The Pentagon is investigating a leak of classified documents that suggest the US spied on key allies, including Israel, Ukraine, and South Korea. The leak is being treated as a serious national security risk, and the search for the source of the leak continues. The documents reportedly reveal that Egyptian President Abdel Fattah al-Sisi ordered the production of 40,000 rockets for Moscow, potentially implicating Egypt in the sale of weapons to Russia. The US provides $4 billion a year in grant aid to Egypt, the majority of which is military aid. This revelation puts Egypt's relationship with the US and Europe at risk as they seek to uphold the international rules-based order, particularly in light of Russia's actions in Ukraine. 

EQUITY

The stock market ended mixed on Tuesday, with the Dow closing in positive territory, led by economically sensitive sectors such as industrials, materials, and transportation. The S&P 500 ended essentially unchanged, while tech and tech-adjacent megacap stocks pulled the Nasdaq to a lower close. Investors are cautiously looking ahead to Wednesday's crucial inflation data and the unofficial kick-off of the first-quarter reporting season.  

GOLD

Gold prices rose as safe-haven buying was triggered by the Fed's Neel Kashkari's warning of a potential recession this year. The prospect of a U.S. recession has boosted safe haven demand for gold, which has been on a tear since early March. 

OIL

Oil rallied on Tuesday amid talk of new OPEC+ production cuts. The run-up was aided by a moderate weakening in the dollar and a positive short-term energy outlook issued by the U.S. Energy Information Administration. Market participants were also awaiting the release of weekly U.S. inventory data, with analysts predicting a crude stockpile drop of 0.583M barrels.

CURRENCY

The US dollar fell as investors awaited inflation data to understand whether price pressures are easing and what it means for the Fed's policy. The Fed is expected to raise rates by 25 basis points in May before pausing in June, and the market predicts a rate cut by the end of the year due to an expected recession.