WS #7184

The dominant narrative remains the escalating oil supply crisis and geopolitical tensions, with the Ukraine-Russia conflict intensifying. The IEA's May oil market report warns that global oil supply declined by a further 1.8 million barrels per day in April, taking total losses to 12.8 mb/d since the Iran war began, and that inventories are being depleted at a record pace. This is corroborated by reports that Russia's April oil output fell to 8.83m bpd, down 460k bpd YoY, linked to Ukrainian strikes on Russian oil infrastructure. Meanwhile, the April US PPI surged 1.4% MoM (vs 0.5% expected) and 6.0% YoY (vs 4.9% expected), the biggest increase since 2022, driven by soaring energy costs. This hot PPI print reinforces higher-for-longer inflation expectations and reduces rate-cut hopes, with the US 10-year Treasury yield hitting its highest since July. Trump has arrived in Beijing for the high-stakes summit with Xi, accompanied by Tesla CEO Elon Musk and Nvidia CEO Jensen Huang, a key macro event that could shape trade and geopolitical outcomes. In tech, Eos Energy Enterprises smashed Q1 estimates with EPS of $0.12 vs -$0.22 expected, revenue up 445% YoY, signaling strong energy storage momentum tied to AI power demand. Nebius Group (backed by Nvidia) continues to show monster AI growth. However, Wix.com shares fell after worse-than-expected Q1 results, and Dynatrace shares dropped on weak Q1 sales guidance. Copper climbed for an eighth straight day, nearing record highs above $14,000/ton, as global supply risks mount. The overall narrative arc is ESCALATING geopolitical risk and inflation pressure, with mixed tech earnings signals.