OPENING CALL
Stock futures pointed to a mostly flat open Monday after President Trump called Iran's response to the latest U.S. proposal to end the war "totally unacceptable."
The diplomatic deadlock keeps the region in a state of limbo , neither at war nor at peace and oil prices, the dollar and Treasury yields rose.
"Trump does want a deal, but he needs to show to his supporters that [the] U.S. managed to secure a deal on nuclear, which was the whole point of going into the war," Jefferies said.
The war with Iran is likely to be a topic of discussion when Trump meets with China's leader later this week.
Saxo Bank said Iran will likely be the most urgent topic of the upcoming meeting. Danske Bank, however, said it doesn't expect any major deals on any front as tariffs, tech, rare earths and agricultural purchases will also likely be on agenda.
Beyond geopolitics, investors await consumer inflation data on Tuesday which could reinforce the Federal Reserve's wait-and-see stance.
The year-over-year consumer-price index is expected to rise to 3.8% in April from 3.3% previously, while the core CPI is expected to rise to 2.7% from 2.6%, according to The Wall Street Journal's poll.
"If they surprise on the upside, the combination with strong labour market data will keep the Federal Reserve in their current wait-and-see mode," Danske Bank said.
Those figures will add to Friday's April payrolls data , which SEB said support the Federal Reserve's view that the labor market is stable and that the Fed can focus on upside risks to inflation.
"Increasing energy prices may become more of a challenge to the labor market going forward, but for now the data adds to the picture of a resilient U.S. economy."
Producer-price data for April is expected Wednesday and April retail sales data will come out Thursday, followed by April industrial production figures Friday.
Also, Senators are expected to vote as early as Monday on Kevin Warsh's nomination to chair the Fed.
Stocks to Watch
Intel shares rose 5%, adding to the 14% increase after The Wall Street Journal reported on Friday that the chip maker struck a preliminary deal to supply chips to Apple.
Micron Technology was up 3% as its South Korean rival addresses union demands.
MidCap Financial Investment was up by less than a percent as Apollo Global Management is in talks to sell the business.
Moderna increased 12% after a U.S. national tested positive for the Andes strain of hantavirus.
Watch For:
U.S. Existing Home Sales for April
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MARKET WRAPS
Forex:
The dollar rose as concerns about renewed tensions in the Iran war dampened risk sentiment and lifted oil prices.
Sterlin g fell on risk aversion due to Iran war tensions and fears about a leadership challenge for Prime Minister Keir Starmer after his Labour Party's defeat in local elections last week.
Bonds:
Treasury yields and the dollar rose as the chances of an imminent peace deal between the U.S. and Iran ebbed, keeping oil prices high.
This has kept concerns over energy supply disruptions elevated, supporting higher oil prices and reinforcing inflation expectations.
Treasury yields could be breaking free from purely oil-driven dynamics and are also being pushed higher by evidence of a robust economy and strong corporate earnings, ING said.
Energy:
Oil prices climbed after President Trump said Iran's response to a U.S. proposal to end the war was "totally unacceptable."
Brent crude rose 3.7% to $105.07 a barrel, while WTI futures gained 4.30% to $99.52 a barrel.
Metals:
Gold futures fell as a lack of progress in U.S.-Iran peace talks pushed oil prices higher, fuelling concerns over prolonged disruptions and higher inflation.
"Markets are increasingly expecting higher interest rates to combat inflation risks tied to elevated energy prices, which is negative for non-yielding gold," MUFG said.
TODAY'S TOP HEADLINES
As Nvidia earnings draw closer, here are 5 things investors need to watch
Nvidia is still at the center of the artificial-intelligence universe, but its stock doesn't necessarily reflect that. Yet a Goldman Sachs analyst sees potential for renewed excitement once the company reports earnings later this month.
Shares of Nvidia NVDA have fallen behind peers in the semiconductor rally. Nvidia's stock rose 1.8% on Friday, and is up about 15% so far this year. By comparison, the broader PHLX Semiconductor Index SOX has risen 61% on the year.
How a Job at OpenAI Became the Greatest Lottery Ticket of the AI Boom
OpenAI allowed employees to sell up to $30 million worth of shares each in a recent financing, making them some of the earliest financial winners of the artificial-intelligence boom.
Last October, more than 600 current and former employees sold their shares in a single stroke, collectively making $6.6 billion. For roughly 75 of them, that meant walking away with the full $30 million, according to people familiar with the matter.
SoftBank Launches Japan Battery Venture Amid AI Hardware Push
Japanese investment conglomerate SoftBank Group has launched a battery business amid surging demand for electricity driven by the global artificial intelligence boom.
SoftBank Group's telecommunications arm-SoftBank Corp.-said Monday it will build large-scale battery cells and storage systems for the Japanese market, in partnership with South Korea-based battery company Cosmos Lab and AI firm DeltaX Co.
China's Factory-Gate Price Growth Beats Expectations as Mideast War Fuels Inflation
China's factory-gate inflation neared a four-year high in April, continuing a reversal from a long period of deflation as war in the Middle East keeps fueling higher energy costs.
Consumer price growth also accelerated but a backdrop of weak domestic demand and concerns about overcapacity means doubts persist about whether the economy will experience real reflation.
India Asks Locals to Pause Gold Buying in Bid to Shore Up FX Defenses
India's prime minister has urged locals to stop buying gold for a year, an appeal aimed at defending the country's foreign-exchange reserves as geopolitical headwinds keep buffeting the rupee.
Prime Minister Narendra Modi asked citizens in a speech on Sunday to avoid buying gold jewelry for functions, coming as the country's appetite for the precious metal continues to drive foreign-currency spending.
China Exports More EVs Than Traditional Cars for First Time in April
China exported more electric vehicles and plug-in vehicles than gasoline or diesel cars for the first time in April, as automakers expanded aggressively overseas to offset subdued demand in the domestic market.
China exported 769,000 automobiles in April, with new-energy vehicles, a term that includes EVs and plug-in hybrids, accounting for 52.7% of total exports, the China Passenger Car Association said Monday.
The U.S. Tied His Bank to Iran Proxies. Now He's Trump's Choice to Run Iraq.
A little-known Iraqi tycoon named Ali Al Zaidi has emerged as the likely next prime minister of Iraq with the backing of President Trump, who has invited the businessman to Washington and said the U.S. "is with him all the way."
The White House endorsement has come with a demand that Zaidi exclude Iranian-backed militias from Iraq's next government and curtail Tehran's influence in Baghdad.
Xi's China: Dazzling Technology, Military Muscle-and an Economic Mess
More than a decade into Xi Jinping's rule, China's military has grown more formidable, its factories dominate global manufacturing and its technology pioneers are closing the gap with Silicon Valley.
Yet big parts of its economy are a mess. A colossal property bust has destroyed trillions of dollars in wealth, consumer confidence has been gutted and the job market has grown bleak.
Hantavirus Cruise Passengers Head for Home Countries After Ship Reaches Port
The cruise ship at the center of the hantavirus outbreak arrived early Sunday in Spain's Canary Islands, setting in motion a delicate evacuation process designed to end the weekslong ordeal of those on board while avoiding the spread of a contagion that left three passengers dead.
The MV Hondius, carrying around 150 people, was anchored off Tenerife, the largest island in the archipelago near northwest Africa, Spain's Health Ministry said. From there, authorities planned to ferry the people to shore and put them on flights home for quarantine and isolation.
Iran's Supreme Leader Is MIA, Just When Negotiators Need Him Most
Iran's rulers have a problem as they attempt to negotiate an end to the war: Their new supreme leader is noticeably MIA and silent on the talks.
U.S. and Iranian officials say Mojtaba Khamenei was severely injured in a February airstrike, which killed his wife, son and father, former Supreme Leader Ali Khamenei. Since then, the only thing Iranians have heard or seen from their new leader are messages purportedly written by him and images that appeared to be modified or generated by artificial intelligence.
Write to pierre.bertrand@wsj.com
TODAY IN CANADA
1Q Earnings:
Barrick Mining
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Ovintiv Inc
Trican Well
Economic Indicators $(ET)$:
Nothing major scheduled
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