U.S. Indexes traded risk-off on Monday as escalating geopolitical tensions in the Strait of Hormuz and the UAE drove energy prices sharply higher. The move weighed on equities and bonds, while supporting the Dollar. Crude surged on reports of direct conflict between the US and Iran in the Strait, alongside Iranian strikes on the UAE, including the Fujairah energy facility. The escalation lifted inflation expectations, pressuring Treasuries and weighing on broader risk sentiment. Equities were broadly lower, with all major Indices in the red and the Dow underperforming. Sector performance was also weak, with losses across most, although Energy outperformed amid the rally in oil prices. The VIX rose, reflecting the risk-off tone. In rates, Treasuries sold off across the curve as higher oil prices lifted yields, with the move led by the front-end as inflation expectations repriced. In FX, the Dollar was firmer on safe-haven demand, although gains were choppy following remarks from Fed’s Williams, who said that rate cuts are still expected eventually and that he does not currently consider the need for rate hikes. G10 FX broadly weakened against the Dollar, with higher beta currencies underperforming. In commodities, crude benchmarks surged, while gold and silver declined despite the risk-off tone, pressured by higher yields. Last Thursday the first estimate of Q1 GDP came out, rising 2.0% (exp. 2.1%), accelerating from the 0.5% seen in Q4 2025. The contributors to the increase in real GDP in the first quarter were investment, exports, consumer spending, and government spending. ING highlighted that the government shutdown removed 1pp from headline growth in Q4, and the resumption added back 0.7pp in Q1. Imports, which are a subtraction in the calculation of GDP, also increased. Pantheon Macroeconomics highlight that “net trade subtracted 1.3pp from Q1 growth, as a 12.6% increase in real exports was more than offset by a 21.4% leap in imports, more than half of which reflected a further jump in imports of computer equipment, amid the AI boom”. Within the report, Real Consumer spending rose 1.6% in Q1, cooling from the 1.9% in Q4. Prices meanwhile rose by 4.5%, well above the 3.9% forecast and 3.7% prior, while core PCE (ex-Food and Energy) rose 4.3%, largely accelerating from the prior 2.7%. ING summarises the data by noting “Amid some cooling in consumer spending, investment linked to tech and AI has clearly become the main engine of growth in the US.” Elsewhere, Oil closed higher by 3% and Gold lower by 2%.
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For anyone following my Platinum Service it was made 542 points on the first trading session for May having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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