Wall Street faces mounting pressure as oil shock revives inflation fears, with the S&P 500 and Dow Jones pulling back sharply after recently hitting record highs. According to latest market reports, the Dow held up slightly better due to its heavier weighting in defensive and energy-related sectors, while the S&P 500 remained caught between strong AI earnings optimism and growing stagflation fears. Energy stocks were among the few bright spots as oil prices surged, but broader market sentiment weakened as investors worried that persistent inflation and tighter financial conditions could pressure economic growth later this year. Nasdaq continues to maintain a strong bullish structure with price extending its sharp recovery rally after rebounding from the major support zone near 23,000, but the index has now climbed firmly above several key Fibonacci resistance levels and is currently consolidating near the 0.618 retracement area around 28,500.
According to reports from Mirae Asset ShareKhan, spot gold declined 3.7% to $4,540 in the week ending May 15, starting the week on a weak footing as it tumbled to the cycle-low support at $4,480 in the Asian session on Monday. The metal erased its losses to trade higher as Iran's semi-official news Tasnim reported that the US has proposed a temporary waiver of sanctions on Iran's oil, which has been one of the key demands by Iran to open the Strait of Hormuz. As reported by Mirae Asset ShareKhan, spot gold rose 1% for the day to $4,584 before retreating as doubts over waiver emerged, with the metal trading with a gain of 0.2% at $4,547 at the time of writing. Latest reports indicate gold (XAU/USD) is trading flat above $4,500 on Monday, stabilising after a four-day sell-off from $4,770, with the metal retaining a bearish near-term bias following a nearly 4% decline last week.
According to reports from Mirae Asset ShareKhan, Brent oil futures traded between $106.87/barrel and $112 on Monday, with oil at $110.70 up by 1.5% for the day. The oil price recovery came after US President Trump said that Iran's new proposal is insufficient for a deal, stating that the proposal lacked detailed commitments over suspending uranium enrichment or handing over its enriched uranium pile. Earlier on Sunday, drones targeted a nuclear facility in UAE that prompted the US President to express his frustration over Iran, saying the clock is ticking for Iran. However, recent developments show an Iranian official lifted market sentiment on Monday, stating that Washington and Tehran are analysing a recent peace proposal. As reported by Mirae Asset ShareKhan, Iran's semi-official news Tasnim reported that the US has proposed a temporary waiver of sanctions on Iran's oil, which has been one of the key demands by Iran to open the Strait of Hormuz. Additionally, an Iranian official stated that Iranian and Omani technical teams were discussing options to restore safe transit through the Strait of Hormuz.
As reported by Mirae Asset ShareKhan, US's NAHB Housing Market Index (May) came in at 37 versus the estimate of 34, while China's April retail sales increased 0.2% year-on-year, trailing the estimate of 2%. Industrial production rose by 4.1% in April versus the estimate of 6% year-on-year. The silver lining was easing pace of decline in used home and new home prices, with new-home prices in 70 cities dropping 0.19% from March, the smallest drop in a year, and resale home values decreasing 0.23%, the slowest fall since March 2025. Latest economic data shows fast-rising inflation, coupled with solid economic data recently released, has boosted hopes of Federal Reserve rate hikes in late 2026 or early 2027. April PPI surged +1.4% MoM and +6% YoY, while Treasury yields climbed sharply, with the 10-year yield rising toward 4.6%, with higher yields pressuring equities because they increase borrowing costs and reduce the attractiveness of high-growth stocks.
According to reports from Mirae Asset ShareKhan, investors see 50% probability of a Fed rate hike by the year-end, while they assess that the Fed rate hike could come as early as March 2026. The US Dollar Index closed with a gain of 0.47% at 99.28 on May 15, surging by 1.5% in the week. Two-year yields, at 4.07%, were flat after erasing the rise to 4.10%, while ten-year yields rose by 3 bps to a fresh one-year high of 4.63% before trading flat at 4.60%. Latest market data shows US 10-year yields are trading at one-year highs at 4.60%, with the negative Moving Average Convergence Divergence (MACD) hinting at a slowing downside momentum rather than a clear reversal. Hotter-than-expected U.S. inflation data and rising oil prices have strengthened expectations that the Federal Reserve may keep interest rates higher for longer.
As reported by Mirae Asset ShareKhan, gold has been trading as a risk asset since the beginning of the Iran war on February 28 as safe haven bids have been trumped by quickly fading odds of a rate cut due to surge in oil prices. The firm Dollar and high yields will keep the upside limited in gold. In this scenario, unless oil prices come down on a concrete geopolitical development, selling into rallies with strict stop-loss is advisable. A breach of support at $4,480 will open the way to $4,345, with resistance at $4,610/$4,670. Latest technical analysis shows initial support lies at the $4,500 area (May 4, 18 lows) with a confirmation below this level renewing bearish momentum towards the March 26 low at the $4,350 area. Upside attempts remain capped below the $4,560 area, with the first relevant resistance area coming at previous lows around $4,640, ahead of May 7 and 12 highs at the mentioned $4,770.
