Stock futures are relatively muted this morning following yesterday’s intense rally led by the Nasdaq. While stocks are taking a breather, that hasn’t stopped SpaceX from advancing another 5% ahead of the open after jumping 19% in each of its first two days of trading. The latest gains have pushed SpaceX’s market capitalization to +$2.5 trillion, placing it sixth among U.S. companies and within striking distance of Amazon’s ~$2.6 trillion valuation. If yesterday was dominated by Wall Street’s reaction to the Iran deal, today may be more about how world leaders react to one another at the G7 summit in Évian-les-Bains, France. The gathering is expected to focus on Iran, defence spending, trade, though much of the attention will likely centre on Trump’s relationships with fellow leaders. Trump has frequently criticized allies for what he views as insufficient defence spending and unfair trade practices, and last year’s summit ended abruptly when he departed last year’s summit in Canada early amid Middle East tensions. More recently, German Chancellor Friedrich Merz drew Trump’s ire after criticizing U.S. policy toward Iran, while Italian Prime Minister Giorgia Meloni saw a previously warm relationship cool after criticizing Trump for his attacks on Pope Leo XIV. A preliminary U.S.-Iran agreement to extend the ceasefire and reopen the Strait of Hormuz has reduced near-term escalation risks, but uncertainties remain. For G7 leaders, success this week may be measured less by policy breakthroughs and more by avoiding a public clash with Washington.
Stocks rallied yesterday following news of the U.S.-Iran getting closer to a deal to reopen the Strait of Hormuz. While details remain a bit hazy, investors see the news as a sign of reduced geopolitical uncertainty, pushing oil prices lower and easing concerns about inflation and additional interest rate hikes. The S&P 500 gained 1.7%, the Nasdaq 100 jumped 3.1%, while the Dow and TSX both reached new record highs. Falling oil prices led investors to scale back expectations for further Fed tightening, although the Fed is still widely expected to leave rates unchanged at this week’s meeting. Market optimism was further supported by strong momentum in tech and AI-related stocks, with SpaceX extending gains after its blockbuster IPO and Nvidia attracting huge demand for a $25 billion bond offering.
Just how hazy is this peace deal? Polymarket traders are locked in a dispute over whether the recently announced U.S.-Iran peace agreement qualifies for a payout on prediction markets that have generated more than $345 million in trading volume. While both countries announced a deal and plans to reopen the Strait of Hormuz, some traders argue the contract terms require a clearly stated and permanent end to military hostilities, which they believe has not yet been achieved because no formal agreement has been signed and the current arrangement is only temporary. Others point to statements describing a permanent termination of military operations as sufficient evidence. The debate highlights a recurring challenge for prediction markets which has translated complex real-world events into simple yes-or-no outcomes. The final decision now rests with holders of the UMA cryptocurrency, which is used to handle market challenges on Polymarket, who will vote on the outcome later this week.
G7 leaders are meeting in France today with a packed agenda focused on ending the wars in Ukraine and the Middle East. Ukrainian President Volodymyr Zelenskyy is meeting with the leaders this morning to discuss continued support for Ukraine following a major Russian missile and drone attack, while Trump says he plans to refocus on the Russia-Ukraine conflict after announcing a peace agreement with Iran. French President Emmanuel Macron has urged Trump to maintain pressure on Russia and support Ukraine, while European leaders try and coordinate future peace talks. The summit is also addressing Middle East stability, with leaders from Egypt, Qatar, and the UAE joining discussions following the U.S.-Iran deal to reopen the Strait of Hormuz. Despite recent tensions between Trump and European allies over the Iran conflict, leaders has welcomed the recent breakthrough and offered support to get the deal across the finish line.
Business development companies (BDC), which are popular with income investors for their high dividend yields, are showing signs that their payouts may be less secure than headline earnings suggest. A recent analysis found that median dividend coverage among 46 U.S.-listed BDCs fell below 1.0x in the first quarter of 2026, meaning earnings no longer fully covered dividends. The situation looks weaker when excluding payment-in-kind interest, which allows borrowers to defer cash interest payments while lenders still record the income. Lower interest rates, tighter lending spreads, and concerns about credit quality among some borrowers are putting pressure on earnings, leading several BDCs, including Blue Owl Capital, Oaktree Specialty Lending, and KKR, to reduce dividends. While many firms can temporarily support payouts using accumulated income or fee waivers, continued earnings pressure could force additional dividend cuts if conditions don’t improve.
U.S. vs Canada, no this isn’t a FIFA paragraph. The U.S. dollar has strengthened against the Canadian dollar, reaching 1.4024, helped by higher U.S. interest rates and a weaker Canadian economy that has contracted for two consecutive quarters. Technical indicators suggest the uptrend remains intact, with USD/CAD trading above its 10-day moving average, but momentum appears stretched as the RSI remains overbought and the pair failed to hold above the key 1.4000 level. While a move above 1.4024 could lead to further gains toward 1.4140, the rally is showing signs of slowing, with experts noting that a drop below 1.3892 could signal a shift in favour of the Canadian dollar.
And the rich get richer. The world’s 500 richest people added a record $336 billion to their combined wealth yesterday, pushing their total net worth to an all-time high of $13.3 trillion. The rise was fueled by strong global markets, optimism surrounding the U.S.-Iran agreement to reopen the Strait of Hormuz, and the rally in SpaceX following its debut. Elon Musk led the gains, with his fortune jumping more than 10% to $1.27 trillion after SpaceX shares shot up (pun intended) 20%, adding roughly $164 billion to his wealth in a single day. The rally also highlighted the concentration of wealth among the ultra-rich, with the top 50 individuals now controlling $6.5 trillion, nearly as much as the $6.8 trillion held by the remaining 450 members of the Bloomberg Billionaires Index.
Diversion: What the?!
