Weekly Report 21/2026

Back and Forth

The ongoing back-and-forth surrounding the Strait of Hormuz caused energy prices to rise last week. On the spot market, a barrel of Brent crude oil cost between $103 (May 11) and $109 (May 15). These prices are in the middle range of all prices since the start of the Iran conflict. The positive aspect lies in the outlook. On the futures market—i.e., for deliveries in six months, for example—the price was recently significantly lower at $88. A de-escalation is therefore expected, even though this was clearly not a key topic at the summit between Xi Jinping and Donald Trump.

In any case, Trump’s state visit to Beijing ended with few tangible economic results. The agreements amounted to a fraction of what was decided more than eight years ago during his last visit to China. No agreements were announced regarding China’s industrial policy, the dramatic overcapacity, or export controls on rare earths, nor regarding military activities in Asia.

Clearly, Xi dictated the agenda, and the two sides agreed on “constructive strategic stability” “for the next three years and beyond.” Surprise sanctions, tariffs, or attacks must be prevented. The Chinese leadership’s goal was to at least outlast Trump’s term in office. Xi thus gains time, particularly regarding Taiwan policy, and very elegantly characterized the U.S. as a nation that may be in decline. Trump found no arguments to counter this.

When Trump began his return journey empty-handed, the markets were disappointed. Oil reserves are falling at a record pace, and new troubles loom at gas stations. Between 700 and 900 million barrels of oil and oil products are waiting in a tanker queue in the Strait of Hormuz for the green light. But the lights remain red. Bond markets were particularly sensitive last week because they fear interest rate hikes in response to rising inflation. Yields on 30-year U.S. Treasury bonds rose to 5.1% (the third-highest level since July 2007), prompting a negative reaction from stock markets as well. Yields on 10-year U.S. Treasury bonds recently stood at 4.6%, a significant 56 basis points higher than before the Iran war. Such high interest rates pose a risk to growth.

While losses on U.S. stock markets remained moderate, stock markets in Europe fell by around one percent in many places. The Swiss Market Index (SMI) ended last week slightly higher at 13’220 points (+0.7%). Amrize (-7%) fell to its lowest level in six months, and Swiss Life (-6%) is still searching for a solid foundation for a sustained recovery. In contrast, Zurich Insurance (+4%) impressed with its first-quarter report. Two other SMI heavyweights, Novartis and UBS (both +3%), helped lift the index.