Stocks Set for Muted Open as Oil Rises After Trump Rejects Iran’s Response to Peace Proposal, U.S. Inflation Data Awaited

June S&P 500 E-Mini futures (ESM26) are down -0.03%, and June Nasdaq 100 E-Mini futures (NQM26) are down -0.04% this morning, pointing to a muted open on Wall Street as oil prices and bond yields climbed after U.S. President Donald Trump slammed Iran’s response to a U.S. peace proposal.

President Trump said in a social media post on Sunday that Iran’s response to the U.S. proposal to end the war was unacceptable. “I have just read the response from Iran’s so-called “Representatives.” I don’t like it — TOTALLY UNACCEPTABLE!” Trump wrote. Bloomberg reported on Monday that Tehran called for the removal of the U.S. naval blockade and sanctions relief, while retaining some control over traffic through the Strait of Hormuz. Iran also insisted that any agreement must lead to an immediate end to hostilities, including in Lebanon.

The price of WTI crude rose over +2% on Monday as Trump’s rejection effectively extended the closure of the Strait of Hormuz. Higher oil prices fueled inflation worries and weighed on bonds, with the 10-year T-note yield climbing three basis points to 4.39%.

This week, market participants look ahead to the release of key U.S. inflation data, comments from Federal Reserve officials, and a meeting between Chinese leader Xi Jinping and U.S. President Donald Trump.

In Friday’s trading session, Wall Street’s major equity averages ended in the green, with the S&P 500 and Nasdaq 100 notching new record highs. Akamai Technologies (AKAM) soared over +26% and was the top percentage gainer on the S&P 500 after announcing that a leading frontier AI model provider had agreed to pay $1.8 billion over seven years for its Cloud Infrastructure Services. Also, chip and AI-infrastructure stocks rallied, with Sandisk (SNDK) jumping over +16% to lead gainers in the Nasdaq 100 and Micron Technology (MU) surging more than +15%. In addition, Rocket Lab (RKLB) popped over +34% after the space launch services and technology provider reported better-than-expected Q1 results and issued above-consensus Q2 revenue guidance. On the bearish side, Mettler-Toledo International (MTD) cratered more than -14% and was the top percentage loser on the S&P 500 after the company provided disappointing Q2 adjusted EPS guidance.

The Labor Department’s report released on Friday showed that nonfarm payrolls rose by 115K in April, well above expectations of 65K. Also, the U.S. April unemployment rate stayed unchanged at 4.3%, in line with expectations. In addition, U.S. April average hourly earnings rose +0.2% m/m and +3.6% y/y, weaker than expectations of +0.3% m/m and +3.8% y/y. At the same time, the University of Michigan’s preliminary U.S. consumer sentiment index fell to a record low of 48.2 in May, weaker than expectations of 49.7.

“The economy is so much better than what the doom crew has been saying. There are a lot of headwinds–higher oil prices, sticky inflation, and higher-for-longer interest rates–and yet the labor market is adding jobs,” said Chris Zaccarelli at Northlight Asset Management.

Chicago Fed President Austan Goolsbee said on Friday that all options on interest rates remain on the table at this point. “I don’t see how you can look at the current situation and, at least to me, view that the only thing that’s on the table conceivably are rate cuts,” Goolsbee said.

U.S. rate futures have priced in a 93.6% probability of no rate change and a 6.4% chance of a 25 basis point rate cut at the next FOMC meeting in June.

The U.S. consumer inflation report for April will be the main highlight this week, providing the latest snapshot of how the Middle East conflict is lifting prices. Economists project a sharp +0.6% m/m increase in the consumer price index, largely driven by higher gasoline prices stemming from the conflict. That follows March’s largest monthly increase since 2022. Meanwhile, the U.S. April Producer Price Index will offer insight into pipeline inflationary pressures. U.S. Retail Sales data for April will also attract attention, helping to gauge the impact of higher gas prices on retail spending momentum. Other noteworthy data releases include Initial Jobless Claims, the Export Price Index, the Import Price Index, Industrial Production, Manufacturing Production, and the Empire State Manufacturing Index.

Market watchers will also pay close attention to speeches from Fed officials for clues on how concerned they are about price pressures. With inflation drifting up due to the impact of tariffs and the Iran war, there’s an ongoing debate among policymakers about when and how to shift toward a neutral bias that implies a rate hike could be just as likely as a rate cut. Fed Governor Michael Barr, New York Fed President John Williams, Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, Minneapolis Fed President Neel Kashkari, Kansas City Fed President Jeff Schmid, and Cleveland Fed President Beth Hammack are scheduled to speak this week.

First-quarter corporate earnings season is winding down, but several notable companies are due to report this week, including Applied Materials (AMAT), Cisco Systems (CSCO), Constellation Energy (CEG), Oklo Inc. (OKLO), and Nebius Group (NBIS). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +12% increase in quarterly earnings for Q1 compared to the previous year, marking the sixth consecutive quarter of double-digit growth.

Meanwhile, investor focus will also center on U.S. President Donald Trump’s trip to Beijing for a high-stakes summit with counterpart Xi Jinping, with the Iran war and tariffs expected to be key topics.

Elsewhere, Kevin Warsh is expected to be confirmed as chair of the Fed by the U.S. Senate, just as Jerome Powell’s term as Fed chair comes to an end on Friday.

Today, investors will focus on the National Association of Realtors’ existing home sales data, set to be released in a couple of hours. Economists foresee this figure coming in at 4.05 million in April, compared to 3.98 million in March.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.39%, up +0.67%.

The Euro Stoxx 50 Index is down -0.07% this morning, kicking off the week on a cautious note after the U.S. and Iran failed to agree on terms to end the war. Defense stocks led the declines on Monday. Luxury stocks also slid. Limiting losses, telecommunication stocks advanced. In addition, energy stocks rose on the back of higher oil prices. Meanwhile, Eurozone government bond yields rose on Monday after President Trump rejected Iran’s response to a U.S. peace proposal, sending oil prices higher and heightening concerns that an oil-driven inflation shock could prompt rate hikes from the European Central Bank. ECB Vice President Luis de Guindos told the Financial Times in an interview published on Monday that the central bank should be cautious when weighing interest rate hikes, as the full impact of the Middle East conflict on economic growth has yet to be felt. At the same time, ECB Governing Council member Martin Kocher told the Neue Zürcher Zeitung newspaper that the central bank will have to adjust interest rates soon if the inflation outlook does not improve significantly. Investor focus this week is on the final April inflation readings from Germany, France, Spain, and Italy. Germany’s ZEW index of investor sentiment for May and a second estimate of first-quarter Eurozone GDP will also draw attention. In addition, Eurozone industrial production data for March will provide the first broad indication of how manufacturing performed during the first month of the conflict. In corporate news, Delivery Hero (DHER.D.DX) climbed over +8% after Dutch technology investor Prosus sold a 5% stake in the company to activist investor Aspex Management for about 335 million euros ($393 million).

The European economic data slate is empty on Monday.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.08%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.47%.

China’s Shanghai Composite Index closed higher and hit a near 11-year high today, buoyed by a tech rally and solid trade data. Semiconductor and other AI-related stocks jumped on Monday as investors doubled down on the AI trade, brushing off Middle East tensions even after U.S. President Donald Trump rejected Iran’s latest peace proposal. Shares of AI chipmaker Montage Technology popped more than +18% as the global AI infrastructure buildout accelerates. “Growing global AI computing demand will continue lifting semiconductor-related exports going forward,” with China’s manufacturing cost advantage becoming increasingly pronounced, according to analysts at CITIC Securities. Data from the National Bureau of Statistics released on Monday showed that China’s producer prices rose for a second consecutive month in April and reached a 45-month high as the fallout from the Middle East conflict sharply drove up costs. Consumer inflation also picked up last month, but against a backdrop of soft domestic demand and concerns over overcapacity, doubts remain about whether the economy will see real reflation. Separately, data released over the weekend showed that China’s export growth picked up in April after a brief slowdown in March, as factories rushed to fulfill a surge in overseas orders from buyers looking to stockpile components amid fears the Middle East conflict could drive global input costs even higher. Meanwhile, Barclays economists said on Monday that China’s two-speed economy—robust exports versus sluggish domestic demand—is likely to persist this year. Investor attention is now squarely on U.S. President Donald Trump’s visit to China, where he is scheduled to meet Chinese leader Xi Jinping. China announced that President Trump will make a state visit from May 13th to 15th, according to the official Xinhua news agency. “The war in Iran will be on the agenda also when Trump is set to meet Xi Jinping in Beijing over Thursday and Friday, alongside at least tariffs, tech, rare earths and agricultural purchases, though we do not expect major ‘deals’ on any front,” said Danske Bank’s August Hyldgaard.

The Chinese April Trade Balance stood at $84.8 billion, stronger than expectations of $83.1 billion.

The Chinese April Exports rose +14.1% y/y, stronger than expectations of +7.9% y/y.

The Chinese April Imports rose +25.3% y/y, stronger than expectations of +15.2% y/y.

The Chinese April CPI rose +0.3% m/m and +1.2% y/y, stronger than expectations of -0.1% m/m and +0.9% y/y.

The Chinese April PPI rose +2.8% y/y, stronger than expectations of +1.7% y/y.

Japan’s Nikkei 225 Stock Index reversed earlier gains and closed lower today as worries over renewed escalation in the Iran war weighed on sentiment. The benchmark index initially climbed to a record high but later reversed course as oil prices surged in Tokyo trading after U.S. President Trump described Iran’s response to the latest U.S. proposal to end the war as “totally unacceptable.” Trump’s remarks could reignite tensions in the Strait of Hormuz. Japan’s economy is considered particularly exposed to higher oil prices, as the country depends heavily on energy imports, a large share of which passes through the Strait of Hormuz. Technology stocks were among the biggest losers on Monday. Meanwhile, Japanese government bond yields climbed on Monday as higher oil prices stoked inflation concerns. Elsewhere, the Bank of Japan said on Monday it had appointed Kazuhiro Masaki, a veteran central banker with expertise in monetary policy, as executive director in charge of its international affairs. In corporate news, Sony Group climbed over +8% after announcing plans to form an image-sensor joint venture with Taiwan Semiconductor Manufacturing Co. and forecasting stronger full-year net profit on robust game earnings. Investor focus this week is on Japan’s household spending data for March, which will indicate whether government measures to ease the soaring cost of living are beginning to revive outlays after three consecutive months of declines. A summary of opinions from the BOJ’s April policy meeting will also attract attention. In addition, BOJ Board Member Kazuyuki Masu and Deputy Governor Ryozo Himino are scheduled to deliver speeches this week. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.06% to 31.75.

Pre-Market U.S. Stock Movers

Moderna (MRNA) climbed over +7% in pre-market trading, extending last Friday’s rally after the company revealed it is conducting early-stage research on vaccines targeting hantaviruses.

Lumentum Holdings (LITE) rose more than +4% in pre-market trading after Nasdaq Global Indexes announced on Friday that the stock will be added to the Nasdaq 100 Index on May 18th, replacing CoStar Group.

Corning (GLW) gained over +3% in pre-market trading after BofA added the stock to its “U.S. 1 List,” a collection of its best investment ideas.

The Trade Desk (TTD) fell over -2% in pre-market trading after HSBC downgraded the stock to Reduce from Hold with a $20 price target.

Apollo Global Management (APO) dropped about -0.9% in pre-market trading after The Wall Street Journal reported that the company was in discussions to sell one of its private-credit funds.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - May 11th

Constellation Energy (CEG), Simon Property Group (SPG), AST SpaceMobile (ASTS), Circle Internet Group (CRCL), Fox Corporation (FOXA), Fox Corporation (FOX), STERIS (STE), Ovintiv (OVV), AECOM (ACM), Figure Technology Solutions (FIGR), Halozyme Therapeutics (HALO), The Mosaic Company (MOS), Hims & Hers Health (HIMS), Rigetti Computing (RGTI), Kodiak Gas Services (KGS), Amentum Holdings (AMTM), PACS Group (PACS), Novanta (NOVT), MARA Holdings (MARA), Archer Aviation (ACHR), RadNet (RDNT), Plug Power (PLUG), Catalyst Pharmaceuticals (CPRX), Liquidia (LQDA), CleanSpark (CLSK), Atlanta Braves Holdings (BATRK), FS KKR Capital (FSK), Uniti Group (UNIT), Atlanta Braves Holdings (BATRA), Keel Infrastructure (KEEL), Helios Technologies (HLIO), Driven Brands Holdings (DRVN), Quantum Computing (QUBT), Babcock & Wilcox Enterprises (BW), United Parks & Resorts (PRKS), ZoomInfo Technologies (GTM), Sonida Senior Living (SNDA), Power Solutions International (PSIX), Enviri (NVRI), Target Hospitality (TH), Bicara Therapeutics (BCAX), Harrow (HROW), Lincoln Educational Services (LINC), Harmonic (HLIT), Sally Beauty Holdings (SBH), Cadre Holdings (CDRE), Ramaco Resources (METCB), Septerna (SEPN), Kayne Anderson BDC (KBDC), eXp World Holdings (AGNT), American Public Education (APEI), CEVA, Inc. (CEVA).