Hope for peace between the U.S. and Iran is dashed, as U.S. inflation data is about to be released—Market trend analysis

Investing.com — U.S. stock index futures remain subdued, with Iran-U.S. negotiations at a standstill, making it difficult to achieve breakthroughs in the short term. Oil prices have rebounded above $105 per barrel, fueling ongoing inflation concerns, as markets closely watch upcoming U.S. consumer price data. Meanwhile, reports indicate that Republican lawmakers are investigating OpenAI CEO Sam Altman’s business dealings, ahead of the company’s potential initial public offering later this year.

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1. Futures decline

On Tuesday, U.S. stock index futures generally fell as investors remained cautious amid turmoil in Middle East ceasefire talks and the upcoming release of U.S. inflation data.

At 3:28 a.m. Eastern Time (15:28 Beijing time), Dow futures dropped 71 points, down 0.1%; S&P 500 futures fell 25 points, down 0.3%; Nasdaq 100 futures declined 193 points, down 0.7%.

Major Wall Street indices closed slightly higher in the previous trading day. The continued strength of chip stocks supported the market, and enthusiasm around artificial intelligence remained resilient despite ongoing geopolitical tensions.

However, analysts at Vital Knowledge pointed out that internal market trends “are not so bright, with equal-weighted S&P 500 underperforming,” while U.S. Treasury yields surged significantly, and global oil benchmarks like Brent crude continued to rise.

In their research report, Vital Knowledge analysts stated: “We continue to believe that the price trends for chips and related components have been severely overextended and are unsustainable. Even if an Iran deal is ultimately reached, the market reaction is more likely to be a ‘sell the news’ type of decline rather than a further rally, as the market has largely priced in the expectation of an agreement.”

2. Iran-U.S. negotiations hit a dead end

However, expectations for a breakthrough in negotiations have significantly diminished.

On Monday, U.S. President Trump told reporters that after rejecting Iran’s response to the peace proposal, the Iran-U.S. ceasefire agreement is in a “very dangerous” situation.

Trump dismissed Iran’s counter-proposal with tough language, calling it “unacceptable,” and further described it as “a pile of trash,” saying it’s not even worth reading in full. The counter-proposal is similar to Iran’s previous proposal.

Meanwhile, signs indicate that the confrontation between the two sides is escalating again. According to CNN, Trump, who is impatient with the slow progress of negotiations, is now seriously considering restarting large-scale military operations.

Some analysts believe that Trump’s upcoming trip to China and meetings with Chinese top leaders could help break the deadlock. The logic is that China, as Iran’s main importer of crude oil, might play a guarantor role in any long-term peace agreement.

Whether this is wishful thinking or a feasible plan remains uncertain. In any case, the future of this globally significant conflict remains shrouded in uncertainty.

3. Oil prices rise

One key impact is the movement of oil prices. Since late February this year, when the U.S. and Israel jointly launched military strikes against Iran, oil prices have surged sharply.

The main reason for the rise is the long-term de facto blockade of the Strait of Hormuz. This narrow waterway off Iran’s southern coast carries about one-fifth of global oil transportation. Currently, both the U.S. and Iran have imposed blockades on the strait, severely affecting crude oil supplies to many countries worldwide.

Trump’s statements suggest that the situation is unlikely to be resolved in the short term, and oil prices resumed their upward trend on Tuesday.

Brent crude futures rose by 2.0% to $106.30 per barrel, well above the pre-war level of around $70 per barrel.

4. U.S. inflation data to be released soon

The sharp rise in oil prices has heightened concerns about a rebound in inflation and strengthened market expectations that the Federal Reserve may raise interest rates.

As a result, markets will closely watch the U.S. monthly consumer price data on Tuesday.

The overall Consumer Price Index (CPI) for April is expected to accelerate to 3.7% year-over-year. In March, the data had already risen to 3.3%, mainly driven by a sharp increase in gasoline prices.

On a month-over-month basis, CPI is expected to slow from 0.9% to 0.6%.

Analysts are also paying close attention to whether energy shocks are pushing up prices of other goods beyond gasoline. Excluding volatile items like food and energy, the “core” CPI is forecasted to grow 2.7% year-over-year and 0.3% month-over-month, compared to 2.6% and 0.2% last month.

ING strategists noted in a report that “the core CPI data is ultimately the most important indicator for the Fed.”

“However, it may still be too early to see clear evidence of energy shocks transmitting to broader price levels,” they wrote.

5. Sam Altman’s business dealings under scrutiny by Republicans — The Wall Street Journal

According to The Wall Street Journal on Monday evening, Republican lawmakers and several Republican state attorneys general are investigating OpenAI CEO Sam Altman’s business dealings ahead of the company’s anticipated IPO.

The WSJ reports that the Republican-led House Oversight Committee has launched an investigation into potential conflicts of interest between Altman’s personal investments and OpenAI’s commercial partnerships.

The committee has reportedly sent a letter to OpenAI requesting documents related to corporate governance practices and potential conflicts of interest involving Altman’s investments.

The WSJ also states that six Republican state attorneys general from Florida, Montana, Nebraska, Iowa, West Virginia, and Louisiana have jointly urged the U.S. Securities and Exchange Commission (SEC) to review OpenAI’s corporate governance before proceeding with its IPO.

This investigation follows a previous WSJ report detailing how Altman has promoted OpenAI’s support for his personal investments, including fusion startup Helion and aerospace company Stoke Space.

This article was translated with the assistance of artificial intelligence. For more information, see our Terms of Use.