Energy-driven inflation concerns are rattling the bond market as the U.S. war with Iran continues without a clear resolution. Yields on the benchmark 10-year Treasury note climbed nearly 24 basis points last week to end Friday near 4.6%. The move reflects growing anxiety among bond traders that persistent oil prices above $100 a barrel will force interest rates to stay higher for longer.
Geopolitical tensions escalated over the weekend after President Trump posted on social media that "the Clock is Ticking" for Iran, warning of further military action if a peace deal is not reached. The rhetoric pushed crude oil prices up nearly 2% Sunday night to above $107 a barrel. The price surge follows a 10.5% jump in U.S. crude futures last week, compounding pressure on a domestic economy already facing 3.8% annual inflation.
Supply shortages and insider bets
The physical constraints of the conflict are becoming increasingly acute. Former Deputy National Security Adviser Daleep Singh warned that the oil market could be missing 100 million barrels a week. Singh noted that additional output from the Permian Basin would only cover a "tiny fraction" of that shortfall as the Strait of Hormuz remains closed to traffic. Amid this volatility, data analytics firm Bubblemaps identified nine connected Polymarket accounts that netted $2.4 million betting on specific military milestones with a 98% win rate, sparking fresh concerns about insider trading on nonpublic military information.
Corporate earnings test
The retail read. While the tech-heavy Nasdaq has remained resilient, the broader market is showing signs of a "K-shaped" divergence. Higher-income consumers are maintaining spending, but lower-income Americans are cutting gas usage. This dynamic puts a spotlight on major retailers reporting this week:
- Walmart reports early Thursday, providing a critical update on whether shoppers can remain "resilient" against skyrocketing fuel costs.
- Home Depot and Target will also post results, testing if high rates are further cooling the housing and renovation markets.
- The Federal Reserve will release meeting minutes on Wednesday, offering insight into how officials are weighing the war against the recent inflation surge.
The immediate focus for many investors remains Wednesday's first-quarter results from Nvidia, as the market looks for evidence that AI demand can continue to offset the geopolitical drag. Nvidia results land Wednesday evening.
