Welcome to Markets Desk, your midday read on what's moving markets and the macro landscape.
China's AI push is forcing a reckoning in Silicon Valley. Moonshot AI's Kimi K-three model has drawn such overwhelming demand that the company paused new subscriptions entirely, straining its GPU infrastructure. The debut has reignited the open-weight versus closed-source debate, with American AI leaders increasingly divided on how to respond to Beijing's strategy.
Turning to energy, oil has climbed back above ninety dollars a barrel after Iran struck tankers in the region, with the United States carrying out fresh retaliatory strikes. American casualties are rising, and the geopolitical premium is back in crude pricing. Traders are watching the Strait of Hormuz closely, as any further escalation threatens a meaningful supply disruption at a moment when inventories are already tight.
And on monetary policy, markets are bracing for a less communicative Federal Reserve. Kevin Warsh, the incoming Fed chair, has shown little appetite for the kind of forward guidance markets have grown dependent on. Hedge funds holding Treasuries are particularly exposed — without clear signals on the rate path, duration risk becomes harder to hedge and volatility in the long end could spike.
That's the tape. Markets Desk, signing off the floor.
