OPENING CALL
Today looks set to be another day of caution on Wall Street, with stock futures in the red for the three major indexes.
Stocks have taken a breather after a technology-led rally pushed the Nasdaq composite and S&P 500 to record highs last week.
Among the reasons for the pullback: fear that without a diplomatic breakthrough on Iran, oil prices will keep rising, pushing up inflation and worsening a surge in government bond yields.
The rally in oil prices paused after Trump said he would hold off on attacking Iran at the request of Gulf leaders.
Even so, benchmark Brent crude prices were up more than 20% over the past month at around $110 a barrel.
Navellier & Associates said interest rates had become very sensitive to energy prices and should come down meaningfully once flows through the Strait of Hormuz resume.
"Trump is under pressure to 'fix' the Iran situation soon," it added.
Investors will watch a slew of earnings this week, including results from Nvidia on Wednesday, which could reignite the frenzy over AI chips.
It is widely expected to again show big numbers, but it has set a high bar.
With other major players in the sector having already reported, the short-term future of this bull market could rest on its results.
Overseas markets were mixed. South Korea's Kospi index, which has been supercharged by enthusiasm for chip stocks, fell more than 3%.
Market Insight
Near-term volatility in bond yields could keep markets on edge but current attractive yields and growth risks pointed to an appealing risk-return profile for short- and medium-maturity quality bonds , UBS Global Wealth Management said.
"Yield volatility is likely to pick up further the longer the Strait of Hormuz remains closed, with markets pricing the upside risks to inflation and tighter monetary policies across the world."
However, it maintained the view that quality bonds offered an appealing risk-return profile given two-sided risks of inflation and growth.
"We also do not expect higher yields to derail the current equity rally, " it added.
Stocks to Watch
Agilysys recorded higher profit and sales. Shares gained 16% after hours Monday.
CoreWeave was down premarket after The Wall Street Journal reported that Alphabet and Blackstone plan to create an AI cloud company to rival CoreWeave . Competitor Nebius was also down premarket. Alphabet and Blackstone shares ticked up ahead of the bell.
ServiceNow shares were rising premarket after gaining 8% in the last session after BofA gave the stock a buy rating.
Tesla shares were down 0.7% premarket, and it seems that investors don't like that the company raised prices of its Model Y in the U.S.
XP launched a share buyback program worth up to 1 billion Brazilian reals. The stock declined 4% after the bell Monday.
Watch For:
Canada CPI for April; Earnings from Home Depot, CAVA, Toll Brothers
Today's Top Headlines/Must Reads:
-The Art of War, Elon Musk Edition: How to Lose a Lawsuit and Still Claim Victory
-The American Rebellion Against AI Is Gaining Steam
-How Zyn Became All the Rage Inside Trump World-Including With RFK Jr.
MARKET WRAPS
Forex:
The DXY dollar index edged up 0.1%.
Sterling fell after data showed higher U.K. unemployment and slower wage growth , which could dissuade BOE policymakers from raising interest rates for now.
Bonds:
Treasury yields edged lower as oil prices eased, but remained at elevated levels, on the lack of meaningful progress towards a Middle East resolution.
"The sell-off in global fixed income markets has stabilized in the last 24 hours with importantly the short-end of the USD curve even coming lower driving a slight steepening of the curve," Danske Bank said.
The 10-year Treasury yield could rise further UOB said--based on the daily chart--adding that next resistance was at 4.809%.
"The past few instances of such significant weekly spikes in the 10-year yield were each followed by further upside."
This time round, last week's strong surge was "accompanied by the yield breaking above the weekly descending trendline connecting the highs of 5.021% and 4.809%, which increases the likelihood of a sustained move higher in yields."
Columbia Threadneedle Investments expects the ECB to be the first to raise rates at its June meeting, followed by the BOE in July.
"For the Fed, expectations have moved a long way over the course of the year, from aggressive cuts under the new leadership to markets now pricing in rate rises over the next 12-18 months."
HSBC forecast more central banks to raise policy rates--even if the Strait reopens swiftly- -as the risk of supply shocks and the impact on global inflation and growth will endure.
Macquarie Group said that, even if the Fed moved to signal that it would adopt a neutral bias in June, it might not be enough to stabilize inflation expectations and long-term Treasury yields.
Energy:
Oil recouped some losses following a 2% slide after Trump said he would hold off on a planned attack on Iran to make room for peace negotiations.
"The oil market continues to trade in wide ranges, and it remains extremely sensitive to Iran-related headlines," ING said.
"ICE Brent traded almost in a $6/bbl range yesterday."
Analysts said the extended sanctions waiver allowing countries to purchase Russian oil currently stranded at sea for another 30 days would be welcomed by Asian buyers, who are more exposed to supply disruptions from the Middle East.
Metals:
Gold prices held just above $4,500, pressured by expectations of higher interest rates as the Iran conflict dragged on, with bullion down more than 13% since the war began.
"Traders remain focused on the Middle East crisis and the inflationary impact of sustained higher energy prices," Saxo Bank said.
"Escalating tensions can weigh on gold through higher yields and a stronger dollar, while any credible path toward de-escalation or peace may ultimately support prices."
Copper
Copper fell, pressured by inflation concerns and weaker Chinese data, but despite the retreat, prices were still up more than 8% year-to-date.
"The pullback comes after a strong run, with prices slipping from the recent highs hit just last week amid intensifying macro headwinds," ING said.
U.S.-Iran tensions and higher oil prices have increased fears of persistent inflation and stricter monetary policy, which could hurt global growth and industrial demand.
In China, softer activity in investment, retail and industrial output added to concerns about the demand outlook.
TODAY'S TOP HEADLINES
Swatch's New Watch Debut Descends Into Chaos
Swatch's latest chaotic product launch-replete with riot police and tear gas-shows that for buzz-seeking brands, manufactured virality can have its upsides-and its complications.
Swatch was forced to close stores on three continents over the weekend after fans and watch profiteers overwhelmed the debut of the manufacturer's tie-up with luxury brand Audemars Piguet.
Stellantis to Start Production of New Small EVs in Italy
Jeep-maker Stellantis will start producing a new range of electric vehicles to serve the affordable small-car market in Europe.
The automaker said Tuesday that the project-called E-Car-will see production begin in 2028 at its Pomigliano d'Arco plant in Naples, Italy.
StanChart Lays Out Plan for 18% Return, Corporate Job Cuts
Standard Chartered has laid out targets for higher returns over the medium term and announced plans to cut corporate-function roles as it scales AI use.
The London-based bank is aiming for a more than 15% return on tangible equity in 2028, building up to about 18% in 2030.
KPMG Taps Anthropic to Revamp Global Tax, Advisory Platforms
KPMG is revamping how its global workforce will use artificial intelligence through a new deal with Anthropic that aims to make its tax and consulting services faster-moving and more efficient.
The deal marks the first time San Francisco-based AI company Anthropic will integrate its Claude tools on a Big Four tax platform. Some firms have made deals to provide employees with access to AI tools on the side without altering their main global platforms around Anthropic or its competitor OpenAI.
Jury Rejects Musk's Claims Against OpenAI
OAKLAND, Calif.-A jury unanimously rejected Elon Musk's claims against OpenAI, finding that he brought his lawsuit against the company and Chief Executive Sam Altman after the statute of limitations expired.
In deliberations that lasted less than two hours, the nine-person panel found against Musk on technical grounds. He had alleged in testimony that the startup behind the world's most popular chatbot "stole a charity" when it converted into a for-profit company.
Anthropic Lets Mythos Users Share Cyber Threats With Others
WASHINGTON-Anthropic recently began letting users of its powerful artificial-intelligence model Mythos share cybersecurity threats with others who may face similar vulnerabilities, modifying its previous stance amid concerns that limiting access to the information could hurt smaller companies.
The new policy highlights the challenges facing AI companies that are restricting access to their best models.
The Little-Known Hedge Fund That Stands to Make Over $10 Billion on SpaceX
SpaceX's planned initial public offering is expected to be a windfall for futurist investors and venture capitalists. A publicity-shy hedge-fund manager whose other investments include Dick's Sporting Goods and Wingstop is also expected to make a killing.
(MORE TO FOLLOW) Dow Jones Newswires
May 19, 2026 05:59 ET (09:59 GMT)
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