The intersection of Trump inflation Iran dynamics defined a turbulent trading day, as the president embraced a three-year high in consumer prices while escalating strikes against Iran sent oil climbing and stocks tumbling. The unusual spectacle of a leader celebrating rising inflation captured a moment where geopolitics, energy, and monetary policy collided.

A President Who ‘Loves’ Inflation

It’s rare for any president to applaud a jump in the inflation rate, yet that’s precisely what unfolded. U.S. consumer prices rose at an annual rate of 4.2 percent in May, prompting Trump to declare bluntly, “I love the inflation.” He predicted that prices would fall “like a rock” once the war with Iran comes to an end.

That war, however, is far from over. It has entered a second day of renewed hostilities, with Washington and Tehran now battling over the narrative around shipping traffic through the Strait of Hormuz even as they exchange strikes.

The Chain Reaction

The logic linking these events is straightforward. Hormuz is driving oil prices, oil is fueling inflation, and inflation has become the first significant test for newly installed Federal Reserve Chair Kevin Warsh. For Warsh, that challenge may prove to be a defining early moment of his tenure.

Markets, meanwhile, find themselves caught in a stress test, weighing Trump’s description of a war that’s “very complete” against strikes that keep landing. Adding to the drama, SpaceX’s highly anticipated IPO is poised to launch into the middle of this volatility.

Strikes Strain a Fragile Ceasefire

The U.S. began striking multiple targets in Iran overnight, with Central Command framing the action as a response to what it called Iran’s unwarranted and continued aggression. The strikes placed fresh pressure on an already brittle ceasefire.

Tensions had escalated after Washington’s retaliatory strikes followed the downing of a U.S. Apache helicopter near the Strait of Hormuz. Trump said Wednesday that the U.S. would hit Iran “hard again today,” while pressing Tehran to sign what he insists must be a “meaningful” deal.

A Secret Oil Operation Revealed

In a striking disclosure, Trump revealed a covert operation he said he ordered last month, in which the U.S. military helped 200 commercial ships and more than 100 million barrels of oil transit Hormuz. The claim aligns reasonably well with available data; JPMorgan estimated last week that roughly 2 million barrels per day may be moving through the strait on tankers with their transponders switched off.

The competing narratives grew sharper as Iran’s military command ordered the closure of the Strait of Hormuz to all vessels amid the rising tensions. U.S. CENTCOM countered directly, claiming in a post on X that commercial ships were continuing to move in and out of the strait that night.

Oil Climbs Higher

The renewed escalation pushed energy prices upward. U.S. crude oil futures for July rose 2.94 percent to $92.68 per barrel on Thursday, while Brent futures, the international benchmark, gained 2.52 percent to $95.45 per barrel for August delivery.

Inflation Meets a New Fed Chair

The May CPI report, the one Trump professed to love, was notable as the first since Kevin Warsh was sworn in as Fed chair. The data showed energy costs rippling through the broader economy, and market odds overwhelmingly favored the Fed holding its short-term rate steady.

Wall Street Stumbles

The combination of rising energy prices and hot inflation took a toll on equities. Wall Street stumbled Wednesday, with chip stocks selling off sharply and the Dow shedding more than 900 points. Stock futures slipped further overnight.

Oracle was a notable casualty, falling more than 10 percent in extended trading after announcing plans to raise an additional $20 billion to fund its AI buildout.

A More Optimistic View on AI

Amid the gloom, some voices struck a more hopeful note on the artificial intelligence boom. Thoma Bravo founder Orlando Bravo declared that the so-called “SaaSpocalypse” was over and argued that AI would serve as an enormous tailwind for companies. Private credit managers, including those at Ares and Man Group, similarly framed the moment as a reckoning rather than an outright wipeout.

A Historic IPO on the Horizon

Adding to the market’s nerves, SpaceX’s IPO is slated for this week and is expected to be the largest in history. It would also be the first of three mega AI listings, with OpenAI and Anthropic both having filed confidentially, setting the stage for a remarkable run of high-profile public offerings.

And Finally: Meta’s India Push

In a sign of the continued global race to build AI infrastructure, Meta announced Wednesday that it will lease an AI-enabled data center in India with 168 megawatts of capacity from billionaire Mukesh Ambani’s Reliance Industries.

Reliance, whose sprawling conglomerate spans petrochemicals, textiles, and mass media, will build the facility for Meta and deliver it within two years, with an option to scale further. Mark Zuckerberg said the world-class facility in Jamnagar would help Meta scale its AI infrastructure globally while deepening its long-term investment in India’s economy.

The Bottom Line

The day captured a strange convergence of forces: a president cheering inflation he expects to vanish, a war reshaping global oil flows, a new Fed chair facing an immediate trial, and markets bracing for both turmoil and one of the biggest IPOs ever. How these threads ultimately untangle will depend heavily on whether the conflict with Iran moves toward resolution or deeper escalation in the days ahead.