Total US expenditures for the military campaign against Iran since late February 2026 have amounted to approximately $29 billion. This funding covers costs associated with conducting attacks, logistics, and maintaining a comprehensive blockade of Iranian seaports.

Of this total, $25 billion has been allocated to cover operational expenses during the initial two months of the armed confrontation. Since then, budgetary spending has increased by an additional $4 billion, reflecting a sustained high intensity of technical and personnel resource utilization in the Middle Eastern region. According to Jules Hurst III, the Pentagon’s chief financial officer, the US conflict with Iran is currently estimated at around $29 billion. US lawmakers predict that total expenses could rise to $50 billion if Washington needs to seek emergency supplemental funding from Congress.

Notably, the United States and Israel have launched a military campaign aimed at neutralizing Iranian drone launch sites, field airstrips, and stationary air defense systems. A direct consequence of these attacks has been the blockade of the Strait of Hormuz by Iran, a critical artery for global energy transportation. In response, Washington initiated a maritime blockade of the republic’s largest ports, effectively paralyzing Tehran’s export activities. Ongoing diplomatic consultations have yet to yield significant results, and the persistent fundamental contradictions between the parties increase the likelihood of a new escalation of the conflict in mid-2026.

The global oil market will hardly recover until 2027 if the Strait of Hormuz remains blocked beyond mid‑June. Saudi Aramco CEO Amin Nasser warned investors of the largest historic supply shock to the energy market caused by massive disruptions to commercial shipping.

Before the military conflict between the US and Iran, 20% of world oil shipments passed through this narrow waterway. Nowadays, daily transit has collapsed from around 70 vessels to just 2–5. More than 600 tankers are currently stranded in the Persian Gulf. The lack of a compromise after US President Donald Trump rejected Tehran’s counterproposals has only heightened overall tensions. Assessing the scale of the logistics crisis, Amin Nasser said, “Even if the Strait of Hormuz were to open today, the market would still need months to restore balance. If reopening is delayed by a few more weeks, the recovery will stretch into 2027.”

Weekly losses from the transit shutdown are estimated at 100 million barrels of shipments, and the cumulative net deficit has reached 880 million barrels even after activating Saudi Arabia’s East‑West pipeline and tapping government strategic reserves. This trajectory is rapidly depleting gasoline and jet fuel stocks ahead of the peak summer season. Looking at prospects for reviving logistics, Amin Nasser added, “Even in the most optimistic scenario, energy and commodity supply chains will need several months to return to pre‑crisis traffic levels as vessels are rerouted or brought out of lay‑up.”

Nicola Leibinger-Kammuller, CEO of German technology company Trumpf, described the current state of Germany’s economy in an interview with Handelsblatt as the most dramatic since the end of World War II. According to the representative of the national business community, European industry is facing pressure from a combination of negative factors that surpass the impacts of the global coronavirus pandemic.

Key challenges for the manufacturing sector include persistently high interest rates, inflation, the threat of a full-scale recession, and rising energy costs. Additionally, a massive influx of affordable Chinese goods is flooding the European market and displacing local brands. Commenting on the geopolitical situation, Leibinger-Kammuller emphasized that the alliance with the United States is crumbling and noted that dictatorial tendencies are emerging in France, along with the possibility of authoritarian structures.

The domestic political landscape raises serious concerns for the business community due to plans by German authorities to introduce a wealth tax and the increasing burden on the national pension system. Overall economic instability is underscored by a rise in German inflation, which reached 2.9% in April 2026, directly driven by increased gasoline prices due to the escalating crisis in the Middle East.

Despite the deteriorating macroeconomic environment and the forced global reduction of thousands of jobs, Trumpf is reporting stable growth in incoming orders. The business segment focused on producing lasers for the semiconductor industry is thriving, buoyed by strong commercial demand from rapidly developing data centers.

India’s national currency hit a record low, reaching 95.63 rupees per US dollar in trading on May 13, 2026. The main drivers of the depreciation were volatile global energy prices, lingering geopolitical tensions, and a sharp decline in global market sentiment.  

The rupee has got stuck in a bear trend: on May 11, 2026, it traded at 95.31 per dollar. The fall accelerated shortly afterwards. Pressure on the financial sector worsened following remarks by US President Donald Trump about the fragility of the current peace process in the Middle East. Mr. Trump stressed that the previously reached ceasefire agreement is now literally “hanging by a thread.” Fears of a new escalation are forcing large investors to reassess their positions in emerging markets and shift funds into safe‑haven assets.

India’s Prime Minister Narendra Modi officially appealed to the public to tighten savings measures to protect the country's foreign exchange reserves. The head of government urged citizens to drastically reduce gold purchases, cut consumption of imported fuel, and refrain from non‑essential trips abroad. Alongside the government’s appeals, the domestic stock market is facing a large capital outflow: Indian private investors have already transferred more than $2.2 billion into foreign securities. Massive capital flight and waning confidence in domestic assets are placing a critical strain on the current account balance amid global turbulence.

Indian Prime Minister Narendra Modi addressed the nation, urging citizens to suspend gold purchases and cut fuel consumption for at least one year. In his speech, Modi also recommended that people avoid "non-essential" trips abroad to ease pressure on the country's foreign exchange reserves.

"We should refrain from buying gold jewellery regardless of the occasion," the prime minister said. The bold initiative is aimed at combating a widening trade deficit, which has worsened due to the conflict in the Middle East and soaring energy prices. Gold remains India's second‑largest import after oil, and the country is the world's second‑largest consumer of the precious metal.

Market reaction

The stock market reacted immediately to the prime minister's appeal, with the jewellery sector tumbling. Shares of the industry's largest player, Titan Co., plunged 6.6% in Mumbai trading. Senco Gold slumped 10.8%, and Kalyan Jewellers India dropped 9.5%.

Economic context

India is facing growing pressure on its currency. An energy shortfall and disruptions to oil shipments through the Strait of Hormuz are weighing on the rupee. At the same time, gold imports have already been restricted by administrative measures for banks. Such moves temporarily improved the trade balance in April.

Experts doubt the effectiveness of Modi's appeal because gold is deeply embedded in India's financial and religious culture. The precious metal is the primary savings vehicle for hundreds of millions of families, and its use at weddings is considered essential. An attempt by the government to curb demand for a "safe haven" during a geopolitical crisis may meet strong resistance from a population that commonly trusts bullion more than government bonds.

The American auto industry and lawmakers from both parties have united to block any attempts by Donald Trump to open the market to Chinese cars during the upcoming summit with Xi Jinping, as reported by Reuters.

The escalation of lobbying efforts was sparked by the US president's January comments in Detroit, where he suggested the possibility of Chinese factories being built in the United States. After years of erecting barriers such as tariffs and data security checks, the industry viewed these remarks as a threat of a "bad deal" with Beijing.

Senator Elissa Slotkin (D-MI) and a bipartisan group of 126 lawmakers are promoting legislation that classifies Chinese vehicles as "mobile data collection devices." According to the bill’s authors, modern cars record real-time infrastructure and citizen movements, making their import unacceptable from an intelligence standpoint.

US manufacturers, ranging from steelmakers to car dealers, are further alarmed by statistics from Europe and Mexico. In EU nations, the market share of Chinese brands doubled within a year, reaching 14% in Norway and 11% in the UK. In Mexico, the expansion of 34 brands from China has already captured 15% of the market.

With the average price of a new car in the US exceeding $51,000, affordable Chinese models pose an existential threat to Detroit. Unions and industry leaders are concerned that Trump might trade protections for the domestic market in exchange for promises from China to invest in job creation in "swing" states.

The US administration is attempting to de-escalate tensions. According to Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, the topic of the auto industry is not on the agenda for negotiations. However, there remains a lack of trust within the industry. Businesses worry that the president is keeping "room to maneuver" for a headline-grabbing commitment to attract foreign investments. The business community is clear: any Chinese investment in the sector is seen as a Trojan horse threatening the American industrial base.

Artificial intelligence has emerged as an inflationary factor for the US economy, even before fully realizing its potential for productivity growth. According to a report from Goldman Sachs, this technology is driving consumer prices higher through three primary channels: electronics, software, and energy.

The bank estimates that the AI effect has already added 0.3 percentage points to the annual core personal consumption expenditures (PCE) price index and approximately 0.1 percentage points to the consumer price index (CPI). Analysts expect this trend to continue over the next 12 months.

Hardware and components: Surging demand for server infrastructure has created shortages in memory chips and batteries. According to Goldman Sachs, this will inevitably lead to higher prices for smartphones and PCs in the coming months.

"Markup" for AI solutions: Software developers have begun aggressively monetizing AI features. The bank cites the increased subscription costs for Microsoft 365, as well as price hikes from Adobe, Duolingo, and Intuit, all justified by the introduction of new tools.

Energy demand: The expansion of data centers has significantly increased the load on energy grids. Rising electricity costs in the United States could add another 0.1-0.2 percentage points to PCE inflation in the coming years.

Despite current pressures, Goldman Sachs analysts maintain a long-term optimistic outlook. They believe that over time, AI will become a deflationary force, as automation reduces production costs and enhances overall economic efficiency. In the short term, however, consumers will bear the costs associated with the infrastructure leaps made by tech giants.

The US Senate Banking Committee has scheduled a working session on the “Clarity Act” for May 14. The discussion set for 10:30 AM aims to resolve the long-standing conflict between the cryptocurrency industry and the traditional financial sector.

The legislation establishes clear jurisdictional boundaries between regulators by defining the status of tokens as securities or commodities. For market participants, the passage of this bill is critical, as the lack of a legal framework in the United States is hindering the development of the institutional sector.

A key provision in the agreement between Senators Thom Tillis and Angela Alsobrooks is the prohibition of interest on passive balances of stablecoins. This decision is driven by demands from the banking lobby, as financial institutions are concerned about competition between digital assets and traditional deposits. However, rewards for the active use of tokens (payment transactions) will remain legal.

Banking associations have already launched an aggressive campaign to persuade Republicans, arguing that any “interest loopholes” in the Clarity Act could result in massive liquidity withdrawals from the banking system and undermine financial stability.

The crypto community is pushing for the law to be finalized before the November midterm elections. The House of Representatives approved its version of the bill last summer, but the Senate must pass it by the end of 2026 for it to reach Donald Trump’s desk for approval.

However, hurdles remain due to objections from several Democrats, who are calling for stricter anti-money laundering regulations and limitations on officials affiliated with crypto projects. Nonetheless, Trump’s status as the “crypto president” makes his signing of the law highly likely if it clears the upper chamber of Congress.

China’s gold industry faced a decline in domestic production in Q1 2026, while investment demand rose in parallel. According to the China Gold Association, total output (including processing of imported raw material) fell 3.27% to 136.23 tonnes.

The main hit came at the mines, where production plunged 7.08%. The contraction was caused by widespread safety inspections and forced shutdowns of operations. Against this backdrop, national market players sharply scaled up overseas activity — Chinese companies’ foreign production jumped by more than 30%.

Investment boom vs. jewelry crash

The structure of domestic demand has undergone a radical shift. While total demand rose 4.41% to 303.29 tonnes, high market prices triggered a collapse of 37.1% in the jewelry sector. Consumers largely abandoned jewelry purchases in favor of physical bars and coins, whose sales soared 46.4%.

Official reserves

The People’s Bank of China (PBOC) remained an active buyer, adding another 7.15 tonnes to reserves in Q1. By the end of March, the country’s official holdings reached 2,313.48 tonnes, securing China the fifth spot among the world’s largest official gold holders.

Analysts point to a growing imbalance: regulatory pressure is restricting domestic supply while market volatility is turning gold into the primary safe‑haven asset for both households and the state. The current dynamics are forcing China to rely increasingly on external supplies and foreign mining.

Global stock markets hit record highs after reports of a possible peace agreement between the US and Iran. Prices for both benchmark oil grades plunged sharply amid hopes of a de‑escalation.

US stock indices S&P 500 and Nasdaq set new intraday records on May 7, 2026, reaching 7,365.12 and 25,838.94, respectively. Bullish momentum was also seen across the Asia‑Pacific: Japan’s Nikkei 225 topped 62,000 for the first time in its trading history, and South Korea’s KOSPI posted a new all‑time high. Investors moved back into risk assets in the hope that trade relations would get back on track and geopolitical tensions would ebb away.  

At the same time, US crude WTI fell below the psychological $100 mark for the first time since April 28, 2026, closing at $95.08 per barrel. The international benchmark Brent plunged nearly 8% to $101.27 per barrel. Energy prices fell as the market priced in a near‑term restoration of maritime security and the end of blockades at key shipping chokepoints in the Persian Gulf.

Despite market optimism, the economies of Europe and Asia are still suffering from a protracted energy crisis and jet‑fuel shortages. Analytics firm Kpler recorded a 30% year‑on‑year slump in global jet fuel exports in April, totalling just 1.3 million barrels per day. The dramatic decline in shipments from Middle East terminals keeps pressure on the global aviation industry and limits the pace of recovery in air freight.

The global stock of debt rose by $4.4 trillion in the first quarter to a record $353 trillion. The world debt‑to‑GDP ratio remained at 305%, its 2023 level.

The Institute of International Finance (IIF) links the recent dynamics to heavy borrowing in the United States and a sharp acceleration in nonfinancial corporate debt growth in China. China’s debt burden reached an all‑time high of $36.8 trillion, driven largely by borrowing at state‑owned enterprises. The IIF report notes that investors are diversifying portfolios by reducing exposure to US government bonds. Besides, total global debt had climbed to a record by the end of March, nearly $353 trillion.

Medium‑term forecasts point to further increases in leverage due to population aging and rising spending on defense and energy security. Capital investment in artificial intelligence and the escalation of the Middle East conflict are also materially affecting borrowing volumes. Structural factors are expected to further drive up liabilities in both the public and corporate sectors of the global economy as of May 6, 2026.

According to François Villeroy de Galhau, a member of the European Central Bank Governing Council, rising oil prices do not have a significant impact on overall inflation in the euro area. The regulator has not found evidence that the current increase in energy costs justifies immediate monetary policy tightening.

In an interview with France 5, Villeroy de Galhau emphasized that the ECB is prepared to raise interest rates only if "second-round effects" emerge that could make inflation broad-based and persistent. The bank is closely monitoring whether rising commodity costs are passed on to industrial goods, food, and services, which account for 50% of consumption in the region. Villeroy de Galhau remarked, “If we see such second-round effects, we'll act and raise rates to prevent inflation becoming broad and sustainable.” Currently, there are no signs of systemic price pressure spreading throughout the bloc’s economy.

Last Thursday, the ECB left interest rates unchanged, postponing discussions about potential adjustments until its meeting on June 10-11, 2026. Within the leadership, there are polarized opinions: Bundesbank President Joachim Nagel advocates for a rate hike in the absence of improved growth forecasts, while Peter Kazimir from Slovakia describes such a move as “practically inevitable.” Meanwhile, Villeroy de Galhau is set to step down at the end of May 2026 and will therefore miss the June meeting. In a letter to French President Emmanuel Macron this week, the official stressed the need for a balance between caution and decisive action from the regulator.

The average retail price of gasoline in the United States has surpassed the psychological threshold of $4.50 per gallon for the first time since July 2022, with prices in California reaching $6.14. This sharp increase is driven by a 58% rise in global Brent crude prices since February 28, 2026, due to the blockage of the Strait of Hormuz.

The market situation is further complicated by domestic issues faced by oil refineries. According to Patrick De Haan, an analyst at GasBuddy, the closure of the Strait of Hormuz is steadily pushing oil and gasoline prices higher, with challenges at domestic refineries also contributing to the situation. A recent outage at BP’s Whiting refinery, with a capacity of 440,000 barrels per day, led to the shutdown of processing units, exacerbating local shortages.

Investment bank Morgan Stanley has reported an unusually rapid drawdown in fuel inventories across the country. In the last week of April alone, stocks fell by 6 million barrels, reaching 222.3 million barrels as of April 24, 2026. This figure is 2 million barrels below the five-year seasonal average. Meanwhile, demand remains stable, with average daily consumption over the past four weeks totaling 8.95 million barrels, which is 1% higher than the same period last year.

Electric‑vehicle maker Tesla may pay its CEO Elon Musk up to $158 billion in compensation for 2025. That sum would represent the first tranche under a new $1 trillion compensation package approved by the company’s shareholders.

The actual payout depends directly on meeting business targets. To receive the first portion, the market capitalization of Musk’s company must rise from the current $1.2 trillion to $2 trillion. The full amount would be payable only if the automaker reaches a market value of $8.5 trillion through successful mass production of robots and the market launch of driverless taxis.

News of the new $1 trillion incentive package emerged last autumn. Previously, Tesla approved granting the CEO 96 million shares. In August 2025, those shares were valued at roughly $29 billion, which Elon Musk would receive if he retains his position for two more years. Earlier, a Delaware court annulled another compensation award — twice as large — that he had publicly pledged to use to fund interplanetary travel.

China’s Ministry of Commerce has issued an official directive prohibiting any recognition, enforcement, or compliance with US sanctions imposed on five Chinese petrochemical companies. These American restrictions were slapped due to allegedly confirmed instances of oil trading with Iran.

The ministry explained its decision as a response to what it views as the unjust extraterritorial application of foreign laws. Officials stated that the actions of the United States disrupt healthy commercial activities and directly violate fundamental norms of international relations. Beijing’s stance is reinforced by a statement asserting, “China has always opposed illegal unilateral sanctions that lack a basis in international law and are not authorized by the UN Security Council.” In this context, the Ministry of Commerce has issued an order instructing that the US sanctions against five Chinese enterprises not be recognized, enforced, or complied with.

Earlier, US Ambassador to the United Nations Mike Waltz commented on potential retaliatory measures from the American government. Washington is considering starting inspections of cargo ships transporting oil from Iran to China.

Crypto exchange Coinbase Global Inc. announced a compromise in the US Senate on yielding interest on stablecoins. The agreement removes a key obstacle that had been blocking passage of a bill to structure the crypto market.

At the center of the dispute was the practice of paying custody rewards on digital assets. The traditional banking sector actively lobbied to ban such payments, fearing a mass liquidity outflow from ordinary deposits into higher‑yielding crypto products.

Deal terms

Under the new arrangements, crypto platforms will keep the right to offer yield to customers, but the rules governing how those yields are paid will be tightened considerably in line with banking safety standards. Coinbase Chief Policy Officer Farhad Shirzad stressed that the deal allows users to receive bonuses for “genuine network usage” without turning stablecoins into direct analogs of bank deposits.

Regulatory consequences

Breaking the impasse paves the way for a vote in the Senate Banking Committee. The bill is intended to clarify the allocation of authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). A clear jurisdictional split is expected to reduce regulatory pressure on the industry that has persisted for several years.

Analysts view the compromise as recognition of the growing role of digital assets in the US financial system, with lawmakers attempting to protect Wall Street’s interests while not blocking technological development.

The US economic growth accelerated in the first quarter, recovering from stagnation caused by the winter shutdown. According to data from the Bureau of Economic Analysis, gross domestic product increased by 2% year-over-year, up from 0.5% in the previous quarter, although it fell short of the forecasted 2.2%.

This growth was bolstered by compensatory increases in government spending following a 43-day government shutdown, as well as a boom in the construction of data centers to support artificial intelligence needs. The IT infrastructure essentially offset the decline in consumer activity, which began in February amid the war in Iran.

A major negative signal was a sharp spike in prices. The Personal Consumption Expenditures (PCE) price index reached 3.5% in March, reflecting a surge in gasoline prices above $4 per gallon. The blockade of the Strait of Hormuz, along with US and Israeli military actions against Tehran, continues to exert pressure on the energy market, fueling inflationary expectations.

The core PCE price index, which excludes volatile items and fuel, rose to 4.3% in the first quarter, surpassing market expectations of 4.1%. Analysts at CIBC describe this level as “uncomfortably high” for the Federal Reserve, raising questions about any potential easing of monetary policy.

Despite inflationary pressures, investors continue to view the US dollar as a safe-haven asset. The status of the United States as the largest exporter of energy creates an illusion of insulation from global shocks, ensuring a steady capital influx. However, experts predict further cooling of consumption, as American households are forced to reallocate budgets in favor of rising fuel costs, which is likely to slow the economy in the second quarter.