Finance

Energy markets saw a significant decline today as Brent crude futures dropped 3.4% to roughly $87 per barrel. The downward pressure followed reports of a potential breakthrough in negotiations between the United States and Iran, which could potentially reopen the Strait of Hormuz. Despite the dip in prices, political tensions remain elevated following recent public warnings from the Trump administration.

The Department of Labor reported that the Producer Price Index (PPI) rose 1.1% in May, its highest monthly gain since late 2022. Headline PPI has reached 6.5% on a year-over-year basis, largely driven by a significant surge in energy costs over the past several months. While core inflation figures were slightly more muted, the broad data suggests that the Federal Reserve may face continued pressure to keep interest rates steady or consider future hikes.

U.S. Treasury yields ended the week with a slight downward trend after President Trump signaled a shift away from immediate military strikes in the Middle East. The 10-year Treasury yield finished the day near 4.48%, down from highs reached earlier in the session, while the 2-year yield settled around 4.09%. This retreat in yields provided some relief to the broader market, even as traders continue to price in the possibility of at least one rate hike before the end of 2026.