Finance

Financial markets found relief as signs emerged of a potential peace agreement between the United States and Iran, which could restore global oil flows through the Strait of Hormuz. Consequently, Brent crude oil prices dropped more than 3% in recent sessions, mitigating some of the immediate concerns regarding energy-driven inflation.

Recent government data revealed that the U.S. annual inflation rate accelerated to 4.2% in May 2026, driven primarily by a significant spike in energy and gasoline costs. This upward pressure on consumer prices has reinforced expectations that the Federal Reserve may maintain a hawkish stance, with a high probability of zero rate cuts for the remainder of the year.

U.S. Treasury yields retreated from recent peaks late this week, with the benchmark 10-year note settling near 4.48%. While yields cooled slightly in response to falling oil prices, they remain elevated compared to 2025 levels, continuing to serve as a critical sensitivity for equity valuations and broader fixed-income performance.