At a Glance

💥 Armed clashes broke out between the US and Iran near the Strait of Hormuz, though Trump stated the ceasefire remains in effect, pushing crude oil slightly lower.

📉 Major US indexes retreated; the S&P 500 fell 0.38% and Nasdaq dropped 0.13%, as markets awaited nonfarm payroll data.

🛢️ WTI crude closed down 0.28% at $94.81/bbl. The geopolitical premium was not repriced amid expectations of limited escalation.

📌 A US trade court ruled Trump’s 10% global tariff unlawful; the Bank of Japan likely intervened in FX markets with roughly ¥5 trillion.

1. Market Outlook

Key Event

Fresh clashes erupted between US and Iranian forces around the Strait of Hormuz. Iran accused the US of attacking its oil tanker and civilian vessels, while the US stated it took self-defense action against unprovoked Iranian assaults on a Navy destroyer, inflicting heavy losses on Iranian forces. Trump commented that retaliatory strikes were limited in scope and the broader ceasefire framework remains valid. Separately, the Trump administration invited top executives including NVIDIA CEO Jensen Huang and Boeing CEO Kelly Ortberg to join the presidential visit to China.

Market Reaction

All three major US indexes closed lower, with the S&P 500 down 0.38%. Market reaction to the skirmish stayed muted, anchored by Trump’s remarks ruling out full escalation. Crude edged down to $94.81/bbl with no fresh geopolitical premium priced in. Gold ticked up 0.38% to $4,699.8, silver surged 3.76%, while Bitcoin slipped below $80,000.

Exclusive View

Trump’s remarks were clearly designed to manage market expectations. By framing strikes as limited retaliation while affirming the ceasefire holds, he signaled no full breakdown in diplomacy. Markets took the cue, resulting in mild oil losses and only modest equity declines. The true focal point tonight is nonfarm payrolls. Following the stronger-than-expected ADP reading of 109,000, a moderate payroll print will reinforce soft-landing pricing; a sharp upside surprise will reignite speculation over potential Fed rate hikes.

2. Overnight Markets

Key Market Summary

US-Iran hostilities broke out yet the ceasefire remains recognized. US equities pulled back, crude edged lower, with markets adopting caution ahead of payrolls.

U.S. Equities

• S&P 500: -0.38% to 7,337.11
• Nasdaq Composite: -0.13% to 25,806.20
• Dow Jones: -0.63% to 49,596.97

💡 Initial volatility emerged on clash news, but Trump’s reassurance limited downside. NVIDIA and Boeing faced stock volatility on news their CEOs were invited to the China trip. Trading sentiment stayed cautious ahead of key payroll data.

European Equities

Pan-European STOXX 600 closed -1.1%, with major markets across France, Germany and Britain finishing lower.

💡 European benchmarks underperformed US peers, reflecting higher sensitivity to any supply disruption risks in the Strait of Hormuz. Energy security concerns remain unresolved.

Fixed Income

The US 10-year Treasury yield dipped to 4.314% — the lowest since April 27 — before rising 3.2 bps to 4.386% at the close. The 30-year yield added 2.3 bps to 4.966%.

💡 Safe-haven demand initially pulled yields lower on geopolitical jitters, before a rebound followed assurances of contained conflict. Bond markets lacked clear directional bias ahead of payrolls.

Commodities

• WTI June Crude: -0.28% to $94.81/bbl
• Brent July Crude: -1.19% to $100.06/bbl
• COMEX May Gold: +0.38% to $4,699.8/oz
• COMEX May Silver: +3.76% to $79.701/oz
• COMEX May Copper: -0.15% to $6.1275/lb

💡 The skirmish failed to trigger an oil rally as markets accepted the official stance of contained escalation. Silver outperformed gold sharply, reflecting improving industrial metal sentiment.

Foreign Exchange

Euro closed -0.19% at 1.1725; Sterling fell -0.29% to 1.3551; USD/JPY rose 0.33% to 156.91; AUD dropped -0.37% to 0.7209.

💡 The US Dollar Index edged higher. Yen gave up part of its gains after suspected BOJ intervention of around ¥5 trillion, settling near 156.91.

Cryptocurrency

Bitcoin broke below $80,000 to $79,759; Ethereum tumbled over 2.5% to $2,288.18.

💡 Risk appetite softened, pushing Bitcoin below the key $80,000 level alongside weaker US equities.

3. Macro News

⚖️ US Trade Court Overrules Trump’s 10% Global TariffThe court ruled the blanket tariff measure lacked legal authorization under relevant US trade legislation from the 1970s.

Insight: It marks the first major legal setback for Trump’s tariff agenda. The ruling may face appeal, while the administration could pursue alternative legal routes to reimpose similar measures. Tariff uncertainty rises in the near term.

🇯🇵 BOJ Likely Intervened with ¥5.01 Trillion in Currency MarketsMarket forecasts showed a projected net outflow of ¥4.51 trillion the next day, far exceeding mainstream broker expectations.

Insight: Official intervention near the 160 threshold is clearly evidenced. Intervention can only slow yen depreciation rather than reverse the USD-JPY trend driven by yield differentials. The 156–160 range will become a key consolidation zone.

🌐 19 Nations Launch WTO-Bypassing E-Commerce Duty ExemptionStalled by deadlock with Brazil, the US, Japan, South Korea, Singapore, Australia and others agreed to waive tariffs on digital commerce, taking effect Friday.

Insight: Another clear shift toward plurilateralism over multilateral frameworks. The WTO’s negotiation role is further marginalized, with digital trade rulemaking shifting toward bilateral and plurilateral alliances.

🗣️ NY Fed President Williams: US Treasury Demand Remains Strong Despite Heavy Government BorrowingWilliams noted the Fed is closely monitoring record fiscal borrowing levels.

Insight: Williams’ remarks aimed to soothe market concerns over weak auction demand. His cautious tone also signals growing internal Fed worries over widening fiscal deficits.

📊 US Q1 Nonfarm Productivity Annualized Growth Slows to 0.8%Labor Department data showed further moderation, though AI investment may reverse the slowdown in coming quarters.

Insight: Slower productivity growth adds to stagflation pressure via rising unit labor costs and softer output expansion. Several more quarters of data are needed to confirm whether AI can lift macro productivity sustainably.

4. Corporate News

🚀 xAI Leases Computing Power to Cursor & Anthropic, Launches SpaceX Orbital Data Center ConceptFollowing muted market response to Grok, Musk’s AI strategy has shifted from model sales toward computing capacity leasing, mirroring CoreWeave’s business model.

— Musk is combining cash flow generation via GPU leasing with a high-value narrative around orbital data centers. Markets will judge whether the shift represents genuine transformation or branding repositioning.

☁️ CoreWeave Q1 Revenue Jumps 112% But Losses Widen; Q2 Guidance Disappoints, Stock Drops Over 10% After HoursOrder backlog reached $994 billion (+284% YoY), while Q1 capex hit $6.786 billion and adjusted net loss expanded to $589 million.

— As a benchmark player in AI compute leasing, CoreWeave’s surging revenue alongside widening losses signals the sector remains in heavy investment mode with no clear profitability inflection yet. Disappointing Q2 guidance stokes concerns over cooling demand momentum.

🏫 American Federation of Teachers Urges SEC to Scrutinize SpaceX $2 Trillion IPO ValuationThe union argued the valuation decouples from fundamental performance, warning pension funds may face pressure to support inflated stock pricing.

— Rare instance of a major public union directly challenging a mega IPO valuation. SEC scrutiny over the $2 trillion figure could delay SpaceX’s listing timeline.

🍔 McDonald’s Beats Q1 Revenue & Earnings Estimates But US Same-Store Sales DisappointNew premium menu items and membership programs drove growth, while elevated crude prices squeezed low-income purchasing power. The brand is expanding its $3–$4 value menu to counter inflation pressure.

— McDonald’s results act as a reliable barometer for US consumption: overall resilience remains intact while low-income households face mounting inflation pressure. Value menu expansion signals softer spending at the consumer base.

🎧 Apple Camera-Equipped AirPods Enters Late Development StageSet to become Apple’s first wearable device built natively for the AI era.

— Apple is exploring new wearable hardware carriers for AI interaction. Integrated cameras will enable a new paradigm combining visual input and audio output, poised to reshape the wearable market if officially launched.

5. Key Events to Watch Today

📊 US April Nonfarm Payrolls: A moderate print of 150k–200k will extend soft-landing pricing; a strong upside surprise or a reading below 100k will trigger rate-hike or recession trades respectively.

📈 May University of Michigan Consumer Sentiment & Inflation Expectations: Despite lower crude prices staying above $95, shifts in inflation views will influence Fed policy rhetoric.

🇯🇵 Japan April Services & Composite PMI: With yen lingering between 156–157, PMI data will test domestic demand strength and implications for BoJ rate outlook.