Pre-market movements on Monday, May 18th, show U.S. equity futures pointing lower. As of writing, Dow futures are down 0.29%, S&P 500 futures have declined 0.13%, and Nasdaq futures are 0.03% lower.
In European markets, Germany's DAX index is up 1.02%, the UK's FTSE 100 has gained 0.90%, France's CAC 40 is down 0.65%, and the Euro Stoxx 50 is 0.34% higher.
In commodities, WTI crude oil is slightly down 0.04% at $100.98 per barrel, while Brent crude has edged up 0.10% to $109.37 per barrel.
Market reports indicate the U.S. has agreed to a temporary waiver on oil sanctions against Iran during negotiations. A source close to the U.S.-Iran negotiation teams stated that the latest U.S. proposal includes an "exemption" for Iran's oil sanctions while talks are ongoing, effectively a temporary suspension of sanctions. Iran has emphasized that the lifting of all sanctions must be part of the U.S. commitment. However, the U.S. proposal involves a temporary waiver to be implemented by the Office of Foreign Assets Control (OFAC) before a final understanding is reached. Neither side has officially confirmed this news.
Simultaneously, Pakistan's Prime Minister expressed optimism about holding a new round of U.S.-Iran talks in Islamabad. Reports citing informed sources suggest Pakistan has relayed Iran's revised proposal for ending the conflict to the U.S., which has reportedly received it. Recent statements from Iran's foreign ministry, focusing on "ending the war" and continued discussions with Oman regarding the Strait of Hormuz transit mechanism, are seen as positive signals that communication channels remain open.
Analysts suggest another "TACO moment," potentially driving a rally in global risk assets like tech stocks, cryptocurrencies, and high-yield corporate bonds closely tied to AI computing infrastructure, may be imminent.
Global bond markets continue to decline, with expectations for Federal Reserve rate hikes this year surging and inflation trades resurfacing. Bond markets from Tokyo to New York extended losses on Monday as persistent Middle East conflicts drive up energy prices, fueling inflation concerns and prompting investors to increase bets on global central bank rate hikes. The yield on the benchmark 10-year U.S. Treasury note, which moves inversely to price, jumped to 4.631%, its highest level since February 2025, after climbing more than 20 basis points last week. The two-year Treasury yield, most sensitive to inflation and rate expectations, touched a 14-month high of 4.102%, while the 30-year yield rose to a one-year high of 5.159%. Rising yields have boosted the U.S. dollar and cast a shadow over equity markets that have recently surged on AI enthusiasm.
Morgan Stanley's chief U.S. equity strategist, Mike Wilson, warns that the ongoing bond market sell-off poses a significant test for the AI-driven U.S. stock rally. Wilson cautioned that if bond market volatility intensifies and long-term rates continue to rise, equities could face their first substantial pullback since bottoming in late March. Despite near-term risks, Wilson's team maintains a long-term bullish stance, recently raising their 12-month target for the S&P 500 to 8300, citing what they see as the strongest corporate profit growth in over two decades outside of post-shock recovery periods.
Goldman Sachs has raised its forecast for global central bank gold purchases and reiterated its year-end bullish target of $5,400 per ounce for gold, citing the complex backdrop of shifting geopolitical landscapes and persistent inflation concerns. The firm's analysts stated they expect central bank gold buying to increase to an average of 60 tonnes per month by 2026, marking a significant methodological revision.
Copper prices extended their decline for a third consecutive day amid deepening inflation concerns, putting pressure on industrial commodities broadly. Stalled U.S.-Iran negotiations have heightened geopolitical tensions. U.S. President Trump has renewed threats against Iran, with significant disagreements remaining over ending the conflict and reopening the Strait of Hormuz, pushing oil prices higher.
Ed Yardeni of Yardeni Research, who coined the term "bond vigilantes," stated that the Federal Reserve needs to align with the bond market as inflation worries mount, or risk losing control over borrowing costs. Yardeni argued that given the current market environment is "no longer" suitable for an accommodative stance, the Fed should remove its easing bias at its June meeting. He warned that failure to do so could lead investors to perceive the central bank as behind the curve on inflation, demanding higher inflation risk premiums.
In individual stock news, President Trump, in an interview, highlighted the government's investment in Intel, noting that the 10% stake acquired last year as part of a roughly $10 billion investment for U.S. factory projects is now worth over $50 billion just eight months later. He suggested the government might consider a gradual divestment.
LiveRamp's stock surged in pre-market trading after Publicis Groupe announced a $2.5 billion all-cash deal to acquire the data collaboration platform. The acquisition aims to deepen Publicis's data and AI capabilities. The offer price of $38.50 per share represents a 29.8% premium to LiveRamp's closing price on May 15th.
Tesla has raised prices for its Model Y in the U.S. for the first time in two years, increasing the Long Range AWD and Long Range RWD versions by $1,000 each and the Performance version by $500, as the company seeks to improve margins amid sales pressure.
Arm's stock fell on reports that it is facing a U.S. Federal Trade Commission antitrust investigation into whether it has abused its dominant position in chip licensing, potentially restricting competitors' access to core processor technology as it expands its own chip design business.
Activist investor Elliott Investment Management has reportedly taken a significant stake in Bio-Rad Laboratories, aiming to boost the share price of the life science instrument supplier, whose stock has fallen over 70% from its 2021 peak.
Baidu reported first-quarter revenue of 32.08 billion yuan, with revenue from its core AI new business surpassing 50% of total revenue for the first time, growing 49% year-over-year. Adjusted operating profit was 3.81 billion yuan.
iQIYI reported first-quarter 2026 total revenue of 6.23 billion yuan, with membership service revenue of 4.20 billion yuan, up 2% sequentially.
Tencent Music Entertainment announced the completion of its acquisition of Himalaya. The merger consideration includes up to $1.26 billion in cash and up to 175 million TME Class A ordinary shares. Himalaya is now a wholly-owned subsidiary of TME.
Important economic data and events scheduled for release include the U.S. NAHB Housing Market Index for May at 22:00 Beijing Time.
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