The S&P 500 fell 2.6% on Friday. Brent crude pushed above $97 per barrel. The VIX jumped 39.7% to 21.51 [1]. Three numbers. One story: banks are pricing the war into every asset class simultaneously.

The S&P decline was driven by a technology selloff after Broadcom's results failed to meet elevated expectations, but the oil spike and the volatility surge came from a different source. Israel struck several military targets in Iran on Friday, retaliating after Iran launched missile barrages — the most serious test of the April 8 ceasefire [1]. The Strait of Hormuz remains effectively closed.

For consumers, the convergence means inflation data arriving this week — CPI on Wednesday, PPI later — will reflect war-priced energy costs layered onto an already strong labor market. The U.S. added 172,000 jobs in May, beating the 85,000 forecast. Unemployment held at 4.3% [1]. The jobs report reinforced expectations that the Federal Reserve may need to keep rates higher for longer.

Saxo Bank's market analysis identifies the three-line convergence as the critical risk: "The key question for Monday is whether Friday's selloff was a healthy correction or the start of a deeper pullback, with markets likely taking their next cue from inflation data and geopolitical headlines" [1].

The inflation narrative is no longer about supply chains or pandemic aftershocks. It is about a war that has removed roughly 10 million barrels per day from global oil markets and a Strait of Hormuz that remains contested [2]. Every consumer price report from here forward carries a war premium.

-- CHARLES ASHFORD, London