MARKET WRAPS
Watch For:
No major economic updates expected; trading update for Ryanair
Opening Call:
European stock futures were lower, after Asia stocks traded mixed. U.S. Treasurys were higher, the dollar strengthened. Gold fell and oil rose.
Equities:
European futures were lower as President Trump ended his trip to China with no apparent breakthroughs. While the cease-fire in the Persian Gulf appears to be largely holding, cracks are starting to appear as the impasse over the Strait of Hormuz continues.
Trump warned Iran to agree to a peace deal, or else. "The Clock is Ticking, and they better get moving, FAST, or there won't be anything left of them," he said.
Diplomats are reportedly continuing to work on an agreement, but the two sides still appear far apart.
A slew of quarterly earnings reports due this week from major U.S. retailers should shed more light onto the state of consumer spending. Walmart, Target, Ross Stores, Home Depot and Lowe's, among others, are set to report.
Investors will also be eagerly awaiting quarterly earnings from Nvidia on Wednesday.
Forex:
The dollar strengthened amid rising oil prices as currencies weakened against the greenback.
The movement is particularly true for the oil importers such as India and the Philippines, which now face a double whammy of higher oil prices and rising U.S. yields, MUFG Bank's Michael Wan said.
There are also Asian currencies with "domestic headwinds and sensitive to U.S. yields such as IDR," the senior currency analyst said.
Bonds:
Treasury yields rose after marking a sharp rise in the previous week marked by growing skepticism about a fast solution to the Middle East conflict.
The Trump-Xi summit failed to provide signs of relief in the Strait of Hormuz, sending oil price higher.
U.S. indicators showed resilience in the manufacturing sector, as investors looked ahead to the release of Fed minutes, housing data and consumer sentiment.
Last week, the 10-year and the two-year saw the largest weekly gain since April 2025 and marked the highest yield since February 2025, while the 30-year reached a new 52-week high.
Energy:
Oil rose amid prospects of a prolonged closure of the Strait of Hormuz, a waterway through which one-fifth of the world's oil is typically transported.
President Trump posted Sunday on social media that "For Iran, the Clock is Ticking, and they better get moving, FAST, or there won't be anything left of them." The U.S. and Iran remain far apart on issues such as Iran's nuclear program.
This impasse "raises concerns over the viability of the fragile cease-fire and casts doubt over the prospects of a peace deal," said Tradu.com's senior market analyst Nikos Tzabouras.
Metals:
Gold was lower amd may be weighed further by expectations of Fed rate increases that typically reduce the allure of the non-interest-bearing precious metal.
"The market now anticipates interest-rate hikes by the Fed," said Commerzbank Research's Carsten Fritsch.
These expectations have emerged following the much higher-than-expected U.S. April PPI data, the commodity analyst noted.
"A 15-basis-point rise in U.S. key interest rates is priced in by the end of the year, and a full 25-basis-point rate hike by March 2027," Fritsch added.
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Nickel fell, as new supply issues have emerged due to the Middle East disruption, said ANZ Research commodity strategists.
The Middle East accounts for nearly 50% of the global sulphur trade.
Higher sulphur rates will push up the cost curve and affect nickel sulphate production, ANZ said.
TODAY'S TOP HEADLINES
China Says It Has Agreed With U.S. to Set Up Trade and Investment Bodies
BEIJING-China said Saturday that it had agreed with the U.S. to establish bilateral boards of trade and investment, fulfilling one expected outcome of President Trump's visit to Beijing and solidifying a commercial truce between the world's two largest economies.
China's Ministry of Commerce, in a statement published late Saturday in Beijing, also said that the U.S. had agreed to sell aircraft, aircraft engines and aircraft components to China, addressing one notable area in which the country continues to lag behind the U.S.
Less Fedspeak? Warsh's Communications Reform Could Lead to More Uncertainty
A key feature of Jerome Powell's Federal Reserve leadership was a robust communications strategy. Kevin Warsh, confirmed last week as the next Fed Chair, has promised a different approach. It could lead to more investor uncertainty and market volatility.
Powell presided over lengthy press conferences after every Federal Open Market Committee meeting, provided more than a dozen congressional testimonies, and gave more than 160 speeches and statements during his eight-year tenure. He also met with Congress more often than his predecessors, according to research from Thomas Drechsel, an economic professor at the University of Maryland.
Ukraine Increases Pressure on Russia With Biggest Strikes on Moscow This Year
KYIV-Ukraine launched its biggest strikes on Moscow in more than a year, with dozens of drones attacking Russia's capital in an audacious raid.
The Sunday strikes, which Russia said killed three civilians, demonstrate Kyiv's growing ability to launch long-range strikes as it seeks to damage the Kremlin's war and oil industries and bring the war home to Russians.
French Prosecutors Have Identified More Victims in Epstein Probe
PARIS-French prosecutors investigating the network of Jeffrey Epstein have been approached by around 20 women who said they were victims of the sex offender or his associates, 10 of whom were previously unknown to the authorities.
Laure Beccuau, who leads the Paris prosecutor's office, said officials were preparing to gather testimony from the potential victims, a number of whom live overseas and must be brought to France.
Activist Elliott Builds Big Stake in Life-Science Tools Supplier Bio-Rad
Activist Elliott Investment Management has built a sizable stake in Bio-Rad Laboratories and plans to push the supplier of life-science tools and diagnostics products to boost its underperforming stock price, according to people familiar with the matter.
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Expected Major Events for Monday
06:00/NOR: 1Q Labour Cost Index - preliminary figures
07:00/SVK: Mar New orders in industry
08:00/BUL: Apr CPI
08:00/ITA: Mar Foreign Trade EU
08:30/UK: S&P Global UK Consumer Sentiment Index
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(END) Dow Jones Newswires
May 18, 2026 00:00 ET (04:00 GMT)
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