Edward Meir's week in review and thoughts for the week of May 11, 2026

There was no mention of the Iranian missile program or the country’s support for proxies. Presumably these issues will be discussed later. However, Iran did not confirm the basic outline of this tentative agreement. Neither did the Trump administration.

But the report was enough to sink crude oil prices on Monday. Brent fell about $10 per barrel (bbl) at one point before closing down by about $7/bbl on the week. WTI lost a similar amount. We saw $0.10/gallon and $0.24/gallon declines in gasoline and diesel futures as well (off by 3% and 6.5% on the week, respectively).

Apart from Axios, Reuters also cited Saudi news sources as saying that a preliminary agreement was indeed reached between Iran and the US. And an Israeli news channel reported Iran had agreed to transfer its enriched uranium to a third country. By week’s end, none of this was confirmed by either party. And we are skeptical about its veracity given the complexity of the issues at hand.

However, we do know there apparently is some sort of a US proposal that has been made to Iran and that Washington is waiting for a response. An answer was supposed to come on Thursday, then Friday. But so far, we have heard nothing.

Meanwhile, there was another firefight in the Persian Gulf on Thursday. But it did not result in the ceasefire breaking down. Neither did it turn crude prices higher. The Iranians said US forces targeted an oil tanker and another ship while carrying out attacks on civilian areas on one of its islands. Iran apparently responded by attacking US military vessels and causing “significant damage.” But US Central Command denied the report.

Both sides were careful not to escalate things. Iran noted later in the day that the situation in the Gulf was now “back to normal.” For his part, President Trump said he saw the ceasefire holding. Needless to say, transit in and out of the Gulf remains at a standstill.

Equities

The crude markets are apparently looking past the conflict (rightly or wrongly). So is the US equity market. Stocks turned in another strong showing last week, pushing deeper into record territory. For the week, the S&P 500 ended up by 2.3%. NASDAQ tacked on 4.5% as semiconductor and mega-cap technology stocks resumed their leadership role. The Dow was the worst performer, up by only 0.2% on the week. Among individual sectors, the decline in oil prices pressured the energy sector (down 5.4 % on the week). Safe-haven utilities and financials also lost ground.

Base and precious metals

In the base metals markets, we had a mixed showing. Tin did best, adding almost 10% on the week on concern about lagging supply.

Copper was next, gaining about 4.5% on news that Indonesia Grasberg posted another delay to its production schedule. The facility is now expected to resume full operations in 2028. Earlier guidance called for a 2027 restart.  A press release put out by Grasberg’s CEO noted that “operations are currently in the recovery phase following the underground mine incident, with production currently at around 40% to 50%.”

Zinc ended nearly 3% higher on the week on very little news. Aluminum and lead each lost less than 1%. Nickel fell back by 2.4% to settle at just below $19,000/ton. Nevertheless, the complex has had an impressive showing over the last six weeks as the war in the Middle East continues to restrict exports of sulfur and sulfuric acid, both essential inputs for nickel HPAL production as well as SX-EW copper.

The general dollar index lost ground last week, not unusual when tensions in the Persian Gulf recede. Dollar weakness gave the precious metals complex a lift. Gold ended up 1.9% on the week, followed by a 5.8% and 7.4% gain for silver and palladium, respectively. Platinum tacked on 4%.

Treasury markets

Conditions in the US treasury markets were calm. Two-year yields ended up by about two basis points on the week. The 10-year lost one basis point to finish the week at 4.38%.

We will see what happens this week as President Trump heads off to China. It remains to be seen if he decides to fast-track or compromise on some proposals to get at least some of the conflict behind him.

But we think he will hold his ground. In our view, this conflict is likely going to last much longer than what the markets are expecting.

 Macro readings and other news from the past week

• The main macro report out last week was the April nonfarm numbers, which showed a 115,000 increase in payrolls, well ahead of the 67,000 expected. Just as importantly, the March increase of 178,000 was revised upwards to 185,000, avoiding the downward revision common in prior reports. The April unemployment rate was unchanged at 4.3%. Average hourly earnings rose by 0.2%, similar to March. Hourly earnings are now running at 3.6% year on year (y/y), which leaves purchasing power up by just 0.3% in real terms when pitted against the latest CPI report. As one research group we follow noted, “This doesn’t provide a lot of discretionary spending cushion without taking on debt or dipping into savings.”

• In fact, proof of consumers tapping into their credit lines was reflected in last week’s March consumer credit report. Here, we learned that credit rose by $24.9 billion month over month (m/m). That’s well above the $12.5 billion expected and marks the largest increase in a year. There were increases in both revolving and nonrevolving credit, which indicates consumers are turning to credit cards to pay for basic needs.

• The Michigan consumer sentiment index for May dropped to 48.2 from 49.8 for April and clocked in at a record low. For the same period a year ago, the index stood at 52.2. Consumers are clearly concerned about rising costs and their ability to out-earn inflation.

• Other jobs data showed that job openings rose to 6.886 million in March, down from 6.922 million in February. The ADP private payroll number for April also came in at 109,000, well ahead of the 79,000 expected. Weekly initial claims remain calm, hovering around 200,000 for the last few weeks.

• March factory orders rose by 1.5% m/m ( consensus 0.5%) driven by a big increase (3.4%) in new orders for nondefense capital goods, excluding aircraft.

• The April ISM services index came in at 53.6%, slightly below the 54% reading from the month before, but solidly in growth territory. However, subcomponents showed contracting employment and rising input prices.

• March new home sales came in at 682,000 from a prior reading of 635,000. The bulk of the increase was in lower-priced homes, which drove down average selling prices. But at the same time, the median price of a new home also fell. Altogether, pricing indications reflect some improved prospects for buyers. Separately, the MBA mortgage applications fell by 4.4% last week, adding to the previous week’s 1.6% decline.

• US steel industry groups addressed Congressional sub-committees last week to argue that global excess capacity remains a threat to domestic producers. The associations cited OECD estimates that global excess steel capacity is projected at 640 million tons per year in 2025 and 721 million tons per year by 2027. (Note these are capacity numbers and not actual production.) The steel lobbyists want Congress to consider Section 301 duties on both upstream and downstream steel and downstream products, with the EU and China being specific targets.

• China’s Tsingshan Holding has applied for its aluminum from its Hua Chin smelting joint venture in Indonesia to be deliverable on the LME, Reuters reports. If accepted, Hua Chin metal would follow Huafon Group aluminum to become the second Indonesian high-grade primary aluminum brand listed. The Hua Chin facility started up this year and has a projected annual capacity of 480,000 metric tons.

• The International Tin Association has global mined tin supply rising by 8.7% in 2026 y/y. Refined output is expected to increase by 2.7%. The ITA has global consumption falling by 0.7% this year (which we have trouble seeing).

This week’s US macro readings

On Monday, we get April existing home sales (expected at 4.1 million, last 4 million).

Tuesday brings us April CPI (expected at 0.6%, last 0.9% m/m), with the annual y/y increase forecast at 3.8% (from 3.3%). Core CPI is expected to come in at (0.3%, last 0.2%), while the y/y readings are forecast to increase to 2.7% (from 2.6%).

Wednesday brings us the April producer price index (expected at 0.6%, last 0.5% m/m), with the core expected to increase to 0.3% (from 0.2%).

US retail sales come out Thursday (expected at 0.5%, last 1.7%), while the ex-autos number is forecast to come in at 0.6% (last 1.9%). Weekly initial claims are also out Thursday (expected at 205,000, last 200,00).

Friday brings us the Empire State Manufacturing survey (expected at 6.5, last 11) along with April industrial production (expected at 0.2%, last -0.5%).

We wish all our readers all the best for the upcoming week.