Zylostar Market Wrap – May 28, 2026

Global markets traded cautiously on Thursday as renewed Middle East tensions, rising oil prices, and persistent inflation concerns pressured risk sentiment across equities and bonds. Investors continued to monitor developments between the US and Iran after fresh US airstrikes on an Iranian military facility pushed Brent crude close to $97 per barrel, reigniting fears that elevated energy prices could keep global inflation higher for longer.

US equity futures moved lower, with S&P 500 futures falling 0.3% and Nasdaq 100 futures losing 0.5%, while European equities also declined as higher Treasury yields weighed on technology and growth sectors. The US 10-year Treasury yield climbed toward 4.5% as traders reassessed the likelihood of prolonged restrictive monetary policy from the Federal Reserve.

On the economic front, US data showed consumer spending remained resilient, with Personal Spending rising 0.5% MoM in line with expectations. Meanwhile, inflation data came broadly close to forecasts, as Core PCE YoY printed at 3.29% against expectations of 3.3%, while headline PCE inflation YoY held steady at 3.8%. However, US GDP growth disappointed, with the second estimate for Q1 GDP revised down to 1.6% from the expected 2.0%, signaling some moderation in economic momentum.

Federal Reserve officials maintained a cautious tone. New York Fed President John Williams stated that monetary policy remains “slightly restrictive” and “well-positioned,” while emphasizing that persistently high inflation could still require higher rates if necessary. He also highlighted that long-term inflation expectations remain anchored despite elevated short-term pressures and warned that rising energy costs linked to the Middle East conflict could weigh on consumer spending.

Additional hawkish comments from Fed officials throughout the week reinforced concerns that interest rates may stay elevated for longer, especially if higher oil prices begin feeding into broader inflation trends. Markets are increasingly focused on whether geopolitical risks and energy-driven inflation could delay any future policy easing from major central banks.

In currency markets, the US dollar strengthened for a third consecutive session as investors sought safe-haven assets amid geopolitical uncertainty, while Bitcoin dropped to its lowest level in more than six weeks. Meanwhile, Asian equities snapped their recent winning streak as investors turned more defensive heading into the end of the week.

By Amir Amidian
Senior Market Analyst | Zylostar