Stocks Rebound Amid Iran Deal Hopes

For the week ending 12 June 2026

As of midday Friday, global equities were higher on the week amid reports that the US and Iran are finalizing a memorandum of understanding to end the war. The yield on the US 10-year Treasury note declined six basis points from last Friday to 4.48%, while the price of a barrel of West Texas Intermediate crude oil fell $6.75 to $85. Volatility, as measured by futures contracts on the Cboe Volatility Index (VIX), rose to 18.4 from 17.4.

MACRO NEWS

US–Iran deal reportedly nearing finish line

After trading repeated blows with Iran earlier in the week, on Thursday, US President Donald Trump called off additional strikes scheduled for later that evening, saying a memorandum of understanding had been reached with Iranian leadership. The pact could be signed as early as Monday in Switzerland, just ahead of a G7 summit that starts the next day across the border in the French Alps. However, Iranian state media continues to caution that no agreement has been finalized, though a draft is under internal review. On Friday morning, Trump disputed what he characterized as Iranian leaks of the terms of the MOU, which he called “fake news” and warned Iran to “get their act together.” However, a short while later, Iranian Foreign Minister Abbas Araghchi posted on X that a MOU “has never been closer.” Oil and natural gas prices have fallen sharply in recent days, accelerating Thursday and into Friday, on hopes an agreement will be reached that would reopen the Strait of Hormuz and start a 60-day negotiation over the fate of Iran’s nuclear enrichment program. Bond yields also eased modestly.

Deal or no deal, more oil is flowing from the Mideast

Prior to this most recent peace overture, oil flows from the Middle East have improved despite persistent geopolitical risks. Ship traffic through the Strait of Hormuz has risen meaningfully, aided in part by US military support, while Gulf producers appear to be finding ways to keep moving barrels even as tensions with Tehran remain elevated. Bloomberg estimates that roughly two million barrels per day of oil and related products are now exiting the Gulf — still well below normal, but materially above earlier levels — and that non-Iranian flows through the Strait have reportedly surged by about 50% so far this month. A sharp drop in Chinese oil imports has also helped calm energy markets in recent weeks.

US May inflation data send mixed signals

The month-over-month rise in US CPI came in below expectations on Wednesday at 0.2%, but PPI rose a significantly hotter-than-expected 1.1% from the month before. Taken together, the components of the two reports that feed into core PCE — the Fed’s preferred inflation gauge — suggest a rise of 0.4% when the data are released near the end of the month, a figure that should keep the Fed firmly on inflation watch with the potential for a rate hike before the end of the year. New Fed Chairman Kevin Warsh is set to lead his first FOMC meeting next week, and while no rate move is expected, the Fed’s dovish policy bias will likely be abandoned.

Supreme Court ruling guards fund firms

The US Supreme Court issued a ruling Thursday that shields funds from some investor lawsuits, finding that the Investment Company Act of 1940 does not authorize shareholders to sue over bylaws or management decisions. The court also said the law does not authorize private lawsuits for most violations, instead leaving enforcement to the US Securities and Exchange Commission. This ruling reverses a previous federal appeals court decision that said the law contained a so-called private right of action that would let investors sue to rescind contracts made by a fund.

QUICK HITS

The US Court of Appeals for the Federal Circuit ruled on Thursday that the Trump administration can continue to enforce its 10% global tariffs under Section 122 of the Trade Act of 1974 while the government appeals a lower court’s decision.

Amid market volatility due to the war in Iran, US household net worth rose $113.1 billion in Q1 to $183 trillion, a slower pace than the $1.73 trillion gain in Q4 2025.

US existing home sales rose 3.2% month over month in May while April sales were revised up to a gain of 0.7% from 0.2%.

Amid a policy dilemma of weak growth and rising inflation, the Bank of Canada held rates steady at 2.25%, as expected.

Japan’s economy grew at an annualized 1.8% in Q1 after a downward revision from 2.1%.

Despite the Iran war, Japan has secured stable oil supplies through the end of March 2028 through a combination of alternative crude ​imports and stockpile releases, Prime Minister Sanae Takaichi said on Thursday, extending ‌the country’s previous supply outlook by around one year.

The US trade deficit narrowed slightly to $55.9 billion in April due to an increase in exports.

The trustees of the US Social Security retirement trust fund project that the fund will be depleted at the end of 2032, one quarter earlier than last year’s forecast.

British Prime Minister Keir Starmer is planning to tell ministers to quit if they back Andy Burnham or any other rival in a Labour leadership contest, the Financial Times reported this week. Separately, UK Defense Secretary John Healey resigned Thursday from Starmer’s cabinet over insufficient defense funding.

The Fed will release its annual stress test of large banks on June 24.

According to data compiled by Bloomberg, governments in Europe and Asia are borrowing from syndicated bond markets — which is offered to investors via banks — at a record clip as public spending surges. Sovereign issuers have sold $504 billion of the debt so far this year.

Bank of Japan Governor Kazuo Ueda has been hospitalized and is expected to miss next week’s policy meeting, according to the BOJ. He is expected to remain hospitalized for about two weeks.

After months of delay, President Trump signed a $70 billion package funding US Immigrations and Customs Enforcement and Customs and Border Protection operations through the end of his second term.

President Trump announced Thursday that the US won’t renew the USMCA trade deal. July 1 is the date by which all three nations are required to meet and formally decide whether to extend the trade deal for an additional 16-year term.

Consumer spending momentum remains robust, with total card spending rising 5.1% year over year in May, the strongest growth in nearly four years, according to Bank of America internal card data. Moreover, this growth isn’t just gasoline-driven — the underlying spending remains firm across both goods and services.

Shares in SpaceX are expected to begin trading on Friday after the IPO was priced at $135 per share, raising about $75 billion in fresh capital at a valuation of $1.77 trillion. About 20% of the offering is expected to be allocated to retail investors, down from the original 30% target. Bloomberg reports that the offering was more than four times oversubscribed.

THE WEEK AHEAD

Monday: US and eurozone industrial production

Tuesday: US housing starts

Wednesday: UK and eurozone CPI; US retail sales, pending homes sales, FOMC meeting

Thursday: UK unemployment, Bank of England meeting

Friday: Japan CPI; UK retail sales, Canada retail sales; US closed for Juneteenth

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Sources: MFS research, Wall Street Journal, Financial Times, Reuters, Bloomberg News, FactSet Research.