Trump vows to end war soon; markets react as inflation fears rise.

US Treasury Yields Surge Amid Inflation Concerns

On Tuesday, the US Treasury market experienced a significant sell-off, with the yield on the 30-year Treasury bond surpassing 5.19%, reaching its highest level since before the global financial crisis in 2007. According to Bloomberg, a series of large sell orders in the Treasury futures market intensified this "surrender-style" sell-off. Traders noted that ongoing disruptions in shipping through the Strait of Hormuz have continued to elevate inflation expectations, leading to increased bets on global central bank interest rate hikes.

Fed Rate Hike Expectations Rise

Market predictions indicate that traders believe the Federal Reserve is likely to raise interest rates before July 2027. Goldman Sachs has warned that the prevailing market narrative is shifting from AI to interest rates, suggesting that tech growth assets, which previously benefited from low rates, may face repricing pressures. Additionally, mortgage rates in the US have reached their highest levels since July of last year, further straining the housing market.

Senate Signals Opposition to War

The Republican-led US Senate showed increasing opposition to continuing the war in Iran during a procedural vote on Tuesday, reflecting growing political unrest over the economic burdens of overseas conflicts. The vote, which passed 50 to 47, serves as a clear warning as Trump considers new military actions against Iran. As of the latest updates, President Trump expressed hopes for a swift resolution to the conflict.

SpaceX Chooses Goldman Sachs for IPO

Reports from Bloomberg and CNBC indicate that SpaceX has selected Goldman Sachs as the lead underwriter for its upcoming IPO, which is expected to set records in the US capital markets. The company’s valuation in private markets has already surpassed that of many public companies, marking a significant step towards entering the public capital market.

Semiconductor Sector Experiences Volatility

The Philadelphia Semiconductor Index saw a near 10% drop recently, prompting buying interest. Historical data suggests that after similar declines, the index typically rebounds strongly in the short term. However, high US Treasury yields continue to suppress stock valuations, impacting the overall market stability.

Nvidia Earnings Report Anticipated

Nvidia is set to release its Q1 earnings report after the market closes on Wednesday, with expectations of significant price volatility. Analysts predict that Nvidia will once again exceed earnings expectations and raise guidance, making this report one of the most anticipated of the earnings season.

Google Launches New AI Models

Google has announced the launch of its Gemini 3.5 Flash model, touted as its fastest and most efficient model to date. This model can handle various input forms and is now available for free to users globally. Additionally, Google is enhancing its search experience with the introduction of Gemini Spark, which will assist users in managing complex queries and tracking topics of interest.

Samsung and Union Negotiations Continue

Samsung Electronics and its union are set to resume negotiations after a lengthy 15-hour discussion failed to reach an agreement. The union plans to initiate an 18-day strike if negotiations do not yield results.

Target Appoints New Supply Chain Chief

Target has appointed former Walmart executive Jeff England as its Chief Supply Chain and Logistics Officer, effective May 31. England's extensive experience is expected to enhance Target's supply chain efficiency and improve product delivery accuracy.

Conclusion

As inflation concerns rise and interest rates fluctuate, the financial landscape remains volatile, impacting various sectors from technology to real estate. The upcoming earnings reports and strategic moves by major companies will be crucial in shaping market sentiment.