Who Pays for the Calm on the Screens
Asian stock markets were mostly higher as investors reacted to hopes that tensions tied to the war with Iran could ease, while U.S. futures edged lower. The numbers moved up and down on trading screens, but the pressure underneath stayed with ordinary people: the war has stifled the flow of oil shipments through the Strait of Hormuz, through which roughly a fifth of the world's oil and natural gas is shipped. That choke point has helped push up gasoline prices and a wide range of goods, feeding inflation and squeezing consumers and businesses.
Japan's Nikkei 225 surged 1.8% to 65,814.96 after data showed May core inflation in Tokyo rose more slowly than expected. Australia's ASX 200 rose about 1%. Wall Street also gained ground, with the S&P 500 rising 0.2% to 7,580.06, the Dow Jones Industrial Average gaining 0.7% to 51,032.46 and the Nasdaq composite adding 0.2% to 26,972.62. The S&P 500 set an all-time high for the fourth day in a row, notched its seventh consecutive gain and its ninth straight winning week, the longest such streak since 2023.
The Market's Winners and Losers
In May, the S&P 500 rose 5.1% and was up 10.7% for the year. Microsoft rose 5.4% and Broadcom gained 4.7%. Dell Technologies surged 32.8% after delivering profits that beat expectations and raising its outlook, citing strong demand for AI computing. Among other decliners, Paramount Skydance fell 1.9%, Amazon.com dropped 1.2% and Costco Wholesale closed 3.9% lower.
Angelo Kourkafas, senior global strategist at Edward Jones, wrote in a research note, "The rally has been largely tech-led and supported by resilient earnings, but the key question is whether it can be sustained." That question hangs over a market that keeps rewarding the biggest firms while the costs of war, tariffs and inflation keep landing elsewhere.
Oil, Inflation, and the People Underneath
The U.S. and Iran were reportedly working toward a deal to extend a ceasefire, easing pressure on oil prices. Brent crude for August delivery fell 1.7% to settle at $91.12 per barrel, while benchmark U.S. crude oil for July delivery fell 1.7% to settle at $87.36. Brent was still well above the $70 per barrel level in late February before the war began.
Treasury yields held relatively steady, with the 10-year Treasury slipping to 4.44% from 4.45% late Thursday. The Federal Reserve has been holding its benchmark interest rate steady as it watches inflation and is expected to continue holding rates steady at its next meeting in June and through the year, according to CME's FedWatch tool. Cutting rates could lower borrowing costs and help the economy, but it could also worsen inflation.
Several reports this week showed inflation's rise and its impact on consumers. A measure of inflation preferred by the Federal Reserve accelerated in April to its highest level in three years, and consumer confidence is slipping amid the squeeze from rising inflation. Prices were already rising before the war began because of the ongoing impact of tariffs.
What the Powerful Call Stability
Companies in the S&P 500 have reported profit growth of 28% overall for the most recent quarter, according to FactSet, and the overwhelming majority have already reported their latest results. Markets in Europe and Asia mostly rose. The broad picture is familiar: profits climb, indexes celebrate, and the costs of war, tariffs and inflation are pushed down onto workers, consumers and businesses while the institutions at the top debate whether the squeeze is manageable.
The war has stifled oil shipments through a route that carries roughly a fifth of the world's oil and natural gas, and the resulting price pressure has rippled through gasoline and goods. Even as traders cheer hopes of a ceasefire extension, the underlying machinery of domination keeps moving: conflict disrupts supply, markets reprice the damage, and everyone else is left to absorb the bill.