Market Overview

Oil prices fell after President Trump canceled planned strikes on Iran. Removing immediate war fears instantly lowered prices by easing concerns over blocked oil supplies. Yet, underlying risks persist: ocean tankers are still being attacked, oil supply increases are tiny, and persistent inflation—rising living costs—forces central banks to keep interest rates high. Going forward, watch whether talks over shipping routes produce an enforceable safety agreement or merely serve as a temporary pause.

Big tech companies are spending huge sums on artificial intelligence equipment. Because this spending eats up their money, their free cash flow—cash left over—has dropped sharply or turned negative. To keep building, companies rely more on long-term debt (borrowed money), which weakens their financial safety cushion and threatens their credit ratings. Expensive computer memory parts are making costs grow even faster. Moving forward, watch whether fast-growing cloud sales can keep profits strong enough to cover these high costs before shrinking cash triggers actual credit rating downgrades.

The US and Japan teamed up to buy Japan’s weak currency, the yen. To raise cash, Japan borrowed against its US bonds—government debt holdings—rather than selling them directly. This avoided a market crash that would spike global borrowing costs. The stronger yen also punished investors who borrowed cheap yen to buy US assets. Next, watch whether officials use this intervention tool regularly or if it remains just a temporary fix.