Markets are eyeing Middle East headlines, trying to figure out if the ceasefire will hold. Stocks fell yesterday, but they’re bouncing in early trading today. In other markets, crude oil is flat along with Treasuries, gold and silver are up a bit, and the dollar is modestly lower.
What do you call a ceasefire where neither side has fully ceased firing? That’s what investors are wrestling with here. Yesterday, Iran attacked US warships with missiles, drones, and small boats…and the US responded by hitting the Iranian sites where the attacks came from. Today, the United Arab Emirates reportedly had to defend itself against new missile and drone strikes from Iran – while Iran announced the seizure of a Chinese-owned oil tanker.
Brent Crude Oil Futures (YTD)
Source: TradingView
President Trump characterized the incidents in separate interviews as a “trifle” and “love tap.” He added that the ceasefire remains in place – and Iran is said to be prepping a response to the US’s Memorandum of Understanding. Amid the conflicting headlines, Brent crude oil futures are trading flattish around $100 a barrel today. That’s down from Monday’s peak of $114-and-change, but well above pre-conflict levels of $65-$70.
On the economic front, the US economy added 115,000 jobs in April – roughly double what economists were expecting, though down from 185,000 in March. The unemployment rate held steady at 4.3%, while average hourly earnings ticked up 0.2%. The former number matched forecasts, while the latter came in a little light.
Tech layoffs tied to AI adoption are getting a lot of headlines – and some parts of the economy, like housing, remain weak. But other sectors are holding up okay, and the AI spending boom is propping up growth overall. The data will likely continue to keep the Federal Reserve on hold with interest rates. Its next two policy meetings conclude on June 17 and July 29.
Finally, Anthropic could soon become the next $1 trillion-plus tech titan. The Financial Times reported that the AI company behind Claude may raise another huge round of capital this summer at that valuation. It’s gobbling up money to invest in its business, including up to $40 billion in a recent Alphabet Inc. (GOOGL) funding round and up to $20 billion from Amazon.com Inc. (AMZN). Those transactions and a separate one in February valued Anthropic at “just” $350 billion.
