The tensions between the U.S. and Iran escalated this week following attacks on two oil tankers near the Strait of Hormuz – one owned by Japan and one owned by Norway. While the U.S. is claiming that Iran is responsible for the attacks, the evidence is unclear. U.S. photos suggest a mine was detonated while the workers aboard the Japanese tanker report seeing a torpedo prior to the explosion . Meanwhile, large protests erupted in Hong Kong following a proposed change in the law that would allow its citizens to be extradited to China in order to stand trial. The scale of the protests was sizable enough to gain a suspension in the bill’s progress toward an official vote.
Weaker than anticipated inflation data this week buoyed U.S. stocks with the anticipation that low inflation will provide the Fed with more evidence to cut its target rate this year. The domestic markets also responded favorably to the resolution of the tariff threats against Mexico. International stocks slid as the trade war with China dragged on and global tech stocks slumped on decreased order expectations. Bond prices held steady as rates maintained the low levels. Oil prices rose after the tanker attacks on Thursday but still ended the week lower than the prior week due to anticipated weaker global demand.
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