In 30 seconds: The 90-day closure of the Strait of Hormuz has sent oil and energy prices sharply higher, with a tentative US-Iran 60-day MOU to reopen the strait under negotiation while US petroleum stocks draw down at record rates. Analysts debate how Europe and the US should respond to China's export-driven economic model and industrial policy dominance, as EU-China trade shifts toward unbalanced dependence and Chinese firms continue expanding globally despite geopolitical tensions. April PCE inflation held at 3.8% headline and 3.3% core while Q1 GDP was revised down to 1.6%, with real disposable incomes falling and the personal savings rate dropping to a multi-year low of 2.6%, painting a picture of consumers under financial stress. The anticipated SpaceX IPO is drawing comparisons to Amazon's 1997 debut as the S&P 500 Technology sector posts back-to-back 10%+ monthly gains not seen since 2009, with AI-driven investment continuing to power equity market strength.
After 90 days of closure, the Strait of Hormuz crisis has produced what observers are calling the largest ever oil supply shock. Brent crude sits at roughly $96 a barrel, up 40.5% versus the 2025 average. The energy shock has radiated across every fuel complex: ~€47 per mBtu for TTF nat gas, up 31.7%; Newcastle coal at $131.8 per tonne, up 23.8%; German electricity at €93 per MWh, up 6.5%. US natural gas closed at $3.30, jumping 8.4% on the day. The diplomatic picture is tentatively brightening. Reports indicate the US and Iran have tentatively reached a 60-day memorandum of understanding covering a ceasefire extension, nuclear talks, and reopening of the strait. Total US petroleum stocks fell 17.4 million barrels in the latest week, with crude stocks alone dropping 12.4 million barrels. Gasoline inventories are now crashing below seasonal lows. Refiners are responding where they can. US jet fuel production hit roughly 2.07 million barrels per day last week, the second highest ever recorded, with output exceeding 2 million barrels per day for six consecutive weeks. Whether that relief lasts depends on whether the deal gets signed — President Trump has not yet agreed to the document.
China's economic model combines a rigged domestic market with a fierce export sector fueled by an undervalued currency. There is ample evidence that import substitution in China is a policy outcome — explicit Chinese preferences in EV subsidies that helped create the Chinese industry are a textbook case. Add near complete control of the refining of the most strategic of the rare earths and you have a state that has systematically tilted every playing field it touches. EU-China trade is shifting from (somewhat) balanced interdependence to unbalanced dependence. This shift carries negative economic and strategic consequences. Germany is the poster child: it has spent more than half a decade talking about de-risking from China, yet German firms are expanding their operations in China while remaining heavily reliant on Chinese suppliers. Even where a company's share of revenue has fallen versus other markets, their absolute exposure has often increased. The European Commission announced a fine of €200 million on Temu for distributing illegal goods. EV tariffs have worked. There has been no China shock in US autos. ICE tariffs also worked; they kept Ford and GM from using their Chinese JVs to supply the US market. China has maintained auto tariffs of 25% for a very long time. Solar tariffs, though, illustrate the trap: solar tariffs kept First Solar alive and kept a few Korean companies doing assembly of Korean cells in the US, but were not restrictive enough to create a domestic industry while still raising costs. The worst of all worlds. The lesson is that tariffs not restrictive enough to create a domestic industry still raise costs without building capacity. CXMT cleared Shanghai listing review, and could become China's largest IPO this year and second-largest debut in the history of Shanghai's tech-focused board. MiniMax M3 model is being positioned as the first open-source, native multimodal model, with MiniMax annualized revenue more than doubled over the past 2 months to at least $300 million. Chinese companies have committed an additional $1.1 billion in investment in Serbia. On the macro side, China's producer prices have finally moved back above positive, after a long stretch of producer-price deflation, but the rebound is cost-pushed, not demand-led. Asia's surplus economies keep piling up: Korea's Q1 current account surplus annualized hit $340 bn, while Taiwan's reached $250 bn. The BoK's forecast may be a tad conservative, given the q1 surplus annualized was close to $340 bn.
Initial jobless claims came in at 215,000 for the week ending 2026-05-23, up 5,000 from 210,000 the prior week. Initial jobless claims: 215,000.
The comparison du jour is Amazon, which went public in June 1997 at a market cap of $442 million. The SpaceX IPO comes after 24 years as a private company, compared to Amazon's less than three years from founding to IPO. S&P 500: 10%. The S&P 500 closed at 7,563.63 on 2026-05-28, up 0.58% on the day. Prior to 2009, back-to-back 10%+ monthly gains for the S&P 500 Technology sector occurred four other times: Nov/Dec 1998, Nov/Dec 1999, Oct/Nov 2001, and Oct/Nov 2002. Five months into 2026, the S&P 500 is up 10% year over year, even as the AAII in 2026 has averaged more bears than bulls. Costco trades at a 45 forward P/E, Walmart at 36, and Nvidia — the company actually building the AI future — sits at 17. Costco ($COST) forward P/E: 45. The S&P 500 Technology sector is on pace for back-to-back 10%+ monthly gains, a feat it hasn't managed since March and April 2009 coming out of the Financial Crisis lows. Massive OPEX. Dealers are sitting on negative gamma across the board, but particularly to the downside, though June OPEX removes a lot of that gamma.
Here is what it costs to borrow money right now.
30-year fixed mortgage: 6.53%, up 2 bp on the week
15-year fixed mortgage: 5.87%, up 0.34% 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 0.00% on the day