NEED TO KNOW
IR Deal “largely negotiated”: Mediators are nearing a deal to extend the existing US-Iran ceasefire by 60 days, including frameworks for reopening the Strait of Hormuz, phased sanctions relief, and nuclear talks. Today Trump described the agreement as "largely negotiated”. A few days prior, on May 19, the US Senate advanced a War Powers Resolution with four Republicans (Rand Paul, Susan Collins, Lisa Murkowski, and Bill Cassidy) joining most Democrats. The resolution aims at forcing the Trump administration to end the war in Iran unless it receives congressional authorization to continue it, marking the first time such a measure progressed. The vote was just the first step toward full passage of the resolution, which the US President will most likely veto even if it does pass in both the Senate and the House, however Democrats see the effort as a way to force Republicans to take a stand on the war.
UKR Russia-Ukraine war escalation: Ukrainian strikes reportedly hit a student dormitory in the Russian-controlled Luhansk region, leaving 18 dead with many of the victims young women, according to Russian officials. In retaliation, Russia launched heavy attacks on Kiev and its surrounding region, killing at least four people and deploying a powerful hypersonic Oreshnik ballistic missile, which is capable of carrying nuclear or conventional warheads. France and Germany condemned Russia's use of the Oreshnik missile, with President Macron describing it as "a form of escalation”.
CU US indicts 94 year old Raúl Castro: The US has formally charged Cuba's former president Raúl Castro with murder over the 1996 downing of two planes resulting in the deaths of US nationals. Secretary of State Marco Rubio defended the move and claimed that Cuba poses a "national security threat" to the US and the likelihood of a peaceful agreement is "not high”. In response, the Cuban foreign minister accused the US of trying to "instigate a military aggression" and of "ruthlessly and systematically" attacking his country. Cuba is suffering from a fuel crisis exacerbated by an effective US oil blockade and it has been experiencing extended blackouts and food shortages over the last few months.
IS Sumud flotilla arrests and diplomatic fallout: Israeli forces intercepted the Global Sumud Flotilla, aiming to breach Israel’s maritime blockade of Gaza and deliver food and medical aid, boarding vessels and detaining hundreds of activists. Among them was Margaret Connolly, sister of Irish President Catherine Connolly. After deportation to their home countries, several detainees alleged mistreatment and abuse while in custody, though Israel denied the allegations. National Security Minister Ben-Gvir drew sharp international condemnation after releasing a video showing zip-tied and kneeling detainees, prompting Italian PM Meloni to demand an apology for the detainees’ treatment, while France went further by banning Ben-Gvir from entering the country. Poland also imposed a five-year entry ban, while Spain, Canada, the Netherlands, and Ireland condemned the Israeli Minister’s actions.
EU Free trade deal with Mexico: The EU and Mexico signed a long-delayed free trade agreement, aiming to deepen economic ties and reduce dependence on the US amid growing global trade tensions. The updated deal expands a Mexico-EU trade accord from 2000, which covered only industrial goods, and includes access for agricultural products, digital trade, energy, and public procurement, while also strengthening supply-chain cooperation. The pact still requires ratification by EU member states and the European Parliament before taking full effect.
US Consumer sentiment at all time low: US consumer sentiment fell for the third straight month to a reading of 44.8, an all-time low, from 48.2 earlier this month, according to the University of Michigan’s closely watched survey. Households reported increasing concern over rising prices, especially for essentials like fuel and groceries, despite relatively strong labor-market data. Separately, the FT reported that Americans have so far spent more than $41 billion in additional fuel costs since the outbreak of the Iran conflict. The figure exceeds the roughly $40 billion allocated under the federal bridge repair program and the $31.5 billion air traffic control overhaul, highlighting the trade-offs between military action and domestic infrastructure investment.
TUR Stock market crash, trading suspended: Trading on Turkey's Borsa Istanbul stock market was suspended on Thursday, after the BIST 100 index plunged around 6%, triggering a circuit breaker, while government bonds experienced their sharpest sell-off since late March. The market turmoil was triggered after a top court ruling removed the head of the main opposition party, Ozgur Ozel. The lira, which remains at record-lows, was relatively steady, but the US-traded iShares MSCI Turkey ETF fell nearly 10%, and 10-year Turkish bond yields climbed to record highs around 33%. Later in the week, President Erdogan also issued a decree revoking the operating license of Istanbul Bilgi University, a private liberal-leaning institution, eight months after its owner was seized by the state in a criminal investigation into alleged fraud and money laundering. The moves, framed by critics as power consolidation, heightened political risk concerns and the probability of early elections.
US Musk loses trial against OpenAI: On May 18, a federal jury in California unanimously ruled against Elon Musk in his high-profile lawsuit against OpenAI, Sam Altman, and Greg Brockman. The court did not address whether Musk’s claims of “breach of charitable trust” were valid, but the jury found that Musk filed his claims too late, and were therefore outside of the statute of limitations. Musk has vowed to appeal to the 9th Circuit Court of Appeals. The verdict comes at a critical time for both Altman and Musk, as they are preparing their companies highly anticipated and potentially record-breaking IPOs.
GOOD TO KNOW
South Korean retail investors borrow and liquidate savings to chase rally
South Korea’s stock market rally is increasingly being fueled by highly leveraged retail participation, with brokerages reporting a surge in margin lending as individual investors borrow heavily to chase gains in tech and AI-related shares. According to the Korea Times, brokerage profits have risen sharply because of increased interest income from these loans, reflecting a broader trend of households using debt to amplify equity exposure. This behavior is being driven by strong momentum in Korean equities, especially semiconductors, which has encouraged inexperienced investors to take on higher financial risk in hopes of quick returns.
There are also signs of speculative excess, including individuals taking out personal loans, cashing in insurance policies, and using credit to invest in the market during the rally. Savings bank deposits fell below 100 trillion ($66.24 billion) for the first time in four years, while commercial bank time deposits dropped by ₩12 trillion ($7.94 billion) since February. Insurance policy surrenders at the top three life insurers rose 16% in Q1, with savings-type policies up 23%, as households cash out, even at a loss, to chase higher returns.
Investors over 50 are driving much of this trend, now holding 62% of margin loans at major brokerages, with margin debt among those in their 60s doubling year-over-year. This retail frenzy has concentrated risk, as SK Hynix and Samsung now make up roughly 42% of the KOSPI. A related example of the speculative fever is a funeral services company, Bumo Sarang, that lost around $33 million of customer prepaid funds on a 2x leveraged BitMine ETF bet. Analysts have raised concerns about household leverage and potential losses if sentiment reverses.
NICE TO KNOW
US “Steroid Olympics” begin today: The inaugural “Enhanced Games” are scheduled to take place today, at a purpose-built venue in Las Vegas. Backed by Peter Thiel and Donald Trump Jr., the games explicitly allow athletes to use FDA-approved performance-enhancing drugs, including anabolic steroids, human growth hormone and stimulants like Adderall, that are banned by the World Anti-Doping Agency (WADA). The organizers claim their athletes are paid significantly higher compensation than the Olympics, with $250,000 offered for winning an event and $1 million for breaking world records, while critics argue the event normalizes dangerous doping practices and undermines sports ethics.
AI Google search taken over by AI: Google announced a major overhaul of its Search engine, effectively ending the traditional “blue link” result era in favor of an AI-powered conversational experience. The company introduced an intelligent AI search box (its biggest upgrade in over 25 years) that prioritizes AI-generated answers, follow-up chat capabilities, and autonomous AI agents that can perform tasks like monitoring events or handling complex queries. Traditional links remain available, but the focus shifts toward direct, synthesized responses powered by advanced Gemini models. This pivot raised concerns over reduced web traffic for publishers, but also over increased vulnerability to manipulation, as highlighted in a recent BBC investigation showing how easily AI Overviews can be corrupted with biased or false information.
SK Samsung stock surge after union deal: Samsung Electronics shares jumped more than 6% on Thursday after South Korea’s largest company reached a last-minute tentative wage agreement with its union averting a planned 18-day strike. The union represents nearly 48,000 workers and the averted strike had threatened to rattle global semiconductor supplies and South Korea’s trade-dependent economy.
AI Starbucks scraps AI inventory tool across North America: Starbucks has withdrawn its AI-powered inventory management tool across North America just 9 months after its deployment, after it repeatedly miscounted stock levels and misidentified items, leading to operational inefficiencies. The system was designed to automate tracking in stores and fix the coffee chain's persistent product shortages, but it instead reportedly produced inaccurate data that required staff to manually correct errors. The rollback highlights broader challenges companies face when deploying AI in real-world retail environments where messy data and complex workflows can reduce reliability.
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