Earnings season is winding down on Wall Street, yet investor focus remains largely detached from the escalating tensions in the Middle East. This week is pivotal, with the US inflation report set to influence the Federal Reserve’s monetary policy outlook, alongside Jerome Powell’s final days as Fed Chair. Market participants are keenly awaiting the US CPI inflation report for April, projected at 3.7%, nearly double the Fed’s target, which could complicate the central bank’s approach under new leadership.

Additionally, a high-stakes meeting between Donald Trump and Xi Jinping could reshape market dynamics. Investors are anticipating discussions on trade agreements that may bolster the China A50 index, which is nearing its highest levels since 2022. Meanwhile, oil prices remain volatile, with recent swings reflecting geopolitical uncertainties, although record-high US oil exports may alleviate some inventory pressures.

In summary, traders should keep a close eye on the CPI release and the outcomes of the Trump-Xi meeting, as both could significantly impact market sentiment and sector performance in the coming days.

Source: xtb.com