Macro

Meta has signed agreements with Oklo, Vistra, and TerraPower to secure up to 6.6 GW of nuclear power by 2035 to support its growing data center electricity demand, particularly for AI infrastructure like the Prometheus supercluster. The deals, focused on the PJM region, include long-term power purchases and development funding, signaling strong tech-sector demand for clean, baseload power and potentially reshaping nuclear energy's role in supporting large-scale AI operations.

Oil prices surged in early July 2026 despite reaching four-month lows, influenced by geopolitical tensions including Iran's leader assassination and tanker attacks. OPEC+ approved an additional quota increase of 188,000 bpd, helping to stabilize shipping through the Strait of Hormuz and mitigate price hikes.

US and Israeli strikes on Iran in February 2026 escalated into a shipping crisis in the Strait of Hormuz, threatening global oil supplies. A June truce memorandum aimed to facilitate talks but was undermined by tanker attacks and renewed US military action in early July.

The closure choked off roughly 20 percent of global oil and major LNG flows, in what the IEA called the largest supply disruption in oil market history. Production losses reached 10 million barrels a day within a week and US pump prices climbed daily.

After US and Israeli strikes on Iran killed Supreme Leader Khamenei and Tehran retaliated with missile attacks on Gulf states, tanker traffic through the Strait of Hormuz — the world's most critical oil chokepoint — effectively stalled. Brent rose to $82.76, up 36% year to date, and Bank of America warned a prolonged closure could push Brent above $100 and European gas past 60 euros/MWh. Economists at Nomura, Goldman Sachs and ING said the shock forces the Fed, ECB and Asian central banks to hold or even hike as the energy spike feeds back into inflation, with Asia's big crude importers (China, India, Japan, South Korea) most exposed.

Iran retaliated against Israel and U.S. actions by striking Qatar's Ras Laffan LNG complex, causing extensive damage to key energy infrastructure. The attack, along with potential strikes on Saudi facilities, disrupted regional energy supplies, sending Brent crude above $116 and Asian spot LNG prices soaring 140%, with broad implications for global energy markets and shipping costs.

Since March 2026, ongoing conflict between Israel and Hezbollah has resulted in over 4,000 deaths and displaced more than a million people in Lebanon. Despite a US-brokered ceasefire in April and its reaffirmation in June, which reduced violence by about 35%, tensions remain high with Israel maintaining control in southern Lebanon. This standoff is exacerbating broader tensions between the United States and Iran.

U.S. electricity generation fell 0.7% year over year in January despite higher demand in the Northeast due to Winter Storm Fern, while average retail prices rose 9.5%, driven by an 86% year-over-year increase in natural gas prices. Generation shifts varied by region, with natural gas use rising in the Northeast and Mid-Atlantic but falling in the Southeast and Texas, while coal use increased in Florida, signaling divergent regional energy dynamics with implications for fuel competition and grid resilience.

Brent and WTI crude prices spiked amid a tightened U.S. blockade on Iranian ports and the UAE's announcement to exit OPEC, exacerbating supply concerns. The moves, combined with OPEC+ delays in boosting supply, threaten to keep oil prices elevated near $118/bbl, complicating market stability ahead of U.S. elections.

Gas prices have risen above $4 per gallon nationally, with diesel over $5, as renewed U.S.-Iran conflict drives crude oil above $80 per barrel and Brent above $88. Experts cite multiple factors beyond geopolitical tensions, including Ukrainian attacks on Russian refineries and seasonal demand shifts. Patrick De Haan of GasBuddy warns the national average could reach $4.50 or approach $5 in a worst case. Price declines are slow due to refining costs and distribution disruptions, following the pattern that pump prices 'rise like a rocket and fall like a feather.' Federal measures include EPA waivers for E15 and E10 fuel sales, and the Trump administration released 172 million barrels from the Strategic Petroleum Reserve, which has fallen below Biden-era lows. Some states have implemented fuel tax holidays.

PJM Interconnection CEO David Mills warns that the US's largest power grid must be redesigned to handle surging electricity demand from AI and data centers, or face power shortages and rising consumer costs. With utilities like American Electric Power at risk of leaving and data centers potentially relocating, delayed action could undermine investor confidence and regional competitiveness. PJM must balance higher power prices needed for new investment against protecting consumers, a challenge threatening grid reliability and market stability.

Oil prices fell sharply after the U.S. and Iran reached a memorandum of understanding to reopen the Strait of Hormuz and end active hostilities, with a 60-day ceasefire for nuclear talks. The deal, announced by President Trump and ratified on June 17, removed the U.S. naval blockade of Iranian ports, allowing Iran to resume oil exports—potentially adding 500,000 to 800,000 barrels per day within months. Brent and WTI crude dropped over 1% and nearly 5%, respectively, with WTI falling below $80 per barrel, its lowest since March. The S&P 500 rose 1.7%, while airlines and cruise lines gained 1% to 5% on lower fuel costs, and the Nasdaq surged 3%. However, the agreement faces risks: a dispute over releasing $24 billion in frozen Iranian assets, Israel's non-participation, and potential OPEC+ supply waves if Saudi Arabia defends market share. The broader conflict remains unresolved, with the Strait of Hormuz not officially reopening until a formal signing.

U.S. annual inflation hit 4.2% in May 2026, the highest since April 2023, driven by a 23.5% surge in energy prices amid the ongoing Iran conflict that began in late February. The war has closed the Strait of Hormuz, disrupting global oil transit and pushing gasoline prices up over 30%. Markets now see a higher chance the Federal Reserve will hold or raise interest rates, and that crude oil may reach a new all-time high. The next key data point is the June CPI report, due July 14, 2026.

The Federal Reserve's interest rate path for the second half of 2026 is highly uncertain, with no cuts expected and potential hikes on the table. After six rate cuts in 2024-2025 brought the benchmark to 3.50%-3.75%, new Chairman Kevin Warsh has kept rates steady through four FOMC meetings since May, ending forward guidance. The outbreak of the Iran war in late February drove U.S. inflation to 4.2% year-over-year in May, the highest in three years, dashing hopes for further cuts. A fragile 60-day ceasefire with Iran may not reduce inflation near the Fed's 2% target. If peace talks fail, the Strait of Hormuz closure could keep inflation high, forcing rate hikes that would hurt stocks and bonds.

The United States plans to build up to 250 new nuclear reactors over coming decades to meet surging electricity demand from AI, data centers, and manufacturing. The push revives nuclear power as a low-carbon alternative, focusing on advanced reactors and small modular reactors with passive safety systems. Federal programs like the DOE's Launch Pad support development, with companies such as TerraPower, Kairos Power, and X-energy building demonstration reactors backed by the Advanced Reactor Demonstration Program. Tech giants Google and Meta have signed power purchase agreements. Critics cite unresolved safety, cost, and waste challenges, while experts stress the need for extensive testing and regulatory review of new designs.

The Federal Reserve held interest rates steady at 3.50%-3.75% at its June 17 FOMC meeting, the first under new Chair Kevin Warsh, who took over from Jerome Powell last month after Trump's administration dropped a pretextual criminal investigation into Powell in exchange for his confirmation. The decision was unanimous, but the hawkish tone of updated economic projections and Warsh’s first press conference triggered a sharp market sell-off. The Dow fell more than 500 points (1%), the S&P 500 dropped 1.2%, and the Nasdaq-100 lost 1.4%, as investors realized rate hikes remain on the table for 2026. Nine of 19 FOMC participants now project at least one quarter-point hike by year-end, a dramatic shift from earlier discussions of cuts; Warsh himself declined to submit a rate projection, reinforcing his break from forward guidance. The median fed funds rate projection for end-2026 rose to 3.8% from 3.4%, with most officials seeing rates between 3.6% and 4.1% by year-end, up from the prior 3.25%-3.75% range. However, 2027 and 2028 projections suggested some of that tightening could later be reversed, indicating the Committee acknowledged a near-term inflation challenge but not necessarily a sustained hiking cycle. Markets now price in one 25-basis-point hike by October 2026, with no further movement through 2027. The decision came despite pressure from President Donald Trump, who wants lower rates to juice the economy but whose policies—including the war with Iran—have contributed to elevated inflation. New Chair Kevin Warsh signaled a hawkish shift. The policy statement was dramatically shortened to 130 words, removing much of the forward guidance markets had become accustomed to; Warsh indicated the Committee concluded such guidance may no longer be helpful, urging markets to rely more on incoming data. The statement described the economy as solid, acknowledged uncertainty, and emphasized the commitment to restoring price stability. Updated projections showed inflation expectations rising sharply to 3.6% by year-end (up from 2.7% in March) and core inflation at 3.3%, while GDP growth was lowered to 2.2% and unemployment to 4.3%. The long-run rate was set at 3.1%. Consumer prices overall were up 4.2% in May from a year ago, the biggest annual increase since April 2023, while core inflation was a more modest 2.9% in May. The U.S. war with Iran has snarled tanker traffic in the Strait of Hormuz, triggering a sharp jump in gasoline prices, though a U.S.-Iran deal to reopen the strait is set to be signed Friday; AAA says the average price of regular gas in the U.S. is still more than a dollar a gallon higher than before the war. After anemic hiring in 2025, U.S. employers have added an average of 188,000 jobs in each of the last three months, though June saw only 57,000 new jobs, down from 172,000 in May and 115,000 in April, while the unemployment rate dipped to 4.2% from 4.3%. The Fed maintained its 'ample reserves' policy and $6.7 trillion balance sheet, with no immediate plans to reduce bond holdings. Trump, who had tried to browbeat Powell into lowering rates and launched a pretextual criminal investigation into him, was initially dismissive of the decision but sounded piqued when a reporter noted rates might go higher, saying 'It just keeps a country down.' He added that 'we have a very good guy over there now,' referring to Warsh, though observers noted the parallel to his treatment of Powell. Warsh committed to restoring price stability, calling high prices a burden, and announced task forces to review communications and inflation data. In an unusual move, Powell has elected to remain on the Fed's governing board, promising to keep a low profile and serve as a firewall against White House pressure. The Fed's next meeting is scheduled for July 28-29, with the next dot plot released on September 16. The hawkish shift was underscored by a significant market reaction: the S&P 500 closed 1.2% lower, the NASDAQ fell 1.3%, and the Dow dropped 1% (507 points). Consumer stocks tumbled, reflecting a decline in real wages for the average worker, as a year and a half of wage increases have been wiped out by inflation driven by energy prices. The bond market saw a selloff, with the two-year Treasury yield jumping 0.17 percentage points to 4.22%, its highest since February 2025, and the 10-year yield rising above 4.5%, a key determinant for corporate borrowing and mortgages. The decision was unanimous for the first time in a year, though Warsh described the two days of discussions as a 'good family fight.' He announced five task forces to review Fed communications, balance sheet policy, data sources, productivity, and the inflation framework, with a long-standing aim to reduce the balance sheet to pre-2008 levels—a move opposed by Fed governor Christopher Waller, who called it 'inefficient' and 'stupid.' Warsh also indicated press conferences after every meeting may be scrapped and wants to move away from agencies like the Bureau of Labor Statistics, which he said provide 'echoes of history' rather than real-time data. In a significant departure from his predecessors, Warsh stated that 'financial market prices are probably the most important source of information to guide central bankers.' The inflation set off by the war on Iran has changed interest-rate settings globally, with the Bank of Japan lifting its rate and the European Central Bank raising by 0.25 percentage points. At the G7 meeting in France, Trump said he extended the ceasefire with Iran partly to avoid an economic catastrophe, not wanting to be compared to Herbert Hoover. The Fed's statement did not specifically mention the war, citing only 'supply shocks' in energy. Trump was relatively muted, saying he was prepared to be 'guided' by Warsh on monetary policy, but added that a rate hike 'just keeps the country down.' Warsh announced five task forces to review Fed communications, balance sheet policy, data sources, productivity, and the inflation framework, with a long-standing aim to reduce the balance sheet to pre-2008 levels—a move opposed by Fed governor Christopher Waller, who called it 'inefficient' and 'stupid.' Warsh also indicated press conferences after every meeting may be scrapped and wants to move away from agencies like the BLS, which he said provide 'echoes of history' rather than real-time data. The Fed's next meeting is scheduled for July 28-29, with the next dot plot released on September 16.

A ceasefire between the U.S. and Iran in late June briefly allowed the International Maritime Organization to begin evacuating trapped ships and over 11,000 seafarers from the Strait of Hormuz, which Iran had effectively closed since late February after U.S. and Israeli attacks. The operation routed vessels along Oman's southern coastline, but halted days later when the Singapore-flagged Ever Lovely was attacked; no one claimed responsibility, but Iran's Revolutionary Guard criticized the evacuation as lacking Iranian involvement. Iran continues to assert control over the strait, demanding ships coordinate and obtain clearance, setting a dangerous precedent for other global waterways like the Strait of Gibraltar or Malacca. The strait normally carries about 20 million barrels of oil daily—20% of global consumption—and its closure has driven oil prices up, with Brent crude at $76 and WTI above $71, threatening inflation, corporate profits, and consumer spending. International maritime law, including the U.N. Convention on the Law of the Sea, offers little recourse as neither Iran nor the U.S. have ratified it, and President Trump's suggestion that the U.S. could control the strait and collect tolls further undermined confidence in the independence of international waterways.

The ongoing Iran war is severely disrupting global oil markets, driving increased volatility and raising alarms over potential energy supply shortages. A primary concern is the closure of the Strait of Hormuz, a critical chokepoint for a significant portion of the world's crude exports. Industry professionals, analysts, and governments are closely monitoring the conflict's effects on crude prices, production, and international trade flows, including LNG shipments. The situation, last updated July 31, 2026, continues to threaten the broader energy market outlook.

Oil prices surged above $90 a barrel, climbing nearly 8% on Wednesday, after President Donald Trump vowed retaliation for an Iranian missile attack on U.S. forces. The Dow Jones Industrial Average dropped 1,153 points, its worst day since April 2025, as the Federal Reserve held interest rates steady and committed to fighting elevated inflation. The average U.S. gas price hit $4.09, up 37% since the war began in late February. The Strait of Hormuz shipping traffic declined sharply, disrupting about one-fifth of global oil supply. A brief calm following a preliminary peace deal had been shattered by renewed large-scale fighting between the U.S. and Iran.

Asian markets plunged as the US-Iran War escalated and Trump announced new tariffs, compounding global economic uncertainty. Japan's Nikkei, South Korea's Kospi, China's Shanghai Composite, and Hong Kong's Hang Seng all fell sharply, while US indices like the Dow Jones, Nasdaq, and S&P 500 also closed lower. Rising crude oil prices heightened concerns for India, threatening higher inflation and slower economic growth. The geopolitical tensions and trade policy shifts are pressuring investor sentiment, with certain sectors facing potential headwinds or benefits if the conflict persists.

Oil prices surged nearly 4% to $94.23 per barrel for Brent crude after an eleventh consecutive night of U.S. Central Command strikes against Iran, with the Strait of Hormuz and Bab el-Mandeb blockades driving a $10 per barrel increase this week and expectations of $100 oil rising. War-risk insurance premiums for tankers transiting Hormuz have skyrocketed from 0.25% to 5% of vessel value—a nearly 1,900% increase—reflecting insurers' assessment of severe physical risks, as Secretary of State Marco Rubio told ASEAN foreign ministers that Washington and Tehran remain divided over the strait. The disruption at Hormuz has sharply cut tanker transits, threatening one-fifth of global seaborne oil and gas supplies, while Houthi missile attacks on two Saudi tankers in the Red Sea escalated threats to Saudi crude exports. OPEC+ is set to raise September output by 188,000 b/d on August 2, aiming to unwind 1.65 million b/d of voluntary cuts despite the conflict. Other developments include copper prices hitting a one-month high of $13,835 per tonne, a US-Saudi nuclear cooperation pact, and QatarEnergy extending LNG force majeure as the Hormuz closure persists.

BP and Shell both posted massive profit surges in the latest quarter, driven by the Iran-war-fueled spike in oil and gas prices. BP's profit more than doubled to $5.73 billion, beating estimates, as new CEO Meg O'Neill pushes an aggressive turnaround plan, admitting the company has 'not delivered consistently' and has 'written off too much value.' Shell posted its best quarter since 2022 with adjusted earnings of $9.84 billion, marking its 19th straight quarter of at least $3 billion in buybacks. While both benefited from the same price surge, BP is restructuring and selling assets to reduce its roughly $40 billion in liabilities, whereas Shell maintains a steady course, with CEO Wael Sawan emphasizing the company is built to 'thrive through volatility.'

Tensions in the Middle East escalated as Iran threatened Strait of Hormuz closure, while the U.S. imposed sanctions on Iran's Persian Gulf Strait Authority (PGSA), stripping its website of encryption and exposing shippers' data. A sanctioned Russian tanker, the Caroline Bezengi, carrying 800,000 barrels of oil, spilled over 1,240 square miles off Oman after running aground June 30, creating a 'nightmare scenario' for salvage. Meanwhile, Israel's U.N. envoy cited new data showing child malnutrition in Gaza dropped to pre-war levels, refuting starvation claims. Separately, War Secretary Pete Hegseth stayed with President Trump during a secret plane swap in Turkey over an Iranian assassination plot, while Secretary Rubio remained on a decoy Air Force One.

Tensions between the US and Iran escalated sharply with the first reported fatalities in the Red Sea and a US military strike in the Gulf of Oman. Yemeni officials accused Iran-backed Houthis of killing four crew members and two rescue workers in a 'double-tap' missile strike on the cargo ship Tihamah in the Bab al-Mandeb Strait, marking a serious escalation. Separately, US Central Command said a Navy helicopter fired Hellfire missiles to disable the Panama-flagged M/V Vela Nova in the Gulf of Oman for attempting to violate the US blockade against Iran, redirecting it from an Iranian port. The US blockade, reimposed in July, has redirected 55 vessels. Meanwhile, the Strait of Hormuz remains severely constrained, with only eight vessels crossing on Monday versus a pre-war average of 120, contradicting President Trump's claim it is 'open.' The Energy Information Administration raised its 2026 Brent crude forecast to $87 a barrel and expects transit constraints to persist through August.

Chinese President Xi Jinping warned in April that the international order is 'crumbling into disarray,' criticizing a U.S. naval blockade of the Strait of Hormuz as 'dangerous and irresponsible' for threatening a key oil route. His comments came amid ongoing Iran conflict impacts on global markets, despite a fragile ceasefire. Xi's warning also addressed rising U.S. tariffs and protectionism, adding uncertainty to the world economy. Oil prices have fluctuated wildly, from nearly $113 to $68 per barrel. While China's exports grew 27% in July, driven by AI demand and U.S. holiday purchasing, its Q2 GDP saw the slowest growth in three years, raising concerns about dependency on global demand. Xi's remarks signal potential fragmentation of market systems as U.S.-China tensions persist over trade, tariffs, and security.

Indian stock markets crashed on Monday, with the Sensex tumbling 2,345 points and the Nifty 50 plunging 704 points below 24,000, as escalating US-Iran war fears drove crude oil to a 52-week high above $110 a barrel. The Indian rupee hit a record low of 92.3350 against the dollar, falling 0.6%, amid a broader sell-off across Asian currencies. The conflict, now in its second week following US-Israeli air strikes on Iran, has severely restricted shipping through the Strait of Hormuz. Over the weekend, Iranian drone strikes hit Saudi Arabia, Kuwait, and the UAE, heightening supply concerns. Global markets also slumped, with Dow futures sliding nearly 1,000 points and Asian indices dropping up to 8%.