Iran has responded to a US proposal through Pakistani mediators while rejecting claims of surrender during ongoing diplomatic discussions. According to reports from The Kobeissi Letter, Iranian President Masoud Pezeshkian stated that negotiations would not represent surrender or retreat, emphasizing that Iran would 'never bow' to external pressure while defending national interests. The Iranian response adds to market uncertainty as traders monitor whether diplomatic discussions reduce or increase geopolitical pressure in coming days. Recent developments show signals that the White House may reach a resolution with Iran, which has weighed on West Texas Intermediate futures, the U.S. crude oil benchmark. This potential diplomatic thaw comes as markets prepare for major economic data releases this week.
Markets are preparing for several major US data releases this week, including April CPI inflation data scheduled for Tuesday and PPI inflation figures on Wednesday. As reported by The Kobeissi Letter, retail sales data and industrial production numbers will follow later in the week. According to Bloomberg estimates, economists expect headline inflation to jump from 3.3% to 3.8% due to oil shock impacts, while core CPI (excluding energy and food) is forecast to rise to 2.7% from March's 2.6%. The March CPI report showed a more-than-20% jump in energy prices, though it didn't trigger a jump in other prices. Oil, gas and diesel prices have surged as the war limits access to the Strait of Hormuz, a waterway typically used to transport one-fifth of the world's oil and gas supply.
Investors will also look for insights on consumer spending through April retail sales data scheduled for Thursday, which will offer the latest indication of how prices paid by consumers are changing. Americans initially weathered $4.50 gas prices relatively well, with consumers spending 15.5% more at gas stations in March than in February, but had enough left over to fuel sales growth in several other retail categories. However, there have been signs that consumers may be growing cautious, with the pace of personal spending slowing last quarter and people spending more on cars and household equipment, potentially a bid to get ahead of expected price hikes. Unlike other retailers, clothing and miscellaneous stores saw sales fall last month, and investors may get fresh insight on this sector when sportswear companies Under Armour and On Holding report, as well as Birkenstock and Asics. Klarna, the buy now, pay later firm, is also set to report Thursday, with Americans traditionally using Klarna products to buy clothing and accessories.
US markets closed Friday with strong gains, with the S&P 500 and Nasdaq Composite ending Friday at record highs. The S&P 500 up 0.8% for the week and Nasdaq finishing 1.7% higher for a 4.5% weekly return. The Dow Jones closed flat on Friday but ended 0.4% higher for the week. Tech stocks rose on upbeat outlooks from chip and server makers, as well as signals that the White House may reach a resolution with Iran. A stronger-than-expected April jobs report showed that fears of an imminent downturn in the US labor market have been misplaced, even as tech companies continue cutting roles amid AI developments. Semiconductor stocks and companies feeding America's AI build-out continued to drive market action this week.
Bitcoin (BTC) traded near the $80,000 region ahead of the macro-heavy week, according to crypto.news price data. The cryptocurrency is holding above major short-term support despite recent market swings. Crypto traders continue watching whether inflation data and geopolitical developments push investors toward risk assets or trigger another defensive move across financial markets. Some analysts believe lower inflation could support Bitcoin and equities if expectations for easier monetary policy return, while others remain cautious as global tensions and economic uncertainty continue affecting investor sentiment across crypto and traditional markets.
