From Yahoo Finance: 2025-05-16 07:19:00

Wall Street stocks are expected to continue this week’s gains, driven by hopes of trade de-escalation and soft April inflation data. U.S. and global markets are closely watching the economy and policymaking amidst ongoing uncertainty. Russian and Ukrainian negotiators met in Istanbul for the first peace talks in over three years, pressured by U.S. President Trump. Deals totaling over $200 billion were announced between the U.S. and the United Arab Emirates, including a $14.5 billion commitment between Boeing, GE Aerospace, and Etihad Airways. India is considering increasing water from a major river as retaliation for a deadly attack blamed on Pakistan. The gradual decline in U.S. inflation has led to rising ‘real’ borrowing costs, impacting monetary policy and financial conditions. China’s focus on expanding export markets in the Global South is creating a new ‘China shock’ as regional manufacturers struggle to compete.

The S&P 500 has returned to positive territory for the year, with futures pointing to further gains. U.S. tech and aircraft firms received a boost from new orders in the Middle East. A drop in April U.S. producer prices led to a Treasury rally and a decline in the dollar. Walmart’s earnings outlook suggests potential price increases due to tariffs. U.S. import and export prices for April are set to be published, along with consumer sentiment data. The Federal Reserve is reviewing its strategic monetary policy stance, considering changes due to supply-side shifts in the economy. European stocks climbed, with the STOXX 600 index poised for a fifth weekly advance. Russian and Ukrainian negotiators are meeting in Istanbul for peace talks, while Chinese and Hong Kong stocks dropped on renewed U.S.-China tensions and disappointing earnings from Alibaba.

Federal Reserve Chair Powell highlighted significant changes in the economic environment since 2020, suggesting a potential shift in the Fed’s approach to inflation targeting. Events to watch include U.S. housing starts/permits, import/export prices, consumer sentiment survey, and foreign holdings of Treasuries data. The Fed’s two-day conference on its monetary policy framework review continues, with speeches from Fed presidents and the ECB chief economist. Trump concludes his Middle East tour in the UAE. The author’s opinions do not reflect Reuters News views.



Read more at Yahoo Finance: Morning Bid: Trade and inflation relief