Morning Brew May 18 2026

Good morning.

Markets stumbled into the weekend carrying a familiar weight: rising yields, sticky inflation fears, and a geopolitical backdrop that refuses to cooperate

US 10-year Treasuries punched through the psychologically important 4.50% level, settling at 4.59% and this morning 4.60 , while the 30-year hit its highest point since the Global Financial Crisis. Europe isn't spared — EU 10-years are at their highest since the Greek debt crisis of 2011, and UK gilts haven't been this stressed since 2009. The message from bond markets is blunt: Inflation is higher for longer

USD Index climbed to 99.33 for its best week in two months, dragging EURUSD down to 1.1620, Cable to 1.3320, and USDJPY all the way to 158.90

Beijing dropped a cold bucket of data on markets overnight. Industrial production came in at just 4.1% against an expectation of 5.9%, and retail sales barely moved — up 0.2% versus the 2% forecast. The consumer recovery narrative just took another hit.

Donald Trump's trip to China failed to generate either meaningful business headlines or visible progress on the US-Iran conflict, adding to the disappointment.

Tehran is reportedly preparing to offer a reopening of the Strait of Hormuz — but with a catch. Access would be limited to "cooperative nations" and subject to a transit fee. Translation: it's a geopolitical toll booth, not a peace gesture. Oil markets took notice, with Brent crude surging 4% above $109 and WTI trading at $107.2.

Margin loans in the US  have hit all-time highs both in nominal terms as well as percentage of GDP. That's a cocktail that works beautifully when stocks outrun yields. It gets explosive when they don't.

Semiconductors bore the brunt of Friday's selloff. The Philadelphia SE Semiconductor Index slid 4%, with Nvidia and AMD dropping 4.4% and 5.7% respectively, and Intel shedding 6.2%. Still, Nvidia remains up 36% from its March lows — so the question in the title isn't entirely rhetorical. The AI infrastructure story hasn't broken; it's just breathing.

Broader indices held up relatively better: the S&P 500 at 7,368, the Nasdaq 100 at 28,970, the Dow at 49,180. Germany continues to lag at 23,750.

Silver's move deserves a double-take. The white metal has cratered more than $10 from Wednesday's close, now trading at $75.10 — a sharp reversal that often signals either a broader risk-off shift or forced margin liquidation. Gold is holding firmer at $4,540, and Platinum sits at $1,970, but silver's industrial sensitivity makes its drop worth watching closely. Siler tested the important trendline Friday, a break below would signal further weakness.

Ford gave back 7.5% after a blistering two-session, 21% surge driven by excitement around its energy storage business . Samsung is bracing for potential strike action at its South Korean operations, with Seoul signalling it will pursue emergency arbitration if needed. And in a sign of the times, Mercedes confirmed it is open to producing military hardware "if financially sensible " as Europe's defence spending requitrement remains clear.

The bond market is doing the heavy lifting on sentiment right now, and it's lifting in the wrong direction. Nvidia can lead a rally, but it can it outrun a 5% 30-year yield forever?

Nvidia Earning Preview by Charu: 

• EPS and revenue: Can Nvidia still surprise after several quarters of exceptional growth?
• Data centre demand: Are Blackwell systems ramping strongly, and is there enough visibility around the next Rubin platform?
• Networking: AI data centres need faster connections between chips, servers and clusters, making networking an increasingly important growth driver.
• Margins and supply: Can Nvidia keep pricing power while scaling deliveries across chips, high-bandwidth memory, servers and networking systems?
• AI capex: Are hyperscalers still willing to spend aggressively, or is investor pressure to show returns starting to build?
• Guidance: The real market mover may be what Nvidia says about the next quarter and the FY2027 growth outlook.

Monday May 18

UK House Prices, China Retail Sales
Baidu

Tuesday May 19
Japan GDP, UK employment, Canada CPI,
Homedepot, Toll Borthers,

Wednesday May 20

UK CPI, EU Inflation,
Target, Lowes, Nvidia

Thursday May 21

Japan Trade, Global PMI
Nio, Walmart, John Deere, Zoom, Workday,

Friday May 22
Japan CPI, Germany GDP & IFO, UK Retail Sales, Canada Retail Sales

Monday May 25
Pentecost