Global markets opened the week with a mix of geopolitical anxiety and sector-specific optimism after diplomatic momentum between the United States and Iran stalled over the weekend. President Donald Trump dismissed Iran's plan to end hostilities as "totally unacceptable," underlining the sizeable gap between the two sides and clouding prospects for reopening the Strait of Hormuz.
Iran had circulated a proposal on Sunday aimed at ending the war on all fronts. The document included a demand for compensation for war damages and asserted Iranian sovereignty over the Strait of Hormuz. By contrast, the U.S. approach had been to seek an end to fighting before entering negotiations on more contentious issues such as Iran's nuclear programme. The divergence in these positions left the pathway to talks unclear.
Markets registered immediate reactions. Oil prices climbed by more than 4% during the Asia session, while the U.S. dollar strengthened. S&P 500 futures slipped on the headlines and European futures were broadly flat, but it was activity in the artificial intelligence sector that largely underpinned equity market momentum.
South Korean stocks led regional advances, surging nearly 5% to fresh record highs. The gains were concentrated in chipmakers, with Samsung Electronics and SK Hynix at the forefront. The article noted that SK Hynix's share price has almost tripled since the start of the year.
Political developments in the United Kingdom are also in focus. British Prime Minister Keir Starmer is scheduled to deliver a speech on Monday in which he will set rebuilding relations with the rest of Europe as his government's defining mission. The speech is intended as a political counterattack to growing calls for him to step down.
On the data front, China released producer price figures showing a stronger-than-expected rise in April, with producer prices reaching a 45-month high. The uptick adds pressure on manufacturers already coping with weak domestic demand.
Other policy and diplomatic movements to watch include a visit to Japan by U.S. Treasury Secretary Scott Bessent, with markets keeping an eye on the yen after Japanese interventions in recent weeks. Separately, U.S. officials previewed a two-day visit to China by President Trump during which he and Chinese President Xi Jinping are set to discuss Iran, Taiwan, artificial intelligence and nuclear weapons, and consider extending a critical minerals agreement.
Corporate calendars are busy this week. U.S. company results due include networking equipment maker Cisco and semiconductor equipment firm Applied Materials. Heavyweights Nvidia and Walmart are scheduled to report later in the month. In Japan, after-market results on Monday are expected from SoftBank and shipper Nippon Yusen. U.S. home sales data is also due later on Monday.
Key developments that could influence markets on Monday:
- Earnings: SoftBank, Nippon Yusen, Fox Corp.
- Economics: U.S. home sales.