Middle East Risk Flares Again, Mixed AI-Spending Signals, Markets Await FOMC

In this briefing

• Ukraine's strike on Iranian vessels reignited Middle East escalation concerns; US jet fuel costs surged as a result.
• Google spent $490M/day on AI and posted its first negative cash-flow quarter ($5.9B burned) since going public, contrasting with $950B in new agreements signed at the Korea-US AI summit.
• Ahead of next week's FOMC meeting, the Fed is expected to hold rates (Citigroup forecasts a dovish outcome), while US economic data came in stronger than expected.
• United reportedly sought a merger with Delta before approaching American Airlines.
• Emerging markets diverged: Brazil's ETF assets nearly tripled in two years, while Russian stocks closed lower.

Desk Analysis

Contrasting AI-investment news was reported side by side today. Google spent an average of $490 million per day on AI and posted its first negative cash-flow quarter since going public, burning $5.9 billion in cash, while SK Hynix saw a widening price premium between its US ADR and Korean shares, prompting a bubble warning. The same day, the Korea-US AI summit produced roughly $950 billion in new AI agreements. In the Middle East, Ukraine's strike on Iranian vessels reignited escalation concerns, and US jet fuel costs surged as a result. Ahead of next week's FOMC meeting, the Fed is expected to hold rates, with Citigroup forecasting a dovish outcome; US economic data came in stronger than expected, keeping a higher-for-longer rate scenario in play.

For informational purposes only. Not investment advice.