U.S. STOCKS EXTEND FALL, NASDAQ DOWN 1.00 PCT

🚨PENTAGON SENDING THOUSANDS OF ADDITIONAL MARINES TO MIDDLE EAST The Pentagon is deploying thousands of additional Marines and three warships to the Middle East, expanding its military presence. Around 2,200–2,500 Marines from the USS Boxer group are heading to the region, following a separate deployment earlier this week. The buildup comes despite President Trump saying he has no plans to put U.S. troops on the ground in Iran.

🚨PENTAGON SENDING THOUSANDS OF ADDITIONAL MARINES TO MIDDLE EAST

🚨 NO TANKERS LOADED WITH CRUDE OIL HAVE SAILED THROUGH HORMUZ IN PAST 24 HOURS – DATA, MARKET ASSESSMENTS

TRUMP: NATO HELPING WITH HORMUZ WOULD BE SO EASY, LITTLE RISK

TRUMP BLASTS NATO OVER OIL AND IRAN Donald Trump criticized NATO allies for refusing to join efforts against Iran, claiming the U.S. carried the fight and secured victory. He argued allies are now complaining about high oil prices while failing to help reopen the Strait of Hormuz, which he called an easy, low-risk task. Trump warned the U.S. would remember the lack of support, calling NATO “a paper tiger” without American leadership.

DIESEL SPIKE HITS THE REAL ECONOMY Diesel—not gasoline—is the bigger economic risk, as it powers nearly every part of the supply chain. Prices have surged past $5/gallon, sharply increasing costs for trucking, shipping, farming, and manufacturing. Businesses are already adding fuel surcharges or raising prices, with some losing customers as a result. Because diesel is embedded in almost all goods, higher costs ripple through the economy—pushing up inflation and squeezing margins. Even a 10% rise in diesel can lift overall consumer prices. With oil above $100 and supply risks elevated, sustained diesel spikes could drive broader inflation and slow economic activity.

OIL SPIKE FUELS RECESSION FEARS Recession odds are rising fast, with markets now pricing a 36% chance—up sharply in recent weeks. At the same time, surging oil prices are adding pressure. Strategist Kristina Hooper warns that crude at $120–$130 could tip the U.S. into recession, as higher energy costs hit consumers. With oil already back above $100, markets are increasingly on edge—linking energy shocks directly to growing recession risk. https://t.co/oIxoLyT1aA

TREASURY YIELDS EXTEND CLIMB, 10-YEAR TO YTD HIGH 4.32%

TRUMP CALLS ON CONGRESS TO PASS THE FARM BILL 'NOW'

FED HIKE BACK IN PLAY IF OIL SHOCK PERSISTS Bank of America says markets have largely ruled out Fed rate cuts—and are now asking what could trigger hikes instead. The bank outlines three key conditions: a stable labor market, Jerome Powell staying as Chair, and a sustained but moderate oil shock from Iran. Rate hikes become likely if oil holds around $80–$100. Sticky inflation and rising energy prices are keeping pressure on the Fed, making cuts harder to justify. Powell has already struck a hawkish tone, emphasizing inflation risks and uncertainty סביב the Iran conflict. Bottom line: if the oil shock lingers, the Fed could shift back toward tightening.

WALLER DO NOT THINK THERE IS A NEED TO CONSIDER RATE HIKES

CHINA TELLS APPLE IT COMMITTS TO BUILDING STABLE SUPPLY CHAIN

WALLER WANT TO WAIT AND SEE HOW THIS EVOLVES BEFORE DECIDING ON RATE CUTS FOR LATER THIS YEAR

UBS SEES S&P 500 SURGING TO 7,700 UBS remains bullish on U.S. stocks, expecting the S&P 500 to reach 7,300 by mid-2026 and 7,700 by year-end. The bank says the rally is supported by strong earnings growth, expected Fed rate cuts, and continued AI-driven gains. It forecasts 11% profit growth in 2026. Geopolitical risks are seen as temporary, with UBS expecting energy markets to stabilize. While prolonged disruption could weigh on stocks, history suggests markets typically rebound after such events. Despite recent volatility, UBS believes the overall outlook for equities remains positive.

WALLER: CLOSURE OF HORMUZ SUGGESTED MORE INFLATION PRESSURE