breach the ceasefire, Al Mayadeen reported. OPEC+ agreed to raise June quotas by 188,000 barrels a day, a symbolic increase with actual supply dependent on the reopening of Hormuz. BBG
• Crew members from an Iranian ship seized by the US after trying to breach its military blockade last month have been transferred to Pakistan for repatriation, according to Pakistan’s foreign ministry. CNN
• A sudden surge in the yen ensured traders remained on edge over the potential for Japanese authorities to step back into the market after last week’s intervention to curb declines: BBG
• China ordered local companies to defy US sanctions for the first time, telling them to ignore restrictions on five domestic refiners linked to Iran’s oil trade. BBG
• US senators propose an act on the China threat to strategic interests and the US Senators' China threat resolution is bipartisan.
• Berkshire Hathaway’s cash pile surged to a record $397 billion, as operating earnings rose 18% in Greg Abel’s first quarter as CEO. The firm sold a net $8.1 billion of equities. BBG
• The Bank of Korea's senior deputy governor said forward guidance on monetary policy would become more hawkish at the next meeting later this month, as it was time to consider interest rate hikes, according to pool reports shared by the central bank on Monday. RTRS
• Russia has stepped up security protocols for President Vladimir Putin amid fears of assassination as he grows more isolated and absorbed by his war in Ukraine. FT
• Global airlines have cut 2mn seats from their May schedules within the past two weeks, as concerns about fuel availability in the coming weeks intensify. Thousands of flights have been cancelled and several services have switched to smaller or more fuel-efficient aircraft to conserve fuel as they brace for supply disruption, according to data from analytics company Cirium. FT
• GameStop offered to buy eBay for about $56 billion in cash and stock, targeting a company several times its size. EBay shares surged about 10% premarket but remained substantially below the offer price. BBG
• Anthropic is nearing a deal to create a new joint venture that will sell AI tools to PE-backed companies. WSJ
• Wednesday will amount to a sort of Groundhog Day for US bond dealers, who will — as has been the case for more than a year now — be watching for any change in guidance from the Treasury in its latest plan for debt issuance: BBG
• Australia’s central bank is set to entrench its status as a hawkish outlier with a third straight interest-rate hike, diverging from peers that are mainly sitting tight to observe fallout from the US-Iran conflict: BBG
• South Korea’s largest pension fund removed its cap on currency hedging last month, allowing it to exercise more heft in the foreign exchange market at a time of won weakness: BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly firmer, although thinner liquidity prevailed amid the absence of Japanese and Mainland Chinese markets. ASX 200 trimmed early gains but remained rangebound ahead of the RBA decision, where a 25bps hike is expected. KOSPI surged at the open, with chip giants leading the market higher, SK Hynix +10%, Samsung Electronics +3.5%. Hang Seng opened higher, supported by tech strength, albeit Northbound and Southbound Stock Connect trading were closed due to the Labour Day holiday in Mainland China.

Top Asian News

• Indian HSBC Manufacturing PMI Final (Apr) 54.7 vs. Exp. 55.9 (Prev. 53.9).
• Australian Building Permits YoY Prel (Mar) Y/Y 9.0% (Prev. 14.0%).
• Australian ANZ-Indeed Job Ads MoM (Apr) M/M -0.8% (Prev. -3.1%).
• Australian Private House Approvals MoM Prel (Mar) M/M 12% (Prev. 0.2%).
• Australian Building Permits MoM Prel (Mar) M/M -10.5% (Prev. 29.7%).
• Australian TD-MI Inflation Gauge (Apr) M/M 0.6% (Prev. 1.3%); Y/Y 4.3% (Prev. 4.3%).

European bourses (STOXX 600 -0.2%) opened tentatively on either side of the unchanged mark, and have gradually moved lower, alongside a pick-up in energy prices. The DAX 40 (+0.3%) is the outperforming major this morning, whilst the IBEX 35 (-1%) lags vs peers. As a reminder, the FTSE 100 is closed on account of the UK’s May Bank Holiday. The focus this morning has been on a) geopols and b) trade. (See geopolitical section above for details). On the trade front, Trump threatened the EU with 25% tariffs on European cars/trucks, after suggesting that the bloc is not complying with the trade deal. The White House said that it would implement the tariffs through Section 232, which are typically subject to long due process/probes. The Autos sector in Europe this morning has been mildly hit following Trump’s threat, with the likes of BMW (-1.3%) and Mercedes (-1.2%) on the backfoot, whilst Stellantis (-0.1%) remains fairly resilient. The divergence is explained by BMW/Mercedes importing many of their cars into the US through European factories, whilst Stellantis has a higher industrial presence within the region. European sectors are mixed. Media and Tech take the top two spots, whilst Autos and Media are the clear laggards. The Tech sector gains follow the strength seen in APAC trade overnight, whereby SK Hynix shares rallied 12%, as the sector reacted to continued optimism surrounding strong spending for AI data centres.

Top European News

• Some Labour MPs said it was imperative that Chancellor Rachel Reeves stayed in post to reassure markets even if there was a change of leadership. Labour MPs feared bond market chaos if Rachel Reeves was ousted alongside UK PM Starmer, according to The Sunday Times. Reeves and Starmer are expected to come under pressure if local elections go as badly as feared.
• Wes Streeting had the backing of enough Labour MPs to launch a leadership challenge within days, according to The Telegraph. He had reportedly recruited more than 81 MPs, the minimum needed to trigger a challenge. UK PM Starmer was alerted to Streeting’s plans after a Downing Street staffer accidentally texted details. Some Streeting supporters want him to strike as soon as the Friday after the local elections, according to The Telegraph.
• PM Starmer loyalists on Labour’s ruling body are no longer prepared to block Andy Burnham’s return to Parliament, according to The Telegraph.
• Cabinet allies of UK PM Starmer have reportedly urged Labour MPs to back the PM and avoid a leadership contest, FT reported.
• Wes Streeting is ready to launch leadership challenge against Starmer, The Telegraph reported; he has recruited enough MPs to trigger a contest, with supporters calling for him to strike after local elections next week.Andy Burnham has a plan to return to Westminster 'within weeks', according to the Guardian, citing allies.

FX

• G10s are mixed against a relatively flat USD; the Kiwi outperforms a touch, whilst the Swiss Franc marginally lags. Ultimately, price action has been lacklustre throughout the European morning, awaiting updates on the geopolitical and trade front.
• DXY remains within a 97.97 to 98.29 range, and well below its 100- and 200-DMA at 98.46 and 98.54, respectively. The Dollar has been moving incrementally higher throughout the European morning, alongside a bid in the energy complex. Focus has ultimately been on the geopolitical situation, whereby President Trump announced plans to guide neutral ships safely through the Strait, over the weekend. Unsurprisingly, this was met with resistance by the Iranians, with an official this morning spurring some mild risk off, after he said that the US would be attacked if they approach and enter the Strait of Hormuz.
• EUR is essentially flat, and trades around 1.1720 within a 1.1711 to 1.1750 range; the trough is in close proximity to both its 21- and 100-DMA at 1.1711 and 1.1709, respectively. The single currency has had several Final EZ Manufacturing PMIs to digest, but they were broadly subject to only very mild revisions. Also of note was the release of the ECB’s Survey of Professional Forecasters, which saw upward revisions to near-term inflation, whilst remaining unchanged on a longer-term basis. No move on this.
• JPY is currently flat vs USD this morning, but did experience some volatile trade in the Asia session, amidst thin liquidity (Japan on holiday for Golden Week). A sharp dip of circa. 38 pips was seen in USD/JPY overnight, but this move mostly pared as the session progressed. Touted intervention at this time, but markets will look for confirmation. MUFG opines that whether this bout of intervention proves effective, will depend on fundamentals such as Fed-BoJ policy divergence. In its base case, analysts see two BoJ hikes this year, which would allow “a gradual move lower in USD/JPY towards the 152 levels”. USD/JPY currently trades around 157.00 (vs 155.70 trough). The potential intervention today didn’t quite lead the pair down to recent troughs of 155.48; a level not seen since late-Feb of this year.
• India is reportedly mulling steps to make Dollar inflows more attractive, to help the weak INR, sources suggest; non-resident FX deposit scheme and tax reliefs on foreign government bonds are reportedly being looked into.

Fixed Income

• A slightly bearish start to the week, though conditions are thin on account of holidays in China, Japan and the UK.
• USTs down to a 110-15+ trough this morning, hit by an uptick in energy, which reverberated through on a wider airing of comments from Iran regarding the US' activity around Hormuz. At most, USTs have been lower by 5+ ticks. Ahead, we await remarks from Fed's Williams and then the financing estimates ahead of refunding later in the week.
• From Williams, we are attentive to his view on forward guidance after several Fed members, including three voters, objected to language implying the next move would be a cut. In his most recent remarks, Williams described policy as modestly restrictive and well-positioned, adding that the Middle East conflict was already lifting inflation.
• Bunds are in-fitting directionally, though in a slightly wider range and with modestly greater pressure on catch-up from the long weekend. Hit a 125.09 base with losses of 27 ticks at most, bottoming alongside the above move in USTs. No real reaction to the region's Final Manufacturing PMIs, or the latest ECB SPF, which saw near-term inflation revised up but the longer-term view maintained.

Commodities

• Energy benchmarks are at highs, firmer by in excess of USD 2/bbl for WTI and Brent and over EUR 0.50/MWh for Dutch TTF.
• Specifics for the space include US President Trump announcing Project Freedom, to get neutral vessels out of Hormuz. In response, Iran said US interference would be considered a ceasefire violation. Since, and prompting notable energy upside, the Iranian Major Abdullahi said any foreign forces, but particularly US, would be attacked if they approach and enter the Strait of Hormuz.
• The latter update was enough to lift WTI Jun'26 and Brent Jul'26 to highs of USD 104.36/bbl and USD 110.68/bbl, respectively. Gains that weighed on the equity and fixed income complexes while providing support to the USD. Note, this entirely overshadowed more constructive updates, such as the US handing over 22 crew members from the MV Touska, an Iranian container ship.
• Ahead, we have remarks from POTUS at 20:00BST. Before that, geopolitical updates around Hormuz or the Iranian proposals, which Trump said were unlikely to be accepted as Iran had "not yet paid a big enough price", will be in focus.
• Spot gold on the backfoot, as the inverse correlation between energy and the precious metal sends it to a USD 4574/oz low, with downside of near 1% on the session. Furthermore, conditions were a little thin overnight, given the absence of Japan and mainland China. The latter point is weighing on copper prices, while conditions there are thin on account of the UK holiday, and as such, there is no LME trade.
• Seven OPEC+ countries decided to implement a production adjustment of 188k BPD (as expected) in June 2026, according to OPEC. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman reaffirmed their commitment to market stability, said they would continue to monitor market conditions, and are set to meet again on June 7th. As a reminder, the UAE withdrew from OPEC and OPEC+ on May 1st, 2026.
• ADNOC said it would award USD 55bln in projects for 2026-2028 to advance its growth strategy. Co. said the awards would reinforce its five-year capital expenditure plan and support a new phase of project execution across its value chain to meet growing global energy demand.
• US President Trump said the US is producing and selling more oil right now.

Trade/Tariffs

• European Commission said it is implementing EU-US trade agreement with standard legislative practice; it is keeping US admin fully informed throughout. Will keep options open to protect EU interests if the US takes measures inconsistent with trade deal.
• US President Trump said his trip to China with President Xi will be great.
• US President Trump said EU is not complying with trade deal and he will increase tariffs on EU cars and truck imports into the US; tariff will be increased to 25%. It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF.
• Australian PM Albanese said Australia signed a joint declaration on economic security cooperation with Japan; agreement will make the countries more resilient to economic shocks and uncertainty. Australian PM noted a joint statement on critical minerals with Japan elevates critical minerals to a core pillar of economic and security relationship, and defence and security cooperation will further develop the already advanced defence relationship.
• UAE confirms ongoing discussions with the US on an FX swap agreement.
• EU Commission President von der Leyen said the Canada-EU partnership is strengthening.
• EU Parliamentary Delegation to the US Chair Benifei said he will call for the European Commission to bring out the "trade bazooka", as they need a mechanism that makes violating trade agreements too costly for the US.
• Australian PM Albanese said Australia signed a joint declaration on economic security cooperation with Japan; agreement will make the countries more resilient to economic shocks and uncertainty. Australian PM noted a joint statement on critical minerals with Japan elevates critical minerals to a core pillar of economic and security relationship, and defence and security cooperation will further develop the already advanced defence relationship.
• Japanese PM Takaichi is to meet with Australian PM Albanese to discuss energy and rare earths.

Central Banks

• ECB's Kazimir said policy tightening in June is all but inevitable. Europe is increasingly likely to face a prolonged period of broad-based price increases, with higher energy prices set to spread to the rest of the economy.
• ECB's Simkus said it is clear that they have deviated from the baseline scenario.
• ECB Survey of Professional Forecasters (Q2'26): Headline and core HICP inflation revised up in the near term, while remaining unchanged further out. Headline and core HICP inflation revised up in the near term, while remaining unchanged further out. Real GDP growth expectations revised down for 2026 and 2027, but unchanged thereafter. Unemployment rate expectations unchanged.
• ECB's Villeroy said they are facing an unprecedented shock. Expects France to have a deficit of 5% of GDP, should avoid a recession.
• ECB's Muller said ECB rate is at more-or-less neutral level and allows time to wait.
• ECB's Rehn said fast action is needed if second-round inflation is seen.
• ECB Wunsch FT interview: "Europe ‘naive’ in clinging to old economic model".
• RBNZ Board Member Gai said supply shocks such as the Hormuz situation have raised the neutral rate.
• BoK Deputy Governor said it is time to think about a rate hike, Yonhap reported; cites more resilient growth and higher inflation than expected.

US Event Calendar

• 10:00 am: United States Mar Factory Orders, est. 0.59%, prior 0%
• 10:00 am: United States Mar F Durable Goods Orders, est. 0.8%, prior 0.8%
• 10:00 am: United States Mar F Durables Ex Transportation, est. 0.9%, prior 0.9%