Market snapshot
Tuesday was the day the indices split, while the real story happened in the oil pit. The S&P 500 held at 7,770.06, adding just 0.07 percent, the Nasdaq rose 0.43 percent to 27,239.11, and the Dow Jones slid 0.36 percent to 51,863.84. On Monday the Nasdaq closed at a record 27,122.09, so Tuesday’s calm is not fatigue, it is waiting.
WTI crude fell another 2.67 percent to 89.90 dollars a barrel. That is the fifth straight losing session. On Monday the November Brent contract settled at 100.34 dollars after a 3.4 percent drop, while the October WTI contract, expiring Tuesday, collapsed 4.51 percent to 95.78 dollars. In one week the market stripped out of oil a war premium it had spent half a year building.
The reason is single and very specific. A senior Iranian official told Reuters on Tuesday that Tehran can reopen the Strait of Hormuz within seven days if Washington eases military pressure and lifts the blockade of Iranian ports. The condition is equally specific, the United States must first formally declare its intent to resolve the conflict diplomatically.
Gold held near 4,388 dollars an ounce, up 0.10 percent, while Trading Economics showed 4,307 dollars and a 0.81 percent decline the same day. The gap between sources is eighty dollars again, second day running. Bitcoin around 86,625 dollars, and the dollar index hangs at the 100.26 line, which is both the August 2024 peak and that same year’s lowest close.
Meta shares jumped 11 percent, after the company’s Muse artificial intelligence assistant climbed to the top of Apple’s app store. The Seven pulled the index up again, industrials weighed it down again.
Lithuania and the Baltics
The Seimas voted 99 to 13 to take the first step toward amending Article 137 of the Constitution, which would strip out the ban on weapons of mass destruction and foreign military bases. Five abstained, and changing the Constitution will require another vote. Deputy Defence Minister Karolis Aleksa says this is an enormous deterrence signal to Russia, and stresses that the amendment does not automatically bring nuclear weapons in, though a crisis or war would open the possibility of considering it. Remigijus Žemaitaitis calls it unnecessary and useful to Russian propaganda, while Ignas Vėgėlė asks why two separate bans were bundled into one vote.
President Gitanas Nausėda announced that a new rotation of roughly a thousand US troops is already on its way to Lithuania. Presidential spokesman Frederikas Jansonas added a few hours later that final confirmation from the Americans is still missing. One sentence about troops, another about the troops not being confirmed yet. That is the current timbre of the Vilnius and Washington relationship.
The Belarusian fertiliser file still has no text. The Presidential Palace says some clarity from the United States would be welcome, while US envoy to Minsk John Coale claims the deal on shipping potash to America has advanced considerably. Prime Minister Mindaugas Sinkevičius maintains that Lithuania received no request at all, and Kęstutis Budrys points out that no EU state can be part of such an arrangement today. Meanwhile Alexander Lukashenko says he simply has no potash to sell America this year. Four positions, one Klaipėda.
Lithuania is buying gun systems for naval vessel protection for 5.8 million euros, while the annual budget collection plan is already 66 percent fulfilled.
Latvia cut VAT on some food products, and Germany is sending four Eurofighter jets to the Lielvārde base for a week to guard Latvia’s elections against drone incidents. Election protection against flying objects is a new line item in Baltic budgets.
Europe
The European Union cannot decide on the Alisher Usmanov and Mikhail Fridman sanctions for a second day. France, Luxembourg and Slovakia are pushing to lift them, Paris even invokes national security, Latvia is blocking, and the deadline approaches. Volodymyr Zelensky publicly asked the EU to keep both on the list. Moscow raised the price in the meantime, with Dmitry Peskov demanding sanctions be lifted not for these two but for all Russian businessmen and citizens.
Hungary declined to join the Ukraine-led regional coalition, while the EU and the Philippines report a breakthrough in trade agreement talks. Lithuania supports finalising the 2028–2034 EU budget by year end.
Ukraine
Zelensky and Trump are meeting on the margins of the UN General Assembly. Trump said beforehand that he will press Kyiv on an energy truce, because Russia, in his words, has lost control of its diesel production, which drives prices worldwide. The Ukrainian delegation in New York has around twenty meetings scheduled and a drone agreement ready to sign.
On Sunday Ukraine launched more than a thousand drones at Russia, and Moscow’s mayor called it the largest attack on the capital, with a Moscow oil refinery damaged and a residential building hit. On Tuesday Russia shelled at least four Ukrainian regions with missiles and drones, killing five people, while Ukraine damaged another Russian refinery.
President Nausėda told the UN that Russia has essentially already lost the war, but its leadership will not allow itself to admit it. By his numbers, over the past year Russia seized 0.3 percent of Ukrainian territory and paid more than 400,000 killed and wounded soldiers for it.
Geopolitics
At the UN podium Trump framed the Iran question as a choice between two doors. Either a deal that would let Iran rebuild, or, in his words, the destruction of the Islamic Republic quickly and with no chance of recovery. He does not expect an agreement before the November midterms, after which, supposedly, it becomes inevitable. The war with Iran is in its seventh month.
Iran’s Revolutionary Guard announced the same day that it had rejected a US attempt at contact. On Sunday Iran’s military command warned that Washington, backed by regional states, was preparing to resume military operations, and threatened a response without limits. So on the very same day Tehran both offers Hormuz within seven days and refuses the conversation. Oil trades on the first message.
At UN headquarters Trump signed the US, Danish and Greenlandic Arctic security agreement. America gains the right to expand its military footprint in Greenland, Danish sovereignty officially remains untouched, and Copenhagen and Nuuk stress that Arctic security now rests on NATO’s shoulders rather than Washington’s and Copenhagen’s alone. In January the same president refused to rule out taking Greenland by force. Nine months from threat to signature.
Recep Tayyip Erdoğan condemned the attacks on commercial vessels in the Black Sea and is coordinating a grain corridor plan with Moscow and Kyiv. Turkey calculates it has lost around 20 billion dollars over three months from attacks on its merchant ships. Russia meanwhile imposed temporary night movement restrictions at the Estonian border.
Central banks
Gold was pressured on Tuesday by hawkish comments from Fed officials, which strengthened market expectations of another rate increase. On September 16 the Fed raised rates 25 basis points to 3.75 to 4.00 percent, the vote was twelve to nothing, and sixteen of eighteen participants in the projections see at least one more hike this year. Kevin Warsh submits no dot of his own, yet the market reads his speeches as guidance.
IPO radar
OpenAI filed its confidential S-1 on May 22, with the listing window considered open from September through November. Private value sits around 852 billion dollars, and a round is rumoured that would lift it to 1.2 trillion. Anthropic closed a 65 billion dollar round in May at a 965 billion valuation. Two entities whose value exceeds the annual budget of most NATO members, and nobody can buy the shares yet.
What to watch tomorrow
Whether Washington formally declares an intent to negotiate with Tehran. That declaration starts Iran’s seven-day Hormuz clock, and oil has already bought this scenario.
The outcome of the Trump and Zelensky meeting on an energy truce. If Kyiv agrees to stop hitting refineries, Russian diesel and global prices get a breath.
The EU decision on Usmanov and Fridman. One vote will show how much sanctions discipline is left in the Union when Paris says “national security”.
Whether Vilnius gets anything in writing about that thousand troops, and about the fertiliser. Both files run through the same Washington window.
Fed speeches. The market is hunting confirmation of one more hike, and gold and the dollar will react faster than equities.
The Bear’s take
The whole of Tuesday was about the price the market pays for a promise. Oil fell for a fifth day not because Hormuz opened, but because one unnamed Iranian official said it could open within seven days if somebody else takes the first step. That same day the Revolutionary Guard announced it had accepted no contact, and the president wondered aloud from the UN podium whether to destroy the Islamic Republic. Out of three signals the market picked the softest and wrote ten dollars off the barrel.
The same mechanism runs in Vilnius, just at a smaller scale. The president announces a thousand troops, and a few hours later it turns out there is no confirmation. The American envoy says the fertiliser deal has advanced, the prime minister replies he has seen no request, Lukashenko adds that he has no fertiliser. The Greenland agreement follows the same logic, only finished. In January there was a threat of force, in September a signature under which Denmark formally keeps sovereignty and America gets bases. The hegemon no longer asks for territory, it asks for access, and that is cheaper for both sides. The only question is what Vilnius holds that the same window will want next month.