Daily News – 20th May ’26
Daily News
S&P 500 Posts Third Straight Loss as Rising Yields Drag Stocks; Treasuries Enter 'Danger Zone'
20 May 2026
Today in Brief
Asia-Pacific markets traded mixed Tuesday as oil eased after President Trump postponed a planned Iran strike, with Brent crude falling 1.3% to $110.60 and WTI slipping 0.06% to $108.59 per barrel. The S&P 500 fell for a third straight session, dropping 0.67% to 7,353.61, while the Nasdaq slid 0.84% to 25,870.71 and the Dow shed 322.24 points to 49,363.88, as the 30-year Treasury yield briefly topped 5.19% — its highest in nearly 19 years. Gold traded below $4,500 after tumbling nearly 2%, and WTI slipped toward $103 as Trump warned of resumed Iran strikes within "two or three days."
HSBC warned that U.S. Treasuries are now firmly in the "danger zone." The EU cleared a major hurdle toward finalizing a U.S. trade pact to sidestep Trump tariff hikes. Putin met Xi in Beijing, with the stalled Power of Siberia 2 pipeline back on the agenda. The Indian rupee hit a record low near 97 per dollar amid the oil price shock. Alibaba unveiled the Zhenwu M890 AI chip, three times more powerful than its predecessor. Nvidia announced a new Singapore research hub. GM said it will assemble the Chevrolet Groove and Aveo in Mexico. Airbus ordered a fresh 10% cut in non-industrial spending amid global uncertainty.
Asia markets trade mixed as oil eases after Trump delays planned Iran strike
Asia-Pacific markets traded mixed Tuesday as oil prices, while elevated, eased slightly following news that President Donald Trump was postponing a scheduled attack on Iran. International benchmark Brent crude futures for July delivery fell 1.3% to trade at $110.60 per barrel as of 4:25 a.m. ET. West Texas Intermediate futures declined 0.06% to $108.59 per barrel. Investors were assessing Japan's first-quarter GDP data, which showed the economy grew at an annualized 2.1% in the first three months of the year. The growth was sharply higher than the Reuters-polled analysts' average estimate of 1.7%, and against the 1.3% in the previous quarter. These figures do not capture the full impact of the Iran war, which started at the end of February.
S&P 500 posts third straight losing session as rising yields drag down stocks
Stocks closed lower Tuesday, with the S&P 500 posting its third straight losing session, as a jump in bond yields threatened the bull market. Traders also monitored the oil market following President Donald Trump's cancellation of planned attacks on Iran. The S&P 500 closed down 0.67%, ending at 7,353.61, while the Nasdaq Composite finished 0.84% lower at 25,870.71. The Dow Jones Industrial Average shed 322.24 points, or 0.65%, to close at 49,363.88. Volatility in the bond market added a new wrinkle to the bull market. The 30-year Treasury yield briefly topped 5.19% on Tuesday for its highest level in nearly 19 years.
Gold traded below $4,500 an ounce on Wednesday after tumbling nearly 2% in the previous session
Gold traded below $4,500 an ounce on Wednesday after tumbling nearly 2% in the previous session, as escalating tensions between the US and Iran kept investors focused on inflation risks and the prospect of higher interest rates. President Donald Trump warned that the US could resume strikes on Iran within "two or three days" if Tehran failed to agree to Washington's peace terms. The remarks came shortly after Trump said he had called off a planned attack following appeals from Gulf allies, with Tehran's nuclear program being a major sticking point in negotiations. The prolonged conflict has effectively kept the crucial Strait of Hormuz closed to shipping, driving oil prices higher and intensifying inflationary pressures.
WTI crude fell toward $103 per barrel on Wednesday, pulling back from recent highs
WTI crude fell toward $103 per barrel on Wednesday, pulling back from recent highs as investors assessed President Donald Trump's renewed threat to resume military strikes on Iran if it failed to accept US peace terms. The comments came less than a day after Trump said he had called off a planned attack following appeals from Gulf allies, while warning that Washington could act within "two or three days." The developments added to persistent uncertainty surrounding the Middle East conflict, with Iran's nuclear program remaining a key obstacle in negotiations. The war has now entered its 12th week and has effectively kept the strategic Strait of Hormuz closed to shipping traffic, supporting oil prices and fuelling inflation concerns.
U.S. Treasurys are now firmly in the 'danger zone,' strategists say
U.S. Treasurys have entered a "danger zone" as surging long-term yields raise fears that sticky inflation and hawkish rate expectations could begin spilling over into equities and broader risk assets, said HSBC. The selloff in government bonds intensified Tuesday, pushing the 30-year Treasury yield above 5.19% to its highest level since 2007. Meanwhile, the benchmark 10-year yield climbed toward 4.69%. Yields on the 30-year are up slightly less than 1 basis point at 5.184% as of 9:10 p.m. ET, while yields on the 10-year are at 4.667%. HSBC strategists wrote in a note late Tuesday that U.S. Treasuries are now firmly in the danger zone — the level of 10-year UST that tends to put pressure on virtually all asset classes — warning that further repricing in terminal rate expectations could drive yields even further into danger territory, likely leading risk assets temporarily lower.
EU clears major hurdle to finalize U.S. trade pact — and sidestep Trump tariff hikes
European Commission President Ursula von der Leyen on Wednesday welcomed a provisional agreement on legislation to remove import duties on U.S. goods and called on co-legislators to move swiftly to finalize the process. EU lawmakers welcomed the breakthrough after more than five hours of talks overnight, saying it likely paves the way for the 27-nation bloc to avoid a threat by U.S. President Donald Trump to punish a further delay with higher tariffs. The agreement includes a safeguard mechanism that would let Brussels suspend tariff reductions in the event that U.S. imports harm European industry. It also allows the European Commission, the EU's executive arm, to suspend tariff preferences if the U.S. continues to apply a tariff rate higher than 15% on EU steel and aluminum derivatives by the end of 2026.
Putin-Xi talks revive stalled Russian gas pipeline as Iran war rattles energy markets
Russian President Vladimir Putin met with Chinese leader Xi Jinping in Beijing on Wednesday, with the long-stalled Power of Siberia 2 natural gas pipeline on the agenda, as the Iran war disrupts energy supplies. Kremlin foreign policy aide Yuri Ushakov said Tuesday that the project will be discussed in great detail between the leaders. The planned 2,600-kilometer pipeline would carry 50 billion cubic meters of gas annually from Russia's Yamal fields to China via Mongolia. Moscow and Beijing signed a legally binding memorandum to advance construction in September 2025, but pricing, financing terms, and a delivery timeline remain unresolved.
Indian rupee hits record low, USD/INR nears 97 amid oil price shock
The Indian rupee hit a record low to the dollar on Wednesday, as high oil prices and concerns over the Iran war spurred major capital outflows from Indian markets. The rupee's USD/INR pair — which gauges the number of rupees required to purchase one dollar — hit a record high of 96.8650 rupees, marking a seventh consecutive record high. The currency was pressured by a spike in oil prices this week, as a U.S.-Iran deadlock in the Strait of Hormuz showed few signs of lifting, even as Washington flagged some progress in negotiations. While oil prices did cool on Wednesday, they still retained an over 50% jump from late February. The rupee has weakened about 6% since the beginning of the war, making it among the worst-performing Asian currencies. The rupee is especially vulnerable to higher oil prices, given that India imports over 80% of its crude requirements.
Alibaba reveals more powerful Zhenwu AI chip, new LLM
Alibaba on Wednesday announced a new artificial intelligence chip that is three times more powerful than its predecessor, adding to China's domestic AI chip options as Nvidia struggles to get its products into the country. The Zhenwu M890 delivers three times the performance of the current Zhenwu 810E, Alibaba said, adding that the new processor has 144 GB GPU memory and interchip bandwidth of 800 GB per second. The e-commerce and technology giant said it had already delivered 560,000 Zhenwu units to more than 400 customers across 20 industries. The new chip could make Alibaba and its chip subsidiary T-Head more competitive in China's growing domestic AI processor market, which includes competitors like Huawei and Cambricon.
Nvidia to launch Singapore research hub as city-state boosts AI plans
Global artificial-intelligence chip leader Nvidia will launch a new research center in Singapore, one of a slew of new AI-related measures announced by the city-state on Wednesday. Nvidia's new lab represents its first Singapore research hub, and its second such presence in the Asia Pacific. The company has increasingly focused on embodied AI deployment in recent years, launching models, systems and chips for robotics. The new lab will focus on advancing embodied AI and increasing the efficiency of AI infrastructure, working alongside university researchers, industry partners, and government agencies. U.S.-based Nvidia's move comes as Singapore pitches itself as a regional AI hub, ideal for real-world development, testing and deployment of AI solutions, despite the city-state's relatively small size.
GM to start assembling Chevrolet Groove and Aveo in Mexico, in shift away from China
General Motors said on Tuesday it would start assembling the Chevrolet Groove and Aveo in Mexico for sale in the local market, although the company will continue to produce the car parts in China. The Detroit automaker has been exporting those vehicles and others to Mexico from China, where its sales have declined in recent years. The project, part of GM's previously announced $1 billion investment in the country, was made at an event with Mexico President Claudia Sheinbaum. GM will start assembling vehicles locally at its Ramos Arizpe plant to sell in Mexico in 2027, aiming for 80,000 vehicles a year by 2030. The Aveo ranks among the top sellers in Mexico and is GM's top-selling car in Mexico. GM sold more than 60,000 Aveos in Mexico in 2025 and sales are on pace to set another record this year. GM produces electric vehicles at the Ramos Arizpe plant. The company laid off 1,900 workers from the plant earlier this year citing weak U.S. demand.
Airbus targets 10% cost cuts over global uncertainty and supply snags
Europe's Airbus has ordered a fresh 10% reduction in most non-industrial spending as global uncertainty and supply chain problems continue to squeeze its core jetliner business, three industry sources said. The clampdown is aimed at the planemaking division and headquarters-related activities but will not affect production, they said. It has been in effect for several weeks and comes on top of a cost-saving project called LEAD launched in 2024. The new "cost containment" measure aims in particular to curb the use of external contractors, traditionally a key resource for the world's largest planemaker, the sources told Reuters. Toulouse-based Airbus declined to comment. The previously unreported move echoes efforts by Western companies to rein in spending in response to economic uncertainty and costs arising from the Iran war and wider trade tensions.
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