U.S. stocks closed slightly higher early Monday, Beijing time, with the S&P 500 and Nasdaq Composite reaching new record highs. The S&P 500 closed above the 7400-point level for the first time. Investors are preparing for key economic data scheduled for release this week, including the April Consumer Price Index and retail sales reports. Oil prices climbed after a rejection of an Iranian proposal.
The Dow Jones Industrial Average rose 95.31 points, or 0.19%, to close at 49,704.47. The Nasdaq Composite gained 27.05 points, or 0.10%, to finish at 26,274.13. The S&P 500 added 13.91 points, or 0.19%, ending at 7,412.84. Market sentiment was tempered by uncertainty in the Middle East. The U.S. President rejected a peace proposal response from Iran over the weekend, calling it "completely unacceptable," an action that pushed oil prices up approximately 3%. The rise in energy costs added extra pressure to the stock market. The core focus for markets this week will be the April CPI data scheduled for release on Tuesday. Economists forecast the year-on-year CPI increase will rise to 3.7% from 3.3% in March, with a month-on-month increase of 0.6%. Core CPI is expected to rise 2.7% year-on-year and 0.3% month-on-month. If inflation data comes in higher than expected, it could further reduce market bets on Federal Reserve interest rate cuts within the year. Additionally, the April retail sales data due on Thursday is also closely watched, with the month-on-month growth rate expected to slow to 0.5% from 1.7% in March. On the earnings front, Cisco, Alibaba, and Applied Materials are set to report their results this week. Meanwhile, the term of Federal Reserve Chair Jerome Powell is set to end on Friday, with the Senate expected to confirm Kevin Warsh as the new chair this week, a policy transition process that is also drawing market attention. Last Friday, both the S&P 500 and Nasdaq Composite set new all-time closing highs. Markets continue to monitor the latest developments in U.S.-Iran tensions. Iran submitted a new proposal to U.S. negotiators, with the core aim of ending the conflict that has lasted for months. Iran's semi-official Tasnim news agency, citing informed sources, reported that this counter-proposal emphasizes the need to end the war on all fronts and lift sanctions on Tehran. In response, the U.S. President posted on the social media platform Truth Social that he did not like Iran's response, adding that the deal was "completely unacceptable!" Following the rejection of Iran's proposal, crude oil futures climbed. Brent crude, the international oil benchmark, surpassed $103 per barrel. Last week, both major oil contracts recorded a weekly loss of 6%, as markets anticipated an imminent end to the conflict, now in its tenth week, which would allow oil to pass through the Strait of Hormuz. "Oil markets are still a geopolitical headline machine at the moment, with prices swinging wildly on every comment, rejection, or warning coming out of Washington and Tehran," said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova. Amin Nasser, CEO of Saudi Aramco, said on Sunday that the world has lost approximately 1 billion barrels of oil over the past two months, and even if oil flows resume, it will take time for energy markets to stabilize. Shipping data from Kpler showed that three more crude-carrying tankers sailed out of the Strait of Hormuz last week with their trackers turned off to avoid Iranian attacks, highlighting a growing trend to sustain Middle Eastern oil exports. "Even as the acute oil shock fades by the end of 2026, the persistent risk of renewed disruption in the Strait of Hormuz, depleted inventories, and diminished policy coordination are expected to keep a geopolitical risk premium embedded in prices," analysts at ANZ wrote in a note on Monday. ANZ analysts expect Brent crude to remain above $90 per barrel throughout 2026 and around $80-$85 per barrel heading into 2027, as demand growth recovers and inventories are gradually rebuilt. Nevertheless, some market observers expect the U.S. market to remain resilient despite the uncertainties. "Economic activity may slow relative to the prior path due to the Iran war and the subsequent oil price shock. But there are much larger structural factors that should keep overall economic conditions much better than many expect," said Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock. This week, investors will focus on the April Consumer Price Index and Producer Price Index, which may provide new insights into how the conflict is affecting inflation. Traders will also watch for earnings reports from companies like Under Armour and Cisco.
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