Markets in the face of geopolitical tensions and inflation data

In the last 24 hours, President Donald Trump announced that the U.S. military conducted a secret mission supporting oil transport through the Strait of Hormuz. This action is part of a broader strategy aimed at securing energy supplies in the face of rising tensions with Iran. Trump also announced further strikes on Iran, which heightened concerns about a possible escalation of conflict in the region. The oil market reacted to this information, and actual oil inventories in the U.S. fell by 7.228 million barrels, which was significantly below forecasts.

Data on inflation in the USA published today showed an increase in the CPI index by 0.5% in May, which was in line with forecasts but still higher than in the previous month. Moreover, the Supercore CPI index, which excludes energy and food prices, rose by 3.67% year-on-year. Such data may suggest that inflation in the USA remains persistent. In response to this information, futures on short-term interest rates rose as investors reduced their bets on interest rate hikes by the Fed in the near future.

Fear & Greed Index, which measures investor sentiment, has dropped to a level of 28/100, indicating prevailing fear in the markets. A week ago, the index was at 53/100, suggesting a rapid increase in uncertainty among investors. The cause of this is both the escalation of geopolitical tensions and uncertainty regarding the Fed's future monetary policy in light of new inflation data.

Tensions in the Middle East and inflation data in the USA will be key factors influencing the markets in the coming days. Investors should pay attention to further actions by the USA in the region and the upcoming FOMC meeting, which will take place on June 17. Any signals regarding a change in the Fed's monetary policy could have a significant impact on market sentiment.