On Tuesday, the S&P 500 notched a new intraday high at 7,539.8, with the index trading up 0.5% and remaining on track for a nine-week winning streak for the first time since 2023. The Nasdaq Composite also reached an intraday record as chip-linked names surged, while the Dow Jones Industrial Average fell 216 points, or 0.4%. Markets also weighed U.S.-Iran headlines after comments from President Donald Trump on Monday and U.S. strikes described as "self-defense" early Tuesday.

TD Cowen said the political backdrop for the crypto market-structure bill known as the Clarity Act has deteriorated, reducing the odds it becomes law this year. The bank's Washington Research Group cited a run of controversies tied to President Donald Trump that could push Democrats to demand conflict-of-interest provisions before offering support.

Wall Street banks are privately urging the Federal Reserve to give its lighter supervision approach stronger legal support so it can withstand future political shifts, including a possible Democratic administration. The push comes as the Fed reduces reliance on Matters Requiring Attention (MRAs), scales back bank exams, and considers changes to its confidential ratings process. Vice Chair for Supervision Michelle Bowman has also said she plans to cut supervision and regulation staff by about 30%.

The UK government sanctioned crypto exchange HTX on 26 May under its Russia sanctions framework, alleging it provided financial services connected to entities linked to the Russian economy. The measures include an asset freeze, director disqualification, trust services and correspondent banking restrictions, plus internet services sanctions aimed at limiting UK users' access to HTX-related services and apps. HTX had not issued a public response at the time of writing.

Bank of France Governor Francois Villeroy de Galhau said Tuesday in Singapore that the European Central Bank will "do what is necessary" to bring inflation back to its 2% target in the medium term. He pointed to euro zone inflation rising to 3% in April from 2.6% in March after having slipped to 1.9% before the Feb. 28 strikes on Iran, amid concerns over energy-driven price pressures.

Belarus has expanded its approved list of underlying assets for non-deliverable OTC instruments to include digital tokens such as cryptocurrencies, including Bitcoin. The change was set out in a joint resolution dated May 23 and published Tuesday, taking effect on Wednesday, May 27, and is expected to support broader integration of crypto into the country's financial system.

U.K. government bond yields fell to five-week lows on Tuesday, with the 10-year gilt at 4.85% and the 30-year easing to 5.552%. Markets steadied as political uncertainty around Prime Minister Keir Starmer appeared to soften and expectations for future rate hikes were pared back.

On May 26, Brent crude rose 2.5% to $99 per barrel in European trading as the U.S. military confirmed strikes in southern Iran that it said targeted vessels allegedly trying to deploy mines and missile launch positions. The Strait of Hormuz—through which roughly 20% of global oil supply, or about 20 million barrels per day, transits—returned to focus, while WTI July futures were down 4.1% at $92.79 versus Friday’s close after Monday’s Memorial Day holiday. The report also cited a $3 to $5 per barrel Hormuz risk premium and outlined potential impacts on U.S. energy producers’ free cash flow and capital returns.