WS #9459

The dominant signal in this window is the US May CPI release, which came in at 4.2% YoY (in line with expectations) but marks a three-year high and the third consecutive monthly increase since the Iran war began. Core CPI rose 0.2% MoM (below the 0.3% estimate), offering a slight dovish offset. The inflation data reinforces the Fed's higher-for-longer stance, with markets now pricing in a potential rate hike by year-end. This is corroborated across BBC, Guardian, CNBC, Bloomberg, and multiple social media sources. Separately, SpaceX IPO is drawing billions in orders from Middle Eastern funds, including the Qatar Investment Authority, signaling strong demand. Trump Media & TAE Technologies abandoned the Truth Social spin-off plan. German Chancellor Merz made conflicting statements on nuclear deterrence and the FCAS fighter jet project with France, later corrected to focus on drone tech and European defense industry—creating uncertainty for European defense stocks. IRGC launched a missile strike against a US base in Jordan, escalating Middle East tensions. Ukrainian strikes hit an arms factory and oil refinery deep inside Russia. The narrative arc for US-Iran tensions is ESCALATING, while the inflation narrative is STABLE (in line with expectations but elevated).