WS #14728

Global markets are navigating a convergence of geopolitical escalation and macroeconomic strain. The US-China summit has produced a diplomatic thaw, with President Trump and President Xi agreeing to cooperation amid 'healthy competition,' yet this political signal is heavily discounted by persistent physical supply chain disruptions. Oil prices have surged past $108/barrel as Iran's Hormuz talks stall and Saudi Arabia attempts to ease the Asia crunch with emergency sales, while Ukrainian drone strikes on Russian oil infrastructure add a secondary supply risk. The narrative arc for Middle East tensions remains firmly in escalation, dampening the bullish potential of the diplomatic breakthrough. Simultaneously, the macro environment is tightening. The US 10-Year Treasury yield hit a fresh multi-decade high of 5.1685%, reflecting persistent inflation fears and robust demand for safe-haven assets. This rate pressure is creating a divergence in the equity market: while AI infrastructure demand remains robust—evidenced by Nebius's 20% price hike and Synnex's blowout results—valuation concerns are mounting, particularly in semiconductors where Micron's low P/E is flagged as potentially misleading. Crypto markets are under pressure, with Bitcoin dipping below $84K and treasury models losing their edge as DATs trade below crypto holdings.