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US conducts new "defensive" strikes on Iranian military site near Bandar Abbas · Hormuz blockade persists at ~5% normal shipping volumes
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US equity markets are grinding near all-time highs. The S&P 500 at 7,520 sits within 0.25% of its year-high of 7,539, though breadth remains thin — the equal-weight RSP is marginally in the red as mega-cap names carry the index. The VIX's sharp 4.2% decline to 16.29 signals market complacency relative to the ongoing geopolitical backdrop, sitting well below its 50-day moving average of 20.44.
GBP is softer across the board at 1.3405 against the dollar, retreating from a day high of 1.3430 and remaining below its 50-day moving average of 1.3458. Dollar strength is broad-based, with USD/CHF pushing +0.20%. GBP/EUR has slipped to 1.1541 (derived).
Brent crude at $94.54 remains underpinned by the Hormuz blockade (now in its third month), though intraday price action is muted. Gold is selling off sharply — down $29.70 to $4,418.70 — likely on Iran deal optimism reducing the safe-haven bid combined with a firmer dollar. Gold remains far below its year high of $5,626.80. The GBP 5yr IRS has fallen 0.098pp to 4.382%, consistent with a broad gilts rally as BoE rate expectations remain dovish.
US forces conducted new "defensive" strikes on an Iranian military site near Bandar Abbas, with Iranian media reporting no damage or casualties. The Strait has been effectively closed since 28 February 2026 when the US and Israel launched air operations and assassinated Supreme Leader Khamenei, with shipping volumes now at ~5% of pre-conflict levels. Trump said on 23 May that a deal was "largely negotiated" and would be announced "soon", but CNN reported 27 May that he will "not rush" the deal — contradictory signals. Brent's muted reaction (+0.27%) suggests the Hormuz premium is already substantially priced in.
Trump is averaging 19 posts per day in 2026, with Iran the second most common topic (247 posts). A notable recent post calls for CFTC authority over prediction markets. His April 29 overnight warning to Iran was tied directly to oil price moves. No material market-moving posts confirmed for 28 May at time of writing.
The ECB held at 2.15% (deposit: 2.00%) in April, forecasting 2026 headline CPI at 2.6% due to Middle East energy pressures. The Fed and BoE also held in April. Fed Chair Powell's term expired May 2026; the identity and policy stance of a potential successor adds uncertainty heading into the 17 June FOMC. Futures markets are pricing approximately 60% probability of a cut to 3.50–3.75% at that meeting.
S&P 500 Q1 blended earnings growth of +28.4% — strongest in ~5 years. 84% beat EPS estimates. Goldman Sachs raised its 2026 year-end S&P target from 7,600 to 8,000, citing AI-driven earnings momentum and full-year EPS growth forecast of +24%. 69 companies report today.
Gold's $29.70 decline to $4,418.70 is notable given active US military strikes this morning. The market is fading the safe-haven on Iran deal optimism and USD strength rather than responding to escalation risk. The PCE print at 13:30 GMT is the next potential catalyst.
ZS (Zscaler) cratered 31% on earnings, while QCOM fell 9.3%, INTC 4.6%, and AMD 2.9% — a broad semi selloff in the prior session sits oddly against an otherwise constructive index tape, reinforcing the narrow breadth concern. NVDA is down 2.2% (most active by volume at 49M shares).
The April PCE deflator (13:30 GMT) is the Fed's preferred inflation gauge and comes ahead of a pivotal 17 June FOMC where a cut is ~60% priced. GDP Q1 2nd release is also due at the same time. Any upside PCE surprise could push back Fed cut expectations and weigh on rates-sensitive assets.
— companies due to report today
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