The chip sector has become a macro theme, with Micron, Alphabet and Nvidia able to shift dynamics across asset classes. The PCE data is critical for the Fed's rate path, but the recent drop in oil prices is not yet fully priced in and could change the inflation outlook significantly.

The NGFS report discusses how increasing climate shocks will present difficult trade-offs for central banks between stabilizing inflation and output, similar to recent energy price shocks. Emerging markets are more vulnerable and less equipped to deal with these shocks. Droughts are the most inflationary climate events due to their broad impact on agriculture and food prices, while floods are more localized and deflationary.

NATO Secretary General Mark Rutte argued that President Trump's leadership has been successful in three ways: on Iran, on getting NATO allies to commit to and deliver on 5% defense spending, and on taking the mantle of leader of the free world. Europeans are taking over more leadership roles in combat commands over the next 18-24 months, moving from American to European generals and admirals.

Shipping is gradually returning through the Strait of Hormuz after the US-Iran peace deal, but the status of tolls remains uncertain. Oil markets have found workarounds and prices haven't spiked as expected. Demand destruction, especially in China's shift to cleaner fuels, is also pressuring prices lower. Any financial payments to Iran would create sanctions risk for shipping.

Micron beat top and bottom line, but more importantly guided that memory supply will remain tight for longer due to AI infrastructure demand, with gross margins above 80%. This has enormous valuation implications for Micron and peers like SK Hynix. The key debate is whether memory demand is cyclical or structural.

H&M reports Q2 earnings with consensus expecting roughly flat sales amid concerns about weak consumer sentiment and poor spring weather. Competition in fast fashion is brutal, with H&M squeezed between industry leader Zara (Inditex) and ultra-low cost rivals like Shein. The Persson family's increased share purchases have triggered speculation about a potential take-private.