In 30 seconds: The ongoing Iran war has kept oil near $100/barrel, fueling broad inflation including record PPI freight costs and surging wholesale prices, while global bond yields hit multi-decade highs as markets worry about debt and structural inflation. The S&P 500 has surged to new all-time highs in 2026, driven by strong Q1 earnings with 82% of companies beating estimates, though breadth remains narrow and a gap has emerged between Wall Street performance and depressed consumer sentiment. Trump's high-profile China visit, accompanied by CEOs representing roughly $16 trillion in market cap, produced a disappointing Boeing jet order well below the 300-plane deal Macron secured in 2019, sending Boeing shares lower. April US economic data showed nominal retail sales in line with expectations but negative in real terms, while PPI surged at its fastest pace since 2022 and jobless claims ticked slightly above estimates, painting a picture of an income-squeezed consumer facing rising prices.
The basic arithmetic of war and oil is not subtle. Analysts had warned of $150-200 if the conflict dragged on. Roughly 175 million barrels of petroleum are floating on tankers in the Middle East Gulf. Food price inflation had calmed dramatically prior to the Iran War. Import prices rose 1.9% month-over-month, nearly double the 1.0% expectation, and 4.2% year-over-year against a 3.1% forecast. PPI final demand for both services and goods increased at the fastest pace since 2022. Profit margins for wholesalers and retailers are rising at a far faster pace than the recent historical norm. Bond markets have noticed. Yields on 30-year bonds in industrialised countries have soared to multi-year or multi-decade highs. Japan's 30-year bond yield spiked to 3.78%, a record. The warning is that this is a preview of what awaits the US if the deficit spiral continues unchecked. Meanwhile, US refined product inventories drew less than 1 million barrels, the smallest draw in seven weeks, though gasoline stocks fell 4 million barrels and residual fuel oil dropped 2 million. Propane inventories rose 4 million barrels.
The same Q1 earnings season beat rate driving the oil and inflation story is also a factor in the S&P 500 hitting record highs.
The S&P 500 closed at 7,501.24 on 2026-05-14, up 0.77% on the day, crossing above 7,500 for the first time. That marks the index's 18th new all-time high in 2026, which is notable because the historical average since 1957 is 18.5 per year. The index has already nearly used up a full year's quota of records before summer. The fuel is earnings. Earnings growth is running at 18% year-over-year, profit margins sit at 15.6%, and investment-grade credit spreads have compressed to 77 basis points, a record low. When companies are making more money than analysts expected and credit markets are pricing in almost no risk, the index tends to go up. The trouble is under the hood. The rally off the March 31 low has been lopsided: the cap-weighted index soars to new highs while the equal-weighted version remains below its pre-war highs. Breadth, in other words, is narrow at best. Meanwhile, the gap between the index at an all-time high and consumer sentiment at an all-time low has never been wider. One reading of this divergence is that it reflects a currency/inflation issue: asset prices denominated in dollars look great, but the dollars themselves buy less at the grocery store. The S&P 500's year-to-date return of 9.6% happens to match its average annual return of 9.6% since 1950. Stocks, it turns out, mostly go up. The question is whether anyone outside the market feels it.
The optics of a presidential trade mission are supposed to be simple: you fly in with corporate royalty, you fly out with deals, everyone claps. Trump brought along CEOs representing roughly $16 trillion in combined market capitalization, a figure that roughly equals the entire Chinese domestic stock markets in total. French President Macron got a 300-jet order back in 2019, at a time when the US was tariffing China heavily. Expectations for this announcement weren't met. The smaller delegation reflects the administration's awareness of the tension between bringing a large convoy and its rhetoric around derisking and reshoring.
Initial jobless claims rose to 211,000 for the week ending 2026-05-09, up 12,000 from the prior week's 199,000 reading. That is a 6.03% increase on the week, which sounds dramatic until you remember these are weekly numbers that bounce around like a toddler on a sugar high. Still, the direction matters when you are trying to read the room. Initial jobless claims: 211,000.
Here is what it costs to borrow money right now.
30-year fixed mortgage: 6.36%, down 1 bp on the week
15-year fixed mortgage: 5.71%, down 0.17% on the week
Auto loan rate (60-month): 7.52%, up 4.16% on the quarter
Credit card rate: 21.00%, up 0.14% on the quarter
Prime rate: 6.75%, flat on the day