Oil prices are moving higher and stock futures are edging lower as U.S.–Iran talks remain fragile. Over the weekend, a planned trip by U.S. envoys to Pakistan was scrapped amid reports the two sides remain far apart, with Iran pushing back on key U.S. demands and resisting what it views as deadlines or ultimatums. While there had been expectations of a potential meeting with Iranian Foreign Minister Abbas Araghchi, no talks materialized. Sticking points remain unresolved, including the status of the Strait of Hormuz, the U.S. naval presence in the region, and Iran’s nuclear program, leaving diplomacy tentative and markets sensitive to further escalation.
Global equity markets remain near record highs, but investor confidence may be starting to show cracks. The S&P 500 has rallied roughly 10% since late March, supported by strong earnings and resilient economic data, but ongoing tensions tied to the U.S. administration’s Iran policy continue to keep oil prices elevated and bond yields high. Those higher yields are tightening financial conditions and raising borrowing costs, even as markets push higher. At the same time, there are early signs of fatigue in crowded trades like energy and semiconductors, with fund outflows and increased hedging activity suggesting investors are becoming more cautious. With major tech earnings this week, expectations are high, meaning markets may need strong results to sustain the rally.
Holding pattern. We are entering a pivotal week of global central bank meetings, which is putting pressure on bond markets, as investors brace for signals that policymakers may stay hawkish amid inflation risks tied to the Iran war. The Fed, ECB, BoC, BOE, and BOJ are all expected to hold rates steady, but markets are focused on whether officials like Jerome Powell, Tiff Macklem, and Christine Lagarde strike a more cautious tone, which could push bond yields higher and weigh on government debt, which has lagged amid a broader equity rally. At the same time, a separate development in the U.S. has shifted the policy backdrop with the U.S. Justice Department dropping its investigation into Jerome Powell over Fed renovation costs, removing a major obstacle to the confirmation of Kevin Warsh as the next head of the Fed. The probe had already been criticized by a federal judge for lacking evidence and appearing politically motivated. Its closure is expected to clear the path for Warsh’s confirmation, which had been stalled by the investigation. While the Justice Department has handed oversight of the issue to the Fed’s internal watchdog, the move shifts the leadership outlook for the central bank, with potential implications for the future direction of monetary policy.
The show must go on. Despite the security incident in Washington over the weekend, King Charles is still planning his visit to Washington. It’s a strained moment for U.S.–U.K. relations, which are described as being at their weakest since the Suez Crisis. The trip, intended to commemorate the 250th anniversary of American independence, has taken on added political sensitivity due to tensions between Trump and U.K. Prime Minister Keir Starmer, over disagreements related to the Iran conflict and broader foreign policy issues. While the king is expected to remain politically neutral, the visit is seen as an attempt to stabilize the relationship and reset personal dynamics between leaders. Despite the diplomatic friction, both sides recognize the importance of the partnership, especially given deep economic and security ties, although the visit is more likely to ease tensions temporarily rather than resolve underlying disagreements.
While the king’s trip is still on, other travel plans have been cancelled. Trump cancelled a planned diplomatic trip to Pakistan aimed at advancing Iran peace talks, casting fresh doubt on the already fragile ceasefire. The decision reflects growing uncertainty around negotiations, with Trump citing internal chaos within Iran’s leadership and expressing skepticism about progress. At the same time, tensions in the region appear to be re-escalating, as a separate ceasefire between Israel and Hezbollah shows signs of breaking down. The situation leaves the path forward for diplomacy unclear, even as both sides continue to exchange proposals.
Mark Carney announced this morning that Canada will launch its first sovereign wealth fund, called the Canada Strong Fund, to finance large-scale infrastructure projects and attract global investment. The fund is designed to support major initiatives such as ports, pipelines, and export infrastructure, while also allowing individual Canadians to contribute capital. The move is part of a broader strategy to boost economic growth, improve national resilience, and reduce reliance on external partners by strengthening domestic investment capacity. It also aligns with the government’s goal of attracting up to $500 billion in private investment over the next five years, positioning Canada as a more competitive destination for global capital.
I can’t even sprint this fast. In the marathon world, breaking the 2-hour mark was thought of as impossible, until this weekend. Two distance runners from Africa both took down the milestone mark with Sabastian Sawe of Kenya winning the London Marathon in 1 hour, 59 minutes and 30 seconds, beating Ethiopia’s Yomif Kejelcha, who was running his first marathon and finished in 1:59.41. It was ideal conditions on a relatively flat course and Sawe ran the second half in 59:01. The women showed up too, with Ethiopia’s Tigst Assefa setting a new women’s world record of 2:15:41, defending her title and beating the record she set here last year. Kenya’s Hellen Obiri finished just 12 seconds behind, while her countrywoman Joyciline Jepkosgei finished third in 2:15:55. This is the first time three women have ever run under 2:16 at a marathon. Meanwhile, some of us are just trying to beat the crosswalk timer.
Diversion: Full circle moment
