The U.S. and Iran still seem at odds over Tehran’s nuclear ambitions and its control of the Strait of Hormuz, which remains largely shut to oil and cargo shipping.
World oil prices jumped nearly 5% on Trump’s declaration overnight, before easing slightly to leave Brent crude trading at around $104 per barrel. That was enough to stall persistently buoyant stock markets.
But the AI frenzy and chip boom continues to compete with the energy crisis for attention, as evidenced by a parallel jump of over 4% in South Korea’s chip-heavy KOSPI benchmark on Monday.
Wall Street futures were mostly flat early on Monday, after the S&P 500 set another series of record highs last week. Adding to that sense of resilience was Friday’s April U.S. employment report, which chimed with a swathe of other labor market indicators last week to show little or no damage to overall job creation from the war so far.
Employment disturbance may come with a lag, however, and still-high gas pump prices may eventually bite.
China’s mainland stocks climbed ahead of this week’s summit between President Trump and Chinese President Xi Jinping, which will begin on Thursday. But above-forecast jumps in long-subdued Chinese producer and consumer inflation amid the energy shock may make for an uncomfortable backdrop.
Staying in Asia, Treasury Secretary Scott Bessent will set out for Tokyo today for meetings with Japanese officials.
Elsewhere, pressure on UK Prime Minister Keir Starmer from within his own ruling Labour Party continued to build after poor local election results last week. Following weekend reports of a possible leadership challenge, Starmer said he would not step down. He delivered a speech on Monday aimed at shoring up his party's support.
Back stateside, existing home sales data is on the slate for Monday, but April inflation updates will dominate from Tuesday. Attention will also be on Washington, as the U.S. Senate may vote on Monday on Kevin Warsh’s nomination to be the next Federal Reserve Chair. Outgoing Chair Jerome Powell's term will formally expire on Friday.
Finally, the week’s big company earnings include Cisco and Applied Materials.
