WS #7965

The dominant narrative in this window is the ESCALATING stagflation theme, with new data points and official warnings reinforcing the macro picture. US consumer sentiment hit an all-time low in May, with Gallup's Economic Confidence Index dropping to -45, the worst since 2022, as 76% of Americans expect the economy to worsen amid the Iran war. This is corroborated by Al Jazeera reporting the same poll. Separately, ECB's Muller sees a 'good case' for a June rate hike due to the energy surge, and Bloomberg reports that big euro-zone economies are enduring an unfolding inflation shock. This hawkish repricing is a key development that counters any dovish thesis. On the geopolitical front, Ukraine's Foreign Minister says US-brokered talks with Russia are running out of steam, signaling potential stalling in diplomatic negotiations. Meanwhile, a Ukraine drone strike on Gazprom Neft's 300k bpd refinery is raising supply concerns, nudging oil higher and boosting energy stocks. In corporate news, Dell stock is up nearly 30% in two weeks after Trump's 'go out and buy a Dell' comment, and Meta quietly released a Reddit-like app 'Forum', causing RDDT to drop on competition fears. The WHO raised the Ebola public health risk to 'very high' in DR Congo, but this remains a low global risk. The stagflation theme is ESCALATING with new data points and official warnings, while the Fed rate hike narrative is shifting from dovish to hawkish.