Following yesterday’s rally, equities are pointing lower as rising oil prices and Treasury yields reintroduce fears that geopolitical tensions could keep inflation elevated for longer, offsetting strong corporate earnings momentum. The jump in crude follows reports that Iran intends to retain enriched uranium inside the country, raising concerns that negotiations may stall and that energy markets could remain tight. Higher yields are becoming especially problematic for equities because they raise discount rates just as valuations (especially across AI and semiconductor stocks) are already stretched after a massive rally. On the earnings front, while Nvidia once again delivered strong earnings and guidance, investors appear to be questioning whether AI growth can continue supporting current multiples amid tightening financial conditions and elevated macro uncertainty.
One-and-wait. The ECB appears trapped between preserving inflation credibility and protecting an already fragile eurozone economy, making a June rate hike highly likely, even as policymakers remain hesitant to commit to a sustained tightening cycle. Persistent energy inflation tied to the Iran war has pushed headline inflation above target, leaving the central bank concerned that failing to act after strongly signaling a hike could damage institutional credibility. At the same time, policymakers recognize that growth conditions are much weaker than during prior inflation shocks, with high energy costs, soft labour markets, and deteriorating industrial activity creating growing stagflation risks across Europe.
The decline in U.S. dollar volatility (despite rising geopolitical and inflation risks) is creating an environment where foreign-exchange investors are shifting away from big directional macro bets and toward relative-value and carry strategies designed to produce yield differentials. With the dollar mostly stable even as oil prices rise and global bond markets sell off, traders are focusing on currencies where central-bank policy divergence, commodity exposure, and valuation gaps can generate incremental returns with lower volatility risk. This has benefited higher-yielding emerging-market currencies such as the South African rand, Brazilian real, and Mexican peso, while low-volatility funding currencies like the yen and Swiss franc continue to support carry trades.
While we’re on the subject of F/X, the recent decline in the Indian rupee to record lows shows how vulnerable major energy-importing emerging markets remain to prolonged geopolitical shocks and rising global yields. With crude oil prices hovering near $110 per barrel due to stalled U.S.-Iran negotiations, India faces growing pressure through a worsening trade balance, imported inflation, and capital outflows as investors demand higher returns globally. The rupee’s more than 6% decline since the Iran conflict began reflects both external stress and growing market concerns that higher oil costs could weaken India’s macroeconomic stability if sustained. At the same time, the need for ongoing intervention by the Reserve Bank of India highlights how central banks across emerging markets are being forced into defensive positions as higher U.S. yields tighten global financial conditions.
SpaceX’s recent IPO filing proves that there really is no limits to Elon Musk’s ambitions. The company is asking investors to underwrite not just a dominant space business, but a long-term goal centered on AI infrastructure, orbital networks, and eventually Mars colonization. While the company generated an impressive $18.7 billion in 2025 revenue and continues benefiting from the success of Starlink, the filing also exposed massive capital intensity, nearly $29 billion in debt, and growing operating losses tied to AI expansion and the acquisition of xAI. The most surprising shift is that SpaceX now appears to be positioning itself less as a traditional aerospace company and more as a vertically integrated AI and infrastructure platform, with management claiming the addressable market totals $28.5 trillion. And if that wasn’t enough, the IPO has implications beyond SpaceX itself as it could reshape capital flows across technology markets, pressure Tesla’s valuation premium by creating a potentially more attractive Musk-linked investment vehicle, and reinforce the dominance of AI- and infrastructure-driven mega-cap growth themes in U.S. equities. With a successful IPO, Elon Musk would become the world’s first trillionaire.
One battle after another. Fresh off their court victory over Musk, OpenAI is to confidentially file for IPO as soon as this Friday, marking another major escalation in the AI capital markets boom. Experts have noted that the IPO could become one of the largest and most closely watched public offerings in history. With private valuations already exceeding $850 billion and annual cash burn still extremely high, investors will be focused less on headline growth and more on whether OpenAI can demonstrate a credible path toward profitability amid rising infrastructure costs and growing competition from rivals like Anthropic and xAI. The timing is also notable given that it coincides with Elon Musk’s SpaceX IPO preparations, setting up what looks like a battle for dominance in the tech space.
Cup time in Montreal. The Montreal Victoire took home their first Walter Cup after defeating the Ottawa Charge 4-0 in Game 4 to win the series 3-1. Abby Roque scored twice while Ann-Renée Desbiens stopped all 23 shots she faced. The win is another milestone for the young Professional Women’s Hockey League (PWHL), which launched in 2024, and adds to an already strong stretch for hockey in Montreal with the Montreal Canadiens continuing their playoff run tonight against the Canes tonight. Montreal Victoire captain Marie-Philip Poulin was named playoff MVP after posting eight points during the postseason. After the win, she reflected on how much professional women’s hockey has stabilized and evolved since the collapse of the CWHL, noting that only a few years ago many players were uncertain whether a sustainable professional league would even exist.
Diversion: Not quite
