Headlines:Deal or no deal? Markets continue to eye US-Iran headlines ahead of the weekendJapan spent ¥11.7 trillion on foreign exchange interventions in the past monthJapan chief cabinet secretary says extremely concerned about speculative FX movesFed policymaker Schmid: My primary concern is inflation, which is too hotBOE governor Bailey: We have already tightened policy by taking rate cuts off the tableGerman states see slight drop in inflation pressures in MayFrench inflation continues to pick up in May, highest reading since February 2024Inflation pressures continue to hold up in Spain, core prices nudge a little higherItaly inflation continues to push up in May, core prices nudge higher as wellGerman unemployment falls unexpectedly in May, jobless rate down slightly as wellGerman import prices climb further in April as US-Iran conflict continues to reverberateMarkets:WTI crude down 1.7% to $87.40DAX up 0.1% while CAC 40 up 0.7% on the dayS&P 500 futures up 0.1%, Nasdaq futures up 0.1%US dollar lightly changed across the boardUS 10-year yields down 1.4 bps to 4.44%Gold higher by 0.8% to $4,530As we get into the final stretch of the week, the US and Iran are still yet to formalise a deal and sign off on the expected memorandum of understanding. This is one that has been “imminent” since the past weekend already. Yet, here we are.It seems like we are close but come what may, this doesn’t mean the end of the conflict – even if the deal is going to be labelled as such. Just a bit of background:How close are we actually to a US-Iran endgame?US and Iran know what the puzzle pieces are, but can they fit them all together?Still, markets remain hopeful and we’re seeing a steadier mood in European morning trade today.Oil prices are down once again with WTI crude lower by 1.7% to $87.40. That comes as equities are continuing to nudge up, with S&P 500 futures up 0.1% following another round of gains in Wall Street yesterday. In Europe, we’re seeing a steadier mood too with the DAX up 0.1% and CAC 40 up 0.7% today.Even though euro area inflation numbers are seen higher at the balance in May, bond yields are keeping down as US-Iran developments continue to override other elements at the moment. Besides Germany, price pressures were seen pushing up in France, Spain, and Italy.10-year yields in France are down 3 bps to 3.56% while 10-year yields in the US are down 1.4 bps to 4.44% currently.In FX, there wasn’t much action with the dollar holding steadier for the most part. EUR/USD is marginally lower around 1.1640 with large option expiries at 1.1650 keeping price action in check. Meanwhile, USD/JPY continues to keep around 159.20-30 levels even after Japan intervention data revealed a sizable amount spent by Tokyo officials in trying to pin down the currency pair during the past month.Besides that, gold prices are seen higher with the precious metal pushing up by 0.8% to $4,530 in keeping with the recovery since trading yesterday.It’s all now on whether we will see a US-Iran deal finally announced. And when the details come to surface, is it going to be a case of buy the rumour, sell the fact? This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight The ongoing US-Iran headlines are creating uncertainty, and here’s why that matters for traders right now: With Japan’s ¥11.7 trillion spent on foreign exchange interventions recently, it’s clear they’re trying to stabilize the yen amid speculative moves. This could lead to increased volatility in the forex markets, especially if traders react to any shifts in sentiment regarding US-Iran relations. If tensions escalate, we might see a flight to safe-haven currencies like the USD or CHF, while riskier assets could take a hit. Additionally, Fed policymaker Schmid’s focus on inflation suggests that the US dollar could strengthen if inflation data continues to surprise to the upside. Traders should keep an eye on the USD/JPY pair, as any significant moves could trigger stop-loss orders or attract new positions. On the flip side, if the situation with Iran de-escalates, we could see a rebound in risk assets, which might lead to a weakening of the dollar. Watch for key economic indicators next week, particularly any inflation reports that could influence Fed policy and market sentiment. 📮 Takeaway Monitor the USD/JPY pair closely; volatility is likely as geopolitical tensions and inflation data unfold next week.

Dell, AI spending, and the trillion-dollar question investors should understandDell Technologies just gave investors a live example of what the AI infrastructure boom looks like in financial statements.In its Q1 FY27 results, Dell was not rewarded simply because it sold more PCs or delivered a normal earnings beat. The stock exploded because investors increasingly see Dell as one of the companies directly benefiting from the massive AI infrastructure buildout taking place across the economy.This is where the story becomes much bigger than Dell alone.AI is not only a software theme. It is also a physical infrastructure theme. To run large AI models, train them, serve them, and integrate them into businesses, the world needs more servers, chips, networking equipment, storage, cooling, power, data centers, and related services.Dell is one of the companies enjoying that spending wave.But investors should also understand the other side of the story. A huge AI CapEx cycle can create real business growth, while also creating the risk of overbuilding, overvaluation, and circular market logic.That does not mean the AI boom is fake. It means investors need to understand what they are actually buying.What is AI CapEx?CapEx means capital expenditure. In plain English, it is money companies spend on long-term infrastructure, equipment, and assets.In the AI cycle, CapEx includes things like:AI serversGPUs and acceleratorsData centersNetworking equipmentPower infrastructureCooling systemsStorageFiber and connectivityCloud infrastructureWhen hyperscalers and large enterprises spend heavily on AI infrastructure, that spending becomes revenue for companies like Dell, Nvidia, Broadcom, Super Micro, Vertiv, power equipment providers, networking vendors, and many others.That is why investors care so much.AI spending is not only a future story. It is already showing up in revenue, earnings, guidance, order books, and stock prices.Why Dell is a good exampleDell’s latest earnings showed how powerful this cycle can be.The company is no longer being valued only as a traditional PC and enterprise hardware company. It is increasingly being viewed as an AI infrastructure supplier.The key point is simple: customers are ordering the physical equipment needed to build AI capacity.That is why Dell’s AI server revenue and AI order numbers mattered so much. Investors saw evidence that the AI infrastructure buildout is not just a marketing slogan. It is becoming real demand.For Dell, that is an opportunity.If companies, governments, and cloud providers keep spending aggressively on AI infrastructure, Dell can continue to benefit from server demand, enterprise relationships, supply-chain execution, and its ability to package AI infrastructure for large customers.But investors should avoid stopping the analysis there.The circularity problem: one company’s spending is another company’s revenueThe AI CapEx cycle can create a powerful feedback loop.Large technology companies spend billions on AI infrastructure. That spending becomes revenue for infrastructure suppliers. Those suppliers report stronger earnings. Their stocks rise. The market becomes more confident that AI spending is real. That confidence can encourage even more spending assumptions.The loop looks like this:Hyperscaler CapEx rises → AI infrastructure revenue rises → supplier earnings rise → share prices rise → investors price in more AI spending → companies feel pressure to keep investing.This can be bullish for a long time. But it also creates a risk.Part of the earnings growth across the AI supply chain may be driven by an investment cycle, not yet by fully proven end-user profitability.That distinction matters.If AI infrastructure spending keeps growing faster than the economic returns from AI applications, the market may eventually ask a harder question:Are companies spending because the returns are already obvious, or because they fear falling behind?The trillion-dollar AI questionA useful way to think about the current AI boom is this:The first stage was: Is AI real?The second stage was: Will large companies spend aggressively on AI?The third stage is: Will that spending produce enough durable return to justify the market valuation?We are now moving toward the third stage.The market already accepts that AI is real. It also accepts that hyperscalers and large enterprises are spending huge amounts of money. The debate is now shifting toward return on invested capital.In other words:Will the trillions of dollars being spent on AI infrastructure eventually produce enough profit, productivity, automation, customer value, and business transformation to justify the cost?That is the real investor question.AI is real, but it’s damn expensive (for now). More expensive than humans?AI can be powerful, but it is not free. Running advanced models can require expensive compute, electricity, engineering work, data infrastructure, software integration, and ongoing optimization.In some use cases, AI may produce enormous productivity gains. In others, the cost of tokens, infrastructure, implementation, and human oversight may reduce the economic benefit.For investors, the question is not whether AI can do impressive things. It clearly can.The question is whether the economics work at scale.If AI tools help companies reduce costs, increase revenue, improve decision-making, and automate expensive workflows, then the infrastructure spend can be justified.If AI adoption grows but remains too expensive relative to the value created, then some of today’s spending assumptions may eventually need to be revised lower.The opportunity for investorsThe opportunity is still significant.AI infrastructure is one of the largest investment cycles in modern markets. Companies that supply essential parts of that buildout may continue to benefit from strong demand.Potential winners can include:AI server suppliersSemiconductor companiesNetworking equipment providersData center operatorsPower infrastructure companiesCooling and electrical equipment suppliersCloud infrastructure providersSoftware companies that turn AI into practical business valueDell belongs in the first group. It is not the only AI winner, but its latest earnings showed that it is clearly participating in the infrastructure side of the boom.For investors, the most attractive opportunities may come from companies that can show:Real revenue growth from AI demandStrong order visibilityImproving marginsPositive cash flowDurable customer relationshipsAbility to scale supplyClear guidance upgradesEvidence that demand is not just temporary panic buyingThe threat for investorsThe threat is that markets may eventually overprice the cycle.Every major technology infrastructure boom tends to include some overspending. That does not mean the technology is unimportant. It means investors often extrapolate too much too quickly.The internet was real, but the dot-com bubble still happened.Energy demand was real, but expensive oil projects