US stock futures tumbled on Friday, retreating from record highs as inflation worries preyed on markets while they weighed the outcomes of the Trump-Xi summit in China.

Contracts on the Nasdaq 100 (NQ=F) sank 1.6%, while those on the S&P 500 (ES=F) fell 1.1% after surging to all-time closing highs on Thursday. Dow Jones Industrial Average futures (YM=F) moved 0.7% lower.

On Friday, Trump concluded his visit with Xi in Beijing before flying back to Washington. His visit struck a business-friendly tone, with 16 top US executives accompanying him, and new deals for the likes of Boeing (BA) and Nvidia (NVDA). The diplomatic issues of Taiwan and Iran, however, continue to lurk in the background.

Hopes were that China could be enlisted to help the US exit its war on Iran by agreeing to use its influence with its major supplier of oil. While Trump signaled Beijing is ready to help — saying China and the US “feel very similar about Iran” — Xi struck a more measured tone.

The lack of progress toward peace has stoked concern about the price pressures of the conflict shown in this week’s US inflation readings. Benchmark 10-year Treasury yields (^TNX) have climbed ever higher above 4.5% amid a global bond rout.

On the corporate front, shares of Figma (FIG) jumped as investors cheered a late Thursday earnings report that signaled strong demand amid the AI boom. Mizuho Financial Group (MFG), RBC Bearings (RBC), and Sigma Lithium Corporation (SGML) are set to post results Friday.

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Global bonds tumble as flaring inflation spooks investors

Reuters reports:

The global bond market limped to the end of a bruising week on Friday, as growing evidence of economic ‌damage from the Iran war prompts investors to assume interest rates will ‌rise faster than expected and growth will suffer.

U.S. Treasury yields hit their highest since in around a year ​as traders anticipate the Federal Reserve may need to hike rates to rein in inflationary pressures stemming from Iran war-fuelled energy shocks.

German, Italian and French bonds came under fire in early European trading, while Japanese bond yields hit record highs.

… Inflation ⁠data this week has shown consumers and businesses are starting to see big increases in price pressures as a result of the war, which has pushed up the price of ​crude by ​over 50%.

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Asian shares fall despite optimism from Xi-Trump meeting

Reuters reports:

Asian shares dived on Friday as investor euphoria over tech stocks gave way to inflation fears that saw Treasury yields spike to one-year highs and rising bets on a U.S. rate hike this year.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2.3% and was set for a weekly loss of 1.8%.

Japan’s Nikkei (^N225) also dropped 1.8% as data showed the country’s wholesale inflation accelerated to 4.9% in April, the fastest pace in three years, leaving the Bank of Japan on track to raise interest rates.

South Korea’s KOSPI (^KS11) topped ​8,000 ​points for the first time and then crashed, falling by over 5%. China’s blue-chip eased ​0.6%, while Hong Kong’s Hang Seng (^HSI) index fell 1.4%.

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Oil on track for week of gains as Hormuz disruption continues

Bloomberg reports:

Oil headed for a weekly gain as the crucial Strait of Hormuz remains effectively closed, with efforts to end the war in limbo and disruptions that have upended global markets set to linger.

Brent (BZ=F) crude rose toward $107 a barrel, with futures up around 5% this week. West Texas Intermediate (CL=F) was near $102. A US naval blockade of Iran’s ports remains in place, while the waters in the region continue to be treacherous for mariners. A commercial vessel was seized by unauthorized personnel at the entrance to the strait and taken into Iranian waters.

US President Donald Trump met with Chinese leader Xi Jinping on Thursday, and the two discussed keeping Hormuz open to support energy trade, along with improving American oil flows to the Asian nation, according to a White House official. China’s official readout of the meeting did not include energy among the topics discussed, but it did say the Middle East was addressed.

The war has driven global oil inventories down at a record pace, and the market will remain “severely undersupplied” until October even if hostilities end next month, the International Energy Agency said this week. US data released on Tuesday underscored how the conflict is reigniting inflation, piling domestic pressure on Trump ahead of the midterm elections in November.

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