As in previous weeks, geopolitical risks are likely to continue to accompany investors given the ongoing Iran conflict. Whether the US indices S&P 500 and Nasdaq 100 can build on their record-breaking rally from last week remains to be seen. The hope for a diplomatic solution between Washington and Tehran must ultimately prove to be true.
This week, investors are primarily focused on US inflation data, which could provide signals regarding monetary policy. Additionally, a planned meeting between US President Donald Trump and his counterpart Xi Jinping is likely to cast a shadow.
Dow Jones Industrial Average Index
The Middle East conflict remains unresolved – tensions between the USA and Iran could increase again
The Iran War remains unresolved. „I just read the response of the so-called ‘representatives‘ of Iran. I don't like it - completely unacceptable,“ Trump wrote on his platform Truth Social. With this, Trump rejects an Iranian proposal for peace talks to resolve the conflict. The latest peace efforts between the US and Iran have likely received a setback.
First time since 2017: A US President visits China
A planned meeting between Donald Trump and Xi Jinping is also expected to attract interest this week. According to the Chinese Foreign Ministry, Trump will be visiting from Wednesday to Friday at the invitation of China's Head of State and Party Leader. This is also the first visit by a US president since 2017. In addition to trade policy, the Middle East conflict could also be one of the topics of discussion.
US inflation in focus on Tuesday – further price data ahead
US inflation data will be in focus on Tuesday (2:30 PM). Economists expect a inflation rate of 3.4 percent compared to the previous year's month, after 3.3 percent in March. The core inflation rate, which excludes the drivers energy and food, could rise by 0.4 percent compared to the previous month (previously: 0.2 percent). This rate is considered a benchmark for US monetary policymakers with regard to inflation assessment.
Also important inflation data are on the agenda on Wednesday with the US producer price data (2:30 PM).
On Thursday, the release of new US retail sales data (2:30 PM) should be exciting.
Earnings season continues – company figures could provide impetus
In the ongoing US earnings season, Wednesday's focus will be on the results of Alibaba Group (ISIN: US01609W1027) and Cisco Systems (ISIN: US17275R1023) for the past business quarter. On Thursday, Applied Materials (ISIN: US0382221051) will report.
