US politics and the world economy are both showing strain, a bad sign for markets and for anyone feeling the pinch of higher prices.

• The Justice Department is dropping its vandalism case against David Hearn over a White House reflecting pool, an embarrassing walk-back after a splashy press conference.
• Trump has ordered new strikes on Iran as that conflict hits six months, keeping oil and energy costs high.
• Inflation is the big worry: gas and grocery prices keep rising while wages lag, and workers from Korea to Japan are striking for higher pay.
• A $45 billion AI hedge fund run by Leopold Aschenbrenner blew up in days, a sign of how much the economy leans on AI hopes that may not pan out.
• The US and Japan made surprise moves to prop up the falling yen late Friday, exposing how fragile and interconnected global markets have become.

Outlook: With war driving up energy costs and shaky trades unwinding, expect more market stress and pressure on the Fed as inflation lingers.