Growing concerns about a renewed military escalation in the Iran conflict are likely to keep market participants preoccupied at the beginning of the week. Investors could be slowed down by a cocktail of geopolitical risks, inflation fears, and interest rate worries.
Additional headwinds also threaten from the oil market. The recent oil price peaks are fueling new inflation fears and thus weighing on the general interest rate cut fantasy.
Besides the release of the Fed minutes, the expected publication of the quarterly figures from AI chip manufacturer NVIDIA is likely to cast its shadow.
Trump calls on Tehran to reach an agreement – Geopolitical risks rise again
US President Donald Trump has once again called on Iran to reach an agreement. „The clock is ticking for Iran, and they had better move quickly, or there will be nothing left of them,“ Trump wrote via Truth Social.
As early as April, the US President had threatened Tehran in a similar way. However, a ceasefire had taken effect just one day later.
Geopolitical uncertainty is likely to continue, especially after last week's Trump-Xi summit. No decisive impetus for de-escalation could be generated in Beijing either. Investors had hoped that China could act as a potential mediator in the Iran conflict and contribute to a peace agreement. The de facto blockade of the Strait of Hormuz, in particular, is likely to cause concern among investors.
Fed Minutes on Wednesday in Focus – Monetary Policy Could Attract Increased Attention Again
Midweek, the so-called „FOMC Minutes“ will be in the spotlight (8:00 PM), which investors should scrutinize for monetary policy clues.
In this context, monetary policy developments are likely to be increasingly in focus again, especially since inflation and interest rate concerns are not off the table anyway, given the ongoing Iran conflict.
The US central bank Federal Reserve (Fed) will next decide on the future key interest rate level as early as June 17. According to the CME Group's „Fed Watch Tool,“ 99.1 percent of market participants expect an interest rate pause and 0.9 percent expect a quarter-percentage-point interest rate cut.
Purchasing manager and weekly initial jobless claims in the US on Thursday in focus
Purchasing managers from S&P Global for the manufacturing, services, and „all“ sectors will be in focus on Thursday.
Usually, the weekly initial jobless claims in the US are also released on Thursdays (2:30 PM).
Earnings season ahead: All eyes on NVIDIA's numbers
In the earnings season, the focus on Tuesday will be on the figures from Home Depot (ISIN: US4370761029), on Wednesday from NVIDIA (ISIN: US67066G1040), and on Thursday from Deere & Co (ISIN: US2441991054), Nio (ISIN: KYG6525F1028), and Walmart (ISIN: US9311421039).
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