Tuesday, May 26, 2026
[4:00 PM ET closing prices for stocks; 3:50ish for commodities and bonds]
Tale of the Tape at the gas pump, nationwide averages, courtesy of AAA.
Fri. Feb. 27…regular $2.98…diesel $3.75
Tues., May 26…reg. $4.49…diesel $5.58
Tensions rose Monday evening, after I posted my little update, as the U.S. sank two Islamic Revolutionary Guard Corps ships attempting to lay mines in the Strait of Hormuz. Iran responded by launching surface-to-air missiles at U.S. planes, prompting American attacks on missile launchers near Bandar Abbas.
And as President Trump sent conflicting messages about whether any progress had been made on a deal to end the war, Israeli Prime Minister Benjamin Netanyahu signaled Monday night that his country’s fight with Hezbollah would intensify, despite the American-brokered cease-fire that took effect in April. The fighting between the two has recently escalated, with Netanyahu, in a video statement on social media, saying Israeli forces had killed more than 600 Hezbollah militants in the past few weeks.
“But we are not removing our foot from the pedal,” Netanyahu said. “On the contrary, I said to press on the pedal even more.”
Stock markets seem convinced a peace deal will be reached. The main economic consequence of the war has been higher energy prices and therefore inflation, and indicators suggest prices will continue to rise even after an agreement.
Iran plans to reopen the Strait of Hormuz 30 days after a peace deal is reached, but that means the waterway – which normally carries around 20% of the world’s oil traffic – is unlikely to be fully open before July at the earliest. Meanwhile, Middle Eastern oil executives say it will take months for production to return to normal levels. All the time, the world’s oil deficit – the crude that would normally be produced and shipped which has been lost to the conflict – is mounting.
So, when I posted yesterday around 3:00 PM, WTI was $90.40, but it rose a few $s overnight and today as hopes for an interim agreement to reopen the Strait dimmed somewhat. And as I go to post, President Trump, who said of his physical at Walter Reed that “Everything checked out PERFECTLY,” hadn’t commented all day on any progress in negotiations.
Gasoline futures, on the other hand, after rallying about 8 cents today, suddenly fell to a new multi-week low of $3.20. As I said last time, the price at the pump is coming down by end of the week. [We’ll see if it’s just temporary.]
Regarding the Treasury market, as oil goes, so goes the bond market. The yield on the 10-year hit 4.67% as WTI was rising to $106, and it’s zero surprise that the yield has fallen to 4.49% with crude down $12-13 from the peak.
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On a different front, Russian Foreign Minister Sergei Lavrov, at the behest of President Vladimir Putin, called Secretary of State Rubio Monday to advise him to evacuate U.S. citizens and diplomats from Kyiv, as the Kremlin continues its heavy strikes on the capital.
Lavrov told Rubio that Russia is launching systematic and consistent strikes against facilities in Kyiv as well as against the relevant “decision-making centers,” according to a statement from the Russian Foreign Ministry.
Moscow is framing the retaliation for an attack in Russian-occupied Luhansk that Moscow claims killed 21 students, but Ukraine says it hit a major Russian drone factory.
In U.S. politics, we have a major Republican primary today, Tuesday, in Texas. Four-term Sen. John Cornyn against Texas Attorney General Ken Paxton, the latter endorsed by President Trump.
Go Sen. Cornyn!!!
And Go New York Knicks, after demolishing the Cavaliers Monday night, 130-93, completing another 4-game sweep, 11 straight wins overall.
The Knicks, of whom I’ve been a big fan since 1968, are headed to their first NBA Finals since 1999, as they also seek their first title since 1973!
They’ll square off against the Spurs or Thunder, who are playing Game 5 of their series tonight in Oklahoma City, knotted at 2-2.
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Dow Jones -118…- 0.2% [50461]
S&P 500 +45…+0.6% [7519…record]
Nasdaq +312…+1.2% [26656…record]
Oil (WTI) $93.65.…Brent $99.55
Gold $4505
Silver $76.95
Bitcoin $75,950 [4:00 PM ET]
U.S. 2-yr. 4.04%
U.S. 10-yr. 4.49%
Japanese 10-yr. 2.70%
Back Wed.
Brian Trumbore
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