Oil prices and inflation concerns stayed at the center of markets as US–Iran tensions continued, supporting expectations that the Federal Reserve may keep policy tighter for longer.

Bond markets ended the week under continued pressure from inflation and energy costs. 

Inflation has pushed back to the center of the market narrative, keeping both the dollar and bond yields firmly supported.

Iran’s oil flows from Kharg Island, the country’s main export hub, appear to have stalled for several days for the first time since the conflict began, according to satellite imagery.

President Trump described the US-Iran ceasefire as being on “massive life support” after dismissing Tehran’s latest proposal, which reportedly included sanctions relief, an end to the naval blockade, and continued Iranian influence over the Strait of Hormuz.

Global markets remained focused on the intersection of geopolitics and policy as investors tracked developments around Iran and the upcoming Trump–Xi summit in Beijing on May 13–15.

US-Iran relations revived supply concerns and cautious optimism tied to the Strait of Hormuz.

Thursday opened with a softer dollar tone as optimism around a potential US-Iran agreement continued to build.