The Berg Brief

The market is still pricing this as 50/50. It's not. Iran asked the US to pause Hormuz escorts. HEU transfer now "surprisingly open." One-page MOU term sheet is drafted. Countries don't ask for pauses when they're preparing to fight. Deal probability: 55% and rising. Oil below $84 tonight confirms it. 👀

Anthropic raises at a $900 billion valuation. Earlier today I asked: what if OpenAI becomes irrelevant? $900B says the market thinks Claude is the answer. Microsoft bet $135B on OpenAI. Google backed Anthropic. The AI model war just got a price tag. The moat isn’t AI. The moat is which AI wins. $MSFT $GOOGL $NVDA

Anthropic agrees terms of $30 billion funding deal at $900 billion valuation, per FT

Trump: “We’ll bomb Iran’s nuclear facilities again if they try to move uranium.” Iran deployed submarines to Hormuz tonight. China publicly warned Iran to stand down. Trump just drew the final red line. Sign the deal or face the consequence. There is no third option. The most binary trade in markets: Iran signs → $WTI drops to $85. Iran moves uranium → $WTI hits $120 and the IMF recession scenario goes live. $WTI $USO $XLE $SPY

#BREAKING: Trump warns “We’ll bomb Iran’s nuclear facilities again if they try to move uranium.”

@cb_doge Still can’t believe this meeting. Legendary.

Elon Musk, Jensen Huang and Tim Cook. Over $11 trillion in market cap in one picture.

Know the enemy: the bond market, 10Y at 4.50%, rate hikes now the base case. Know yourself: overleveraged, retail at 2021 euphoria levels, Shiller PE at Dot Com territory. Most traders this week knew neither. $TLT $SPY $GLD

“It’s like clockwork.” 10Y above 4.50% — same level that triggered Trump’s 90-day tariff pause in April 2025. Last time this happened, Trump blinked. This time: rate hikes are the base case. 30Y mortgage nearing 7%. Inflation at 3-year highs. Warsh walks in Monday. The bond market broke tariff policy in April 2025. What does it break in May 2026? $TLT $SPY $GLD $DXY

It's like clockwork. The 10Y Note Yield is now above 4.50% for the first time since June 2025. This is the same level that resulted in President Trump's "90-day tariff pause" in April 2025. Meanwhile, rate HIKES are now the base case for the Fed's expected next move. As a result, average rate on 30Y mortgage in the US is nearing 7% and inflation is at a fresh 3-year high. Seemingly overnight, "higher for longer" interest rate policy is back. How long can this last?

Trump drops $10B IRS lawsuit in exchange for a $1.7B fund to compensate allies targeted by the Biden administration. The political weaponization of the IRS is officially being settled — with taxpayer money. $1.7 billion. That’s the price of institutional trust in the tax system. Watch what this does to IRS enforcement appetite going forward. $SPY $DXY

Trump is expected to drop his $10 billion lawsuit against the Internal Revenue Service in exchange for the creation of a $1.7 billion fund to compensate allies who claim they were wrongfully targeted by the Biden administration, per ABC

Iran deploys submarines to Hormuz. China responds within the hour: “The war should not continue.” “China will contribute to Middle East peace.” “Solve Iran nuclear issue through dialogue.” “Ensure global supply chain stability.” Xi just publicly warned Iran — in front of the whole world. The submarines are a bluff. China called it. $WTI $USO $XLE $SPY

*CHINA SAYS THE WAR SHOULD NOT CONTINUE *CHINA TO CONTRIBUTE TO MIDDLE EAST PEACE: MOFA *CHINA URGES TO SOLVE IRAN NUCLEAR ISSUE THROUGH DIALOGUE *CHINA CALLS FOR ENSURING GLOBAL SUPPLY CHAIN STABILITY

Hours after Trump says “not much more patient” on Iran — Iran deploys Ghadir-class submarines to Hormuz. Calls them “invisible guardians.” Xi brokered the open strait. 30 ships cleared. Trump offered the closing terms. And Iran just sent submarines. This is either a last negotiating move — or a provocation that ends the deal. $WTI doesn’t stay calm if it’s the latter. $WTI $USO $XLE

Iran has reprotedly deployed Ghadir-class "mini" submarines to the Strait of Hormuz, declaring them an "invisible guardian" to enforce control over the vital waterway, according to Iranian state-linked reports.

The yen carry trade unwinding is a double-edged sword for AI stocks. Short term: forced selling hits everything including $NVDA and $QQQ — that’s the 2024 August playbook. Long term: if Japan yields normalize and the carry trade fully unwinds, the liquidity that was funding leveraged AI bets has to find a new home — or disappear entirely. A double from here requires the carry trade to stay intact, not go away. $NVDA $QQQ $TLT

@TheBergBrief @zerohedge How much higher do AI stocks trade if yen carry trade goes away? Can we get another double?

Japanese bond yields exploding higher *JAPAN’S 40-YEAR YIELD RISES 5BPS TO 4.2% *JAPAN’S 10-YEAR YIELD RISES 7BPS TO 2.7% *JAPAN’S 5-YEAR YIELD RISES 5BPS TO 1.995% *JAPAN'S NIKKEI INDEX FALLS 1% TO 62,004.64

Trump just named the terms: Iran’s enriched uranium gets entombed or handed over. This isn’t a threat. It’s a closing offer. Xi cut off military support. Iran is at 10% capability. Hormuz is open. Trump is “not much more patient.” Iran has nothing left to negotiate with — and Trump just told them what signing looks like. The deal is closer than markets think. $WTI $USO $XLE

*TRUMP: ENRICHED URANIUM CAN BE ENTOMBED, WOULD RATHER GET IT

Trump on Iran: “I’m not going to be much more patient.” Translation for oil traders: sign the deal or the 10% military capability Iran has left becomes 0%. Xi brokered Hormuz. Vance said progress. The clock just got louder. $WTI spikes if talks collapse. $WTI drops if Iran signs. The most binary trade in markets right now. $WTI $USO $XLE

NOW - Trump on Iran: "I'm not going to be much more patient."

India just hiked petrol and diesel prices by ₹3/liter. The world’s most populous country is feeling $102 oil at the pump. US exporting record oil. SPR at lowest since 2024. Iran deal not signed yet. The energy price shock isn’t staying in futures markets — it’s hitting 1.4 billion people’s daily lives. $WTI $USO $XLE

*INDIAN STATE RETAILERS HIKE PETROL, DIESEL PRICES BY INR3/LITER

Trump: “We don’t need Hormuz open.” Also this week: SPR down 31 million barrels in 7 weeks — lowest since October 2024 Largest weekly drawdown on record Half of all SPR additions since 2023 — wiped out US crude exports at 5.5M barrels/day — 2nd highest ever America IS energy independent. And the world is draining us to prove it. The SPR buffer that protects against a supply shock is disappearing fast. If the Iran deal falls apart — there’s no cushion left. $WTI $USO $XLE

US oil reserves are falling at a record pace: The Strategic Petroleum Reserve (SPR) dropped -8.6 million barrels last week, the largest weekly drawdown on record, per Zerohedge. This marks the 7th consecutive weekly decline, the longest streak since 2023. Over this period, US oil reserves in the SPR have dropped -31 million barrels, to 384 million, the lowest since October 2024. This wipes out nearly half of all the oil added to the SPR between July 2023 and March 2026. Meanwhile, US crude oil exports jumped +742,000 barrels last week, to 5.5 million barrels per day, the 2nd-highest in at least 3 years, after a record 6.5 million barrels per day 2 weeks prior. The world is scrambling for American oil.

@arspudbuster @zerohedge Valid take! Will be interesting to see how this plays out.

@TheBergBrief @zerohedge US energy independence is an urban myth. NatGas sure, but not for heavy crude which it must import

*TRUMP: WE DON'T NEED STRAIT OF HORMUZ OPEN

@JohnfromWNY @unusual_whales Great point! Make it make sense…

@TheBergBrief @unusual_whales Toyota is going more in on EVs with 2 new models this year. And also posted a loss in the US market for 2025 with a $13B investment in a battery factory and $1B in development costs of the highlander EV

Japanese car giant Honda made its first annual loss in 70 years as its investments in the electric vehicle market failed to pay off, per BBC

Contrarian take on $MSFT and OpenAI: Yes, Apple straining its OpenAI deal is short-term bullish for Microsoft. But the real question nobody is asking — what if OpenAI becomes irrelevant? Gemini. Claude. Llama. Grok. All closing the gap fast. Microsoft bet $135B on one model staying on top. If open-source wins the AI race — that bet doesn’t look the same. The moat isn’t the partnership. The moat is whether OpenAI keeps winning. $MSFT $AAPL $GOOGL

Apple’s OpenAI partnership is strained — legal battle possible. Microsoft’s OpenAI partnership: $135B stake, IP rights through 2032, Azure as the exclusive cloud backbone. While $AAPL fights over the relationship — $MSFT owns it. Every crack in the Apple-OpenAI deal is a Microsoft moat getting wider. $MSFT $AAPL $NVDA

Apple's, $AAPL, two-year-old partnership with OpenAI has become strained, per Bloomberg, with a legal battle possible.

Nearly half of US Strategic Petroleum Reserve releases are being exported. Let that sink in. America is draining its emergency reserve — and sending half of it overseas — while domestic gas prices remain elevated. Record SPR drawdown. $102 oil. Iran at 10% capability. IMF warning $120 breaks the global economy. The SPR was built for American emergencies. It’s now a global supply patch. If the Iran deal doesn’t close — there’s no buffer left. $WTI $USO $XLE

Nearly half of the crude oil released from the US Strategic Petroleum Reserve is being exported, a fresh sign of how severely global supplies have tightened amid the Iran war, per Bloomberg.