Middle East Conflict Shakes Two Key Markets
Escalating tensions between the US and Iran are roiling global energy markets. The conflict has disrupted shipping through the Strait of Hormuz, a vital chokepoint for oil supply. As a result, WTI Crude Oil futures surged on prediction markets, with a key May 15 contract jumping to 88.5% probability of an increase, up from 50% just a day earlier.
At the same time, bets on Federal Reserve rate cuts in 2026 are fading. The main prediction market now shows only a 67% chance of any cuts, down from 72% the previous day. Analysts say the oil shock could force the Fed to prioritize inflation control over monetary easing.
What to Watch
Markets are now focused on ceasefire talks in the Middle East and any production changes by Saudi Arabia and Iran. Officials to watch include President Donald Trump, Fed Chair Jerome Powell, and OPEC leadership.