OPENING CALL
Stock futures pointed to a lower open Tuesday after equities eked out small gains in the prior session which were enough to send the S&P and the Nasdaq to new records.
Investor confidence seen Monday seemed poised to buckle under heightened uncertainty regarding the situation in the Middle East, as President Trump said the cease-fire with Iran was on life support .
The Dow, the Nasdaq and the S&P 500 were all down before the opening bell. The moves come as some investors increasingly hold the view that the Strait of Hormuz will remain closed until the economic costs of its closure become too severe.
Focus today, however, is on consumer price data. Headline inflation is predicted to have risen to 3.7% in April from 3.3% in March. Core inflation is seen at 2.7% from 2.6%, according to The Wall Street Journal's poll of analysts.
Elsewhere, senators voted 49 to 44 Monday evening enabling that chamber to move onto a final vote on confirming Kevin Warsh to chair the Federal Reserve.
Under a Federal Reserve to be led by Warsh , "investors should expect fewer explicit rate commitments and less commentary designed to smooth over near-term volatility," LPL Financial said.
Economic Insight
Rising gasoline prices will put continued upward pressure on the overall U.S. CPI, SEB said, adding that core inflation, excluding food and energy, was also expected to rise at a faster pace.
"Spillovers to other prices from the rise in energy prices will take longer, and indicators such as sales prices in surveys are still sending reassuring signals, while prices for services, including rents, have gradually moderated."
Washington and Beijing will likely maintain their current trade truce at the upcoming Trump-Xi summit, Commonwealth Bank of Australia said.
"We do not expect the summit to result in an easing of current trade restrictions, such as further easing of U.S. exports controls on semiconductors and related technologies."
Stocks to Watch
GoPro gained about 4% as the company said it was reviewing a possible sale or merger after receiving multiple unsolicited inquiries.
Hims & Hers fell 14% after the company swung to a first-quarter loss and warned it could face further pressures ahead.
Victoria's Secret shares were down nearly 2% as it claims it was spied on by an adviser to billionaire investor Brett Blundy.
Zoominfo Technologies shares tumbled 34% after it cut its full-year guidance .
Watch For:
CPI data for April; World Agricultural Supply & Demand Estimates; Federal Reserve Bank of Chicago President Austan Goolsbee speaks at Greater Rockford Chamber of Commerce Luncheon
Today's Top Headlines/Must Reads:
- Sam Altman's Business Dealings Under GOP Scrutiny Ahead of OpenAI's IPO
- Julia Letlow Is Trump's Big Midterms Gamble
- The Insider-Trading Scandal That Is Rocking M&A Law Firms
MARKET WRAPS
Forex:
The dollar rose as the stalemate between the U.S. supported demand for safe-haven assets.
"The renewed geopolitical uncertainty pushed oil prices higher, reinforcing concerns over persistent inflationary pressures," FXEM said.
Sterling trimmed its losses after U.K. Prime Minister Keir Starmer resisted growing pressure to resign. The currency remained down against both the euro and dollar.
ING said that the pound has plenty of room to build a negative premium as Starmer tries to gain support from lawmakers in his Labour Party and avert a leadership challenge.
Bitcoin fell as risk appetite dampened.
"We remain in the 'No War No Peace' scenario in the Middle East but the cease-fire is looking increasingly fragile," Jefferies said, adding that negotiations appear to be in a stalemate.
Bonds:
Treasury yields rose as the Iran stalemate kept upward pressure on yields.
The 10-year Treasury yield
could soon approach 4.5% assuming minimal progress and no lasting agreement for the rest of this week between the U.S. and Iran, ING said.
"So far it's been steady and measured, and there, in fact, has been no material selling of Treasurys.
Morgan Stanley Wealth Management anticipates rising term premiums on Treasurys and higher-for-longer long-maturity rates.
"For the Trump administration, which has pinned its hopes for more aggressive easing on its incoming Federal Reserve chair Kevin Warsh, things could not be more challenging," adding that Warsh will inherit the most divided Fed in over 32 years.
Energy:
Oil prices rose more than 2% as stalled talks between the U.S. and Iran worried markets.
"Oil prices climbed for a second day as the global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz," Saxo Bank said.
Metals:
Gold prices fell as the fragile cease-fire between the U.S. and Iran clouds the outlook.
"The market appears to be stuck between geopolitical anxiety and rising inflation worries," ANZ said.
Gold could reach new highs this year , buoyed by macro uncertainty boosting diversification into gold and broadening private and official sector demand, UBS said adding investor flows appear to be the main reason for gold's near-term moves.
TODAY'S TOP HEADLINES
Bristol-Myers Squibb and China's Hengrui Pharma Forge Tie-Up
U.S. pharmaceutical giant Bristol-Myers Squibb has struck a strategic partnership and licensing deal with major Chinese drugmaker Hengrui Pharmaceuticals, in a deal that could worth more than $15 billion.
The two companies said Tuesday they would collaborate to advance 13 early stage drug programs.
Elon Musk's Grok Is Losing Ground in AI Race
Elon Musk's artificial-intelligence model, Grok, lags far behind its fast-growing competitors-and an agreement by parent company SpaceX to rent massive computing power to Anthropic raises questions about whether it can still catch up.
The deal, signed in early May, will give the maker of the Claude AI model and chatbot all the computing capacity at one of Musk's main data centers. Anthropic and rival OpenAI have been racing to acquire all the computing capacity they can as booming demand challenges their ability to serve their models.
Novo Nordisk Says Higher-Dose Wegovy Shot Helps Some Patients Lose 28% of Their Weight
Novo Nordisk said certain patients on its higher-dose Wegovy shot lost 27.7% of their body weight on average in a trial.
The Danish drugmaker said those patients who reacted faster to treatment by losing at least 15% of their weight after the first six months went on to achieve the nearly 28% total weight loss after about a year and a half.
Bayer Net Profit Surges Driven by Growth in Agricultural Division
Bayer reported a sharply higher first-quarter net profit, aided by a gain from the sale of an antibiotics business and stronger underlying earnings at its agricultural division.
The German agricultural-and-pharmaceutical group said Tuesday that net profit for the first quarter was 2.76 billion euros ($3.25 billion) compared with 1.30 billion euros for the same period last year, when its results were hit by litigation provisions. The company also said it booked net special gains of 324 million euros mainly linked to the sale of its Avelox antibiotics business.
Adnoc Gas Expects Strait of Hormuz Closure to Hit Full-Year Profit
Adnoc Gas said the closure of the Strait of Hormuz will hit its full-year net profit despite higher prices helping to offset lost sales once the waterway opens up.
The Abu Dhabi-owned gas company said Tuesday that it anticipates a hit to second-quarter net income between $400 million and $600 million due to the strait's closure. Adnoc's forecast assumes shipping operations return to normal prior to the end of the quarter.
Japan Finance Minister Confirms Continued Coordination with U.S. on Forex
TOKYO-The U.S. and Japan have reaffirmed their commitment to working closely together to monitor the currency market, Japan's finance minister said after meeting with Treasury Secretary Scott Bessent.
"We discussed financial market movements, including foreign exchange rates, in light of the situation in the Middle East. Regarding recent currency moves, we confirmed that Japan and the U.S. have been able to coordinate very well," Finance Minister Satsuki Katayama said at a news conference.
Trump's Complaints About Iran War Leaks Prompt Aggressive DOJ Investigations
President Trump privately complained to acting Attorney General Todd Blanche about media leaks in the wake of the Iran war last month, according to administration officials familiar with the matter, prompting an aggressive push at the Justice Department to pursue those investigations.
Blanche vowed to secure subpoenas specifically targeting the records of reporters who have worked on sensitive national security stories, one official said. In one meeting, Trump passed a stack of news articles he and other senior officials thought threatened national security to Blanche with a sticky note on it that said "treason," another administration official said. Senior Justice Department officials have met with counterparts from the Pentagon to discuss the investigations, according to officials familiar with the meetings.
Ukraine Corruption Investigation Ensnares Zelensky's Ex-Top Aide
KYIV, Ukraine-Ukraine's anticorruption authorities said a former top presidential adviser is a suspect in a sprawling investigation, a blow to the country's leadership in the midst of the war with Russia.
The announcement late Monday by Ukraine's National Anti-Corruption Bureau, or NABU, is a stunning twist in a long-running case dubbed Operation Midas that already has implicated close allies of President Volodymyr Zelensky.
The World's Most Surprising Capitalist Makeover Is Under Way in Sweden
STOCKHOLM, Sweden-This paragon of collectivism is pivoting toward rugged individualism.
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May 12, 2026 06:07 ET (10:07 GMT)
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