May 12, 2026

Xi warns Trump on Taiwan as tariff-easing framework is floated

US-China talks formally began with cooperative language but clear Taiwan risk, while AI and commodity-linked stories drove the cleaner equity reads.• China/Summit: Trump and Xi opened the Beijing summit; Xi warned that mishandling Taiwan could lead to “collision or even conflict,” while Trump said ties would be “better than ever before.”• Trade/Policy: Reuters reported, citing people familiar, that both sides are weighing a framework to identify about $30 billion of goods each for possible tariff relief.• China Tech: Hong Kong tech opened sharply higher, with Alibaba up 7.8% and Tencent up 2.5%, though mainland gauges later slipped as traders took profits.• Data Centers: Blackstone’s digital-infrastructure REIT raised $1.75 billion in the largest REIT blind-pool IPO; AirTrunk is also marketing a $2.3 billion Malaysia loan.• Commodities: India banned sugar exports through September, tightening global supply risk.

Warsh wins Fed confirmation as Cisco forecasts beat estimates

Rates and AI-linked equity dispersion dominated the afternoon, with political risk around the Fed rising while select tech and industrial names rallied on company-specific catalysts.• Fed/Rates: The Senate confirmed Kevin Warsh as Fed chair 54-45, the narrowest margin for a Fed chief since confirmation became required. A $25 billion 30-year auction awarded at 5.046%, the first 5%-plus long-bond yield since 2007.• Tech/AI: Cisco guided July-quarter revenue to $16.7 billion-$16.9 billion versus the $15.8 billion estimate and announced job cuts to redirect spending toward AI infrastructure; shares jumped after hours.• Autos/Energy Storage: Ford rose about 14%-15% after Morgan Stanley highlighted Ford Energy and said the storage unit could be worth $10 billion.• Geopolitics/Energy: WSJ reported Saudi Arabia and Kuwait struck Iran-backed militias in Iraq during the war, while U.S. crude still settled down 1.1% at $101.02.

PPI jumps as US fires Hormuz warning shots

Hot wholesale inflation and fresh Gulf enforcement headlines pushed the mix back toward higher rates and persistent energy risk.• Macro/Rates: April PPI rose 1.4% month over month and 6% year over year, above the 0.5% consensus; core PPI rose 5.2%, and the 10-year yield touched 4.49%, the highest since July.• Hormuz/Shipping: Centcom said U.S. forces fired warning shots at two commercial vessels, diverted 67 ships, disabled four and allowed 15 humanitarian vessels through the blockade.• Oil/Supply: Saudi Arabia told OPEC April output fell another 651,000 b/d to 6.316 million, the lowest since 1990; OPEC output fell 1.727 million b/d.• Logistics: Gulf shippers expanded Hormuz bypasses, with Maaden using 3,500 trucks and Khor Fakkan’s daily truck traffic rising to 7,000 from 100.

Trump lands in Beijing as Kharg jetties stay empty

Risk tone was modestly firmer before the open, but energy logistics and China-linked earnings kept macro and single-name risk active.• China/Summit: Trump landed in Beijing for the first US presidential visit to China since 2017; S&P 500 futures were up 0.2% ahead of Thursday talks with Xi.• Energy/Shipping: Bloomberg satellite images showed Iran’s Kharg Island oil jetties empty again Tuesday, the fourth consecutive observed period with no tankers at the main export facility.• Hormuz/Shipping: WSJ said Cosco’s Yuan Hua Hu crossed Hormuz through the IRGC-controlled northern corridor without paying tolls; at least five other Cosco tankers remain trapped in the Gulf.• China Tech: Alibaba revenue missed estimates at 243.4B yuan, while Ant’s implied profit fell 79% on AI and health-care investment costs.• AI Cloud: Nebius reported a 684% first-quarter sales jump to $399M on data-center demand.

Oil falls after IEA flags deeper demand destruction

Energy stress remained the main macro input, but the latest oil reaction was lower as demand destruction offset tighter supply. China-tech and India headlines added equity dispersion.• Oil/IEA: The IEA said observed inventories fell about 4M b/d in March-April and supply losses reached 12.8M b/d, but it cut 2026 demand by 420,000 b/d versus an 80,000-b/d drop; WTI fell 1.1% to $101.02 and Brent 2% to $105.63.• India/Macro: India more than doubled gold and silver import duties to 15% to conserve FX; Nifty has fallen about 3% this week, while Kalyan Jewellers dropped 17% over three days.• Tech/China: Trump personally invited Jensen Huang after press reports; WSJ said Beijing still has not approved Nvidia H200 shipments, while MiniMax rose as much as 18% and Zhipu 38%.• Earnings/AI: Tencent missed revenue estimates at 196.5B yuan despite higher profit, increasing scrutiny of its planned AI spending.

Hormuz risk widens as copper nears record

Overnight news tilted inflationary and supply-constrained: Hormuz remained hazardous, China-linked goods and metals showed cost pressure, and Nvidia regained a seat at the China summit table.• Energy/Shipping: Iran said the Strait of Hormuz now spans a much larger “operational area”; Windward cited a 600% rise in dark activity, and Cosco’s Yuan Hua Hu attempted a rare VLCC exit.• Tech/China: Jensen Huang joined Trump’s China trip at the last minute; Nvidia said he was invited, and shares rose 2.3% after hours.• Metals/Miners: Copper topped $14,000/ton on LME and Comex hit a record $6.69/lb as supply tightened; FCX and SCCO are exposed.• Retail/Inflation: Chinese suppliers to Walmart and Costco raised holiday-goods prices 5%-15%, citing materials, energy, yuan strength and Iran-related disruptions.• IPO/Energy: Fervo raised $1.89B above range, valuing the geothermal developer at $7.7B.

Oil holds gains after US intelligence shows Iran retains missile capabilities

Energy and rates risk stayed elevated after fresh evidence challenged claims that Iran’s military threat had been neutralized, while AI-linked equities split between chip profit-taking and private-market demand.• Iran/Energy: U.S. intelligence assessments showed Iran regained access to 30 of 33 missile sites near Hormuz and retains about 70% of mobile launchers and prewar missile stockpiles.• Oil/Inventories: The EIA now expects global oil inventories to fall 2.6 million barrels a day in 2026, versus a prior 300,000-barrel decline, assuming Hormuz stays closed until late May.• Semiconductors: The Philadelphia Semiconductor Index ended down 3% after falling as much as 6.8%; Micron fell 11%, Qualcomm 6.8% and Intel 3.7%, while Nvidia finished higher.• Utilities: AEP fell 2.5% after hours on a planned $2.6 billion share sale.• AI/IPO: Cerebras is expected to price above range after orders reportedly topped 20 times shares available.

Yields climb as Warsh wins Fed board seat

Rates, energy and policy risk dominated, while single-name tech and health-care headlines added sector dispersion.• Rates/Fed: The 10-year Treasury yield settled at 4.462%, its highest close since last summer; futures priced roughly 35% odds of a Fed hike this year, and the Senate confirmed Kevin Warsh to the Fed board 51-45 before a separate chair vote.• Energy/Shipping: Three tankers that cleared Hormuz on Monday had not reached open seas; Bloomberg said Kharg Island shipments showed their first prolonged halt of the war, while Kuwait accused Iran of an IRGC island infiltration that Tehran denied.• Trade/Tariffs: An appeals court temporarily paused a ruling against Trump’s latest 10% global tariffs, even as the administration said $35.5B of tariff refunds had been cleared.• Health Care: FDA Commissioner Marty Makary resigned after pressure tied to flavored e-cigarette approvals.• Tech: Google unveiled Android 17 AI features and a Googlebook laptop platform.

CPI hits 3.8% as Pentagon raises Iran war cost

Official data hardened the inflation and rates backdrop while Iran-related cost and shipping headlines stayed adverse for risk.• Macro/Rates: April CPI rose 0.6% m/m and 3.8% y/y; core rose 0.4% and 2.8%, with airfares up 20.7% y/y. Two-year yields were about 3.99%, and the S&P 500 opened down roughly 0.4%.• Defense/Iran: The Pentagon raised its Iran-war cost estimate to about $29B from $25B; munitions and damaged or destroyed aircraft account for about $24B, and Democrats sought a detailed breakdown by June 11.• Energy/Shipping: Centcom said 65 ships have been rerouted under the Iran blockade. Vietnam asked the US to let a tanker with 1.99M barrels of Iraqi crude through, while a second Qatari LNG cargo cleared Hormuz.• Geopolitics: WSJ/Bloomberg reported the UAE secretly struck Iranian refinery and petrochemical targets and coordinated with Israel; UAE officials declined comment.

Oil climbs after Iran raises weapons-grade enrichment threat

Risk tone stayed defensive, with Middle East negotiations hardening, UK political risk feeding into banks and several US single-name movers active premarket.• Energy/Geopolitics: Trump said Iran was “under control” but warned it could be “decimated”; an Iranian lawmaker said parliament could consider 90% uranium enrichment if attacked again. Brent traded around $107.• UK/Banks: Barclays, NatWest and Lloyds fell about 4% after JPMorgan raised its base case for the UK bank surcharge to 5% from 3% under possible new Labour leadership.• M&A/Retail: EBay rejected GameStop’s $56 billion unsolicited offer as “neither credible nor attractive”; GameStop fell about 4% premarket.• China/Ag: Chinese officials discussed buying US corn, sorghum, distillers grains and soybeans before Trump’s Xi meeting; volumes remain unsettled.• Consumer: On Holding raised margin guidance, while Under Armour dropped up to 17% on weak sales and profit guidance.

CPI tops forecasts as Starmer defies calls to quit

Risk news turned more inflationary and politically unstable, with US CPI, UK gilts and Gulf shipping all adding pressure before the US open.• Macro/Rates: WSJ reported April CPI rose 3.8% year over year, above the 3.7% forecast; core inflation edged up to 2.7% from 2.6%.• UK/Politics: Starmer told his cabinet he would stay as prime minister and said Labour’s leadership challenge process had not been triggered, despite more than 80 Labour MPs calling for him to step aside.• UK/Rates: The 10-year gilt yield hit 5.12%, the highest since 2008, while the 30-year reached 5.79%, the highest since 1998; sterling fell around 0.5% against the dollar.• Energy/Shipping: Qatar asked ships at Ras Laffan to turn off transponders, and at least nine LNG tankers stopped sending signals from May 11.• Health Care: Bristol-Myers agreed to a Hengrui licensing pact worth up to $15.2 billion, including $600 million upfront.

Adnoc Gas flags Hormuz hit as BOJ signals June hike risk

Energy-supply damage, Japan policy risk and AI/data-center demand were the main overnight additions, with broader risk appetite still evident outside Korea’s policy scare.• Energy/Gas: Adnoc Gas said the UAE’s Habshan plant is at about 60% capacity after April attacks, should reach 80% by year-end and full capability in 2027; a Hormuz closure may cut 2Q earnings by $400 million-$600 million.• Japan/Rates: The BOJ summary signaled a possible June 16 rate hike despite Middle East risks; traders price 77% odds. Japan said it coordinated FX policy with Bessent after suspected yen intervention.• China/Policy: The White House set the Trump-Xi meeting for Thursday morning in Beijing, with trade, Iran revenue links, Taiwan arms and Jimmy Lai on the agenda.• AI/Stocks: South Korea’s AI-profit tax comments sent the Kospi down as much as 5.1% before paring; Siemens Energy accelerated buybacks by up to €1 billion on data-center orders.

Warsh advances toward Fed chair as US releases more emergency oil

Late news added a monetary-policy catalyst, fresh energy-policy intervention and more evidence that AI-linked risk appetite offset inflation stress.• Fed/Rates: The Senate voted 49-44 to advance Kevin Warsh’s Fed nomination, setting up a board vote Tuesday and a chair vote later this week; the 10-year yield settled at 4.411%.• Energy/Policy: The DOE awarded 53.3 million SPR barrels for June-August release, led by Trafigura, Marathon and Exxon, while Treasury sanctioned 12 Iran-linked oil-sale facilitators tied to China.• Equities/AI: The S&P 500 and Nasdaq Composite closed at records, up about 0.2%; the PHLX Semiconductor Index rose 2.6%, with Intel, Nvidia and Micron active.• Health Tech: Hims fell after revenue of $608 million missed the $617.5 million estimate and the company posted a 40-cent loss.• UK/Politics: At least three cabinet ministers urged Starmer to consider his position; 30-year gilt yields rose 10 bps to 5.67%.

Trump weighs Hormuz escorts as Starmer allies resign

Geopolitical and UK political risk intensified, while US data and policy headlines added inflation crosscurrents ahead of CPI.• Hormuz/Security: Trump said he is considering restarting Project Freedom to move ships through Hormuz; WSJ said Gulf states have lifted earlier base and airspace restrictions, while Iran said it deployed Ghadir-class mini-subs.• UK/Politics: Pressure on Starmer escalated as government aides resigned and more than 55 Labour MPs urged him to go; 10-year gilt yields returned to 5% and 30-year yields rose to 5.67%.• Rates/Macro: Existing-home sales rose just 0.2% to a 4.02 million pace, below forecasts; Goldman pushed its Fed-cut call to December 2026 and BofA to July 2027.• China/CEOs: The White House listed Musk, Cook, Ortberg and Wall Street CEOs for Trump’s China trip; Nvidia’s Jensen Huang was not invited as H200 approvals remain pending.• Consumer/Inflation: Trump backed suspending the 18.4-cent federal gas tax and planned beef-price orders; cocoa jumped 13% to $4,709 a ton.

Tanker traffic trickles through Hormuz as Cerebras boosts IPO

Risk tone was mixed: a small Hormuz reopening signal eased the worst-case energy narrative, but shipping executives and UK rates still pointed to stress.• Hormuz/Shipping: Kpler said three oil tankers exited Hormuz Sunday after three days with none, though Iran state media said only one approved tanker passed; Norden is assuming trapped ships may stay stuck through year-end.• AI/IPO: Cerebras raised its IPO range to $150-$160 from $115-$125, seeking up to $4.8 billion and a $34.4 billion valuation; Bloomberg said orders exceed shares by more than 20 times.• UK/Rates: Thirty-year gilt yields rose to about 5.68% as Labour dissent persisted, after Catherine West dropped an immediate challenge but pushed for Starmer to set an exit timetable.• Private Credit: KKR will inject $300 million into FS KKR Capital after NAV fell 9.9%, non-accruals hit 4.2% and the dividend was cut.

Oil rises after Trump says Iran truce is on life support

Energy and political risk dominated, with Gulf logistics still impaired and UK assets reacting to a direct leadership challenge risk.• Iran/Oil: Trump said the Iran cease-fire was on “massive life support”; NYT said Tehran sought war reparations, sanctions relief and recognition of sovereignty over Hormuz. US gasoline topped $4.55.• Gulf/Shipping: Saudi June crude exports to China are set to fall to 13 million-14 million barrels, from 20 million in May and 40 million-50 million prewar; Qatar’s Mihzem LNG tanker approached Hormuz for Pakistan.• UK/Politics: Starmer said he would not quit and would contest any leadership challenge; 30-year gilt yields rose to 5.64%, and sterling slipped 0.2%.• Private Credit: WSJ said Apollo is in talks to sell MFIC, valued near $3 billion, after defaults rose to 5.3%; MFIC shares fell 5%.• AI Funding: Amazon prepared its first Swiss-franc bond sale to fund AI spending.

China confirms Trump visit as China factory inflation tops forecasts

Asia news skewed inflationary but added a potential US-China diplomatic catalyst, while energy costs kept feeding through to shipping and autos.• US/China: Beijing confirmed Trump will visit China May 13-15 for Xi talks covering Iran, a trade-truce extension, rare earths, Taiwan and expected agriculture/Boeing deals.• China/Macro: April PPI rose 2.8% year over year versus 1.8% expected, the fastest since July 2022; CPI unexpectedly rose 1.2%, lifting the yuan and pressuring Chinese bond futures.• Hormuz/Shipping: South Korea said external strikes hit HMM Namu on May 4, with two unidentified aerial objects striking the stern; Seoul did not assign blame.• Autos/China: Passenger-car sales fell 21.5% in April; BYD sales fell 16% and Tesla China sales fell 10%, though JPMorgan said BYD still expects 2026 domestic growth.• Europe/Rates: A Bloomberg survey now sees two ECB hikes in 2026, in June and September, as war-driven inflation rises.