• It was an ugly day for US stocks.
• Carney: Canada Focused on a Comprehensive USMCA Deal
• Crude oil futures settled at $92.19 up $5.36 or 6.17%
• AMD and Cerbras form a partnership that makes chips faster and more efficient.
• EU Google Fine Escalates U.S.-EU Trade Tensions
• US Senate blocks resolution curbing Trump’s Iran War Powers. Tensions remain high.
• The story gets worse: 30 year mortgage rates reach the highest level since August 2025
• Pres. Trump: Considering a massive attack greater than anything before.
• WSJ Timiraos: Fed is heading into one of the most unpredictable meetings
• Middle East tensions remains high with Iran increasing hostilities
• Canada PM Carney: Will not hesitate to defend its interest in trade war with the US
• ECB’s Lagarde: Recent data points to some improvement in economic activity.
• US initial jobless claims 187K versus 212K expected
• Canada Retail sales for May 1.0% versus 1.0% expected
• The full statement from the ECB as they keep rates unchanged.
• ECB leaves deposit rate unchanged at 2.25%, as widely expected
• Kickstart the North American session with a technical look at the EURUSD, USDJPY and GBPUSD
• investingLive European markets wrap: Oil prices continue to surge higher, dollar climbs alongside bond yields

It was a long day in the market, much like the epic Christopher Nolan movie Odessey.  The markets closed sharply lower on Thursday as investors grappled with escalating Middle East tensions, surging oil prices, and rising Treasury yields. President Trump’s comments that he is “close to making a decision” on a military strike against Iran larger than any previous operation added another layer of uncertainty, keeping risk appetite under pressure.

Stocks

• Dow: -507 points (-0.97%)
• S&P 500: -90.68 points (-1.21%)
• Nasdaq: -553.21 points (-2.15%) — weakest of the major indices as technology shares led the decline.
• Russell 2000: -0.67%

Bond Market Higher oil prices reignited inflation concerns, sending Treasury yields higher across the curve.

• 2-year: 4.351% (+4.9 bps)
• 5-year: 4.456% (+4.9 bps)
• 10-year: 4.699% (+4.2 bps)
• 30-year: 5.165% (+1.8 bps)

Commodities

• WTI crude oil: $92.36 (+6.37%)
• Brent crude: $100.51 (+6.85%)
• Gold: -80 or -1.92% to $4049
• Silver: -$2.11 or -3.54% to $57.61

The USD moved higher.. Some technical highlights heading into the new trading day:

• USDJPY: The USDJPY traded to yet another 40 year high and got within 2 pips of another milestone at 164.00. The 164.50 is a target from a swing high level going back to 1986.
• EURUSD: The EURUSD nearly broke below consolidaton month long support going back to late June at 1.1362. Watch that level for more bearish clues going into the new trading day. 
• USDCAD. The USDCAD was quiet and little changed today with support holding at the 100/200 hour MAs at 1.4065.  Stay above is more bullish in the new day. Move below tilts the short term bias more to the downside. 
• GBPUSD. The GBPUSD held support at the 61.8% of the move up from the June 24 low at 1.3299 (call is 1.3300).  THat will be a close downside barometer going into the new trading day. 
• AUDUSD: The AUDUSD moved down to test the low of a swing area at 0.6961 after finding resistance against the 38.2% retracement in the Asian Pacific session at0.7022. Sellers came in and sold the pair to the swing area.  Can the seller push below 0.6961 in the new trading day. 

The Three Big Market Themes

Geopolitics remained the dominant driver. President Trump said he is seriously considering a “massive attack” against Iran that would exceed previous U.S. military operations, although no final decision has been made. The comments helped fuel another sharp rally in oil prices and kept investors positioned defensively.

The Fed outlook became even more uncertain. According to Nick Timiraos of the Wall Street Journal, next week’s FOMC meeting is shaping up as one of the most unpredictable in years. Higher oil prices strengthen the argument for another rate hike, while softer inflation data continue to support leaving rates unchanged. Markets currently price roughly a 40% probability of a September hike, with Chairman Kevin Warsh’s stance viewed as the key wildcard.

The ECB held steady but stayed cautious. ECB President Christine Lagarde acknowledged modest improvements in euro-area activity but stressed that energy-related inflation risks remain elevated. The Governing Council unanimously left policy unchanged, emphasized that no second-round inflation effects have emerged, and reiterated that September’s decision will depend entirely on incoming data.

Bottom Line

The market finished the day in classic risk-off mode. Rising geopolitical tensions pushed oil sharply higher, Treasury yields climbed as inflation fears resurfaced, and equities—particularly technology stocks—came under heavy selling pressure. With the Fed meeting next week and Middle East developments continuing to unfold, investors head into the weekend facing elevated uncertainty on both the geopolitical and monetary policy fronts.

This article was written by Greg Michalowski at investinglive.com.