Gas prices hit home as Iran tensions flare again | Morning Bid

追加: 2026-05-27

[00:00:02]Today, fresh US strikes on Iran cut across optimism about peace talks.

[00:00:06]>> [music] >> Plus, oil prices reverse part of Monday's drop, but tech void stocks hold up. And the US consumer confidence update shines a light on how high gas prices are affecting sentiment.

[00:00:18]This is Reuters Morning Bid bringing you unfiltered market news and analysis straight from the Reuters newsroom 7 days a week. I'm Mike Dolan in London.

[00:00:26]And I'm Amanda Cooper. It's Tuesday, [music] May 26th.

[00:00:31]Well, Mike, going into the weekend, there was all this optimism about a possible peace deal. Both sides indicating willingness to talk, to thrash things out, that a resolution was perhaps near. Trump saying negotiations were going along nicely.

[00:00:45]And we come into Tuesday after a long weekend, and there's what the US has termed defensive strikes on southern Iran. Sounds like we've been here a million times before in the in certainly over the last 3 months, but it has it as you say long weekend coming back on Tuesday. A Memorial Day in the States, and bank holiday in many centers around the world including including in London.

[00:01:06]I think anyone watching headlines through that week weekend for the most part would have said, "Yeah, something's happening. Finally, we're getting a breakthrough." A bit of a good cop, bad cop going on between President Trump and Secretary of State Rubio as to how soon that could be that could be agreed, but then we get to last night. And there have been fresh strikes. Now, those fresh strikes I think you you can see from from even from the way the market is reacting are perhaps considered to be ways of accelerating an agreement rather than renewing the conflict. We're too far away really to judge that in in detail, but on Monday before those strikes, we had oil prices down about 5% back below $100 a barrel.

[00:01:52]About 2% rise in European stocks who obviously were quite affected by the by the energy squeeze and even a milestone in Italy where where it's benchmark index hit a record high so breaching a peak from 26 years ago from 2000 so so another battle ringing in this kind of stock market rally that seems to be going on despite this this conflict. However, we're back Tuesday morning with a little bit more trepidation as to what happens next. So it's still a guessing game.

[00:02:25]Definitely. I it does feel there is a sense you can see from the market reaction of we've we've we've seen this film before at least this episode of this season before.

[00:02:35]US stock futures up again this morning.

[00:02:38]Oil up again but only to the tune of about 2% so yeah, I mean it's reversed some of Monday's losses but not an awful lot which sort of you know it's not the kind of market response that we would have had say 6 weeks ago it would have been a lot more dramatic. It feels like a lot of no disruption is priced in rising inflation is priced in and therefore you know the expectation is that a deal will be coming at some point. Yeah, I think it's important to see what the reports were saying this deal might contain and and they were talking about agreement on a 60-day ceasefire during which there would be a complete opening of the Strait of Hormuz which is obviously where where the the the the market focus would be given the energy implications.

[00:03:19]60 days is a long time and and as we've seen through the ceasefire so far there's a lot of back and forth when in a technical ceasefire is there a reason for the markets to be kind of a little bit more wary than they appear?

[00:03:32]Possibly because we're entering June and June is is a tough month not so much for the stock markets which have a lot of things going on like AI and all of the the tech story but with a rates market as which I think is where the crunch is where we need to watch closely. There was a big rally yesterday on the back of that oil price drop but we're going into June which is going to be a difficult month for the rates market for all sorts of reasons. We have a new Fed chair. Uh he was sworn in on Friday night. Uh we have a definite shift in the Fed story because uh board member Christopher Waller came out on Friday and said he was prepared to vote for removal of a of language in the Fed statements uh that that suggested there was still an easing bias. And even President Trump has changed his tune on this. He's saying that Walsh can do whatever he likes. So, it's um it's it's a different picture for the Fed and the rates market now has to watch that very closely, but as we can see for the last 24 hours, things can change very quickly, too.

[00:04:28]We're also waiting June two big rate uh rises likely in the G7, European Central Bank, and the Bank of Japan. So, that's another reason why timing of this deal may be important. But, we get some updates today. What what we get a US consumer confidence update. What do What do you make of that?

[00:04:47]Well, the most recent readings we've had were you know, you look at the University of Michigan. And I know that people say, "Oh, well, that that's often affected by um political views and so on." But, the reality is that consumers are consumer confidence is near record lows. And people are specifically citing high fuel prices as a reason for their you know, their less upbeat sentiment.

[00:05:08]Yeah, we saw a similar thing in the UK last week. Data showing a an unexpected drop in retail sales last month, mostly because of consumers cutting back on how much they're spending on fuel. And this may well have an implication for the election year, of course, which is which is very important. Is Is that come on to the market radar yet? You think November's uh congressional midterms?

[00:05:30]From what we can see, I mean, if you look at indicators, you know, forwards, swaps, futures, that kind of thing, I'd have to say no. No, people often say that midterm years tend to be more volatile for markets, but ultimately for the stock market, it doesn't really matter. For the dollar, there isn't really a kind of direct implication although I suppose if we saw um you know you know the expected outcome is a is effectively a blue wave.

[00:05:54]But what that means with Republican Trump in the White House for pushing forward anything on spending or things that might affect the fiscal picture is anyone's guess really. So I'm going to say for now no.

[00:06:13]For today's recommended read, check out Clyde Russell's column on how China's weak steel output shows a structural shift. The link is in the show notes.

[00:06:21]And for more of any of today's stories head to reuters.com or the Reuters app.

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[00:06:31]We'll be back tomorrow.