US equity futures are off a touch as the US/IranIran failed to consummate a deal, which is boosting Energy commodities and bond yields. Still, stocks have withstood the resulting increase in oil prices and higher bond yields as the market remains focused on the memory/semi stock bubble. As of 8:00am ET, S&P and Nasdaq 100 futures are down fractionally asTrump and Iran rejected each other’s latest peace proposals to end the 10-week conflict as the two sides struggle to maintain a fragile ceasefire.In premarket trading, semis are bid again after surging to a record high on Friday, Mag7 are mostly lower as early action points to Defensive positioning with Energy plays acting as a long hedge. European stocks are lower, reversing earlier gains in Asia, there driven by the AI Theme / Memory as Korean indices added 4-5%, and were briefly halted at the +5% trigger. Bond yields higher across the world on fears of an oil-driven inflation shock and expectations of central banks tightening monetary policy. The 10-year Treasury rate rose four basis points to 4.39%. The dollar edged 0.1% higher, while gold dipped below $4,700 an ounce. In commodities, the Energy complex is leading but WTI remains below $100/bbl, and off session highs, silver is outpacing gold as base metals are bid, and Ags are mixed. Today’s macro data focus is on existing home sales (10am ET) before kicking off a data-heavy week highlights by CPI, PPI, and Retail Sales. Fed speaker slate empty for the session.

In premarket trading, Mag 7 stocks are mostly lower:Apple +0.2%, Meta -0.6%, Microsoft -0.8%, Amazon -0.6%, Nvidia -0.5%, Alphabet -0.9%, Tesla -0.6%

Global equities are trading at record highs following a narrow tech-led rally that’s been driven by strong earnings and resurgent optimism around artificial intelligence, even as the war continues. This week, investors will be watching Trump’s visit to China’s Xi Jinping to see whether they can influence the situation surrounding the conflict.

The high in stock markets “does make sense,” Grace Peters, global head of investment strategy at JPMorgan Private Bank, told Bloomberg TV. “The underlying driver is more capex being spent. That’s not just associated with the AI buildout, but governments directing capital and companies following suit.”

The modest moves in futures signal traders are pausing for breath after 6 straight weeks higher, as they break down the latest Iran war news before a spate of key economic readings. With most of the earnings season in the rear-view mirror, much of the focus this week is on the CPI print Tuesday, Wednesday’s PPI numbers and retail sales on Thursday. Bloomberg Economics expects April CPI to moderate from March’s strong pace to a monthly increase of 0.6% - still pretty hot. Core CPI should also be elevated, but not because of the Iran war or tariffs. In fact,many tariff-related goods have seen deflation. Rather, core strength will be driven by a rectification of the artificial understatement in shelter CPI from the government shutdown last October.“The market melt-up driven by robust earnings, AI enthusiasm and hopes for a short-lived energy shock faces a tougher test in the week ahead,”according to Laura Cooper, head of macro credit at Nuveen. “Hotter US inflation could push yields higher, while weaker retail sales may begin to reveal the impact of higher gas prices on consumers,” she added.

The oil market is in “a race against time” as the factors that combined to curb price rises from the Iran war stand to come under strain if the Strait of Hormuz stays closed into June, according to Morgan Stanley. Still, Bloomberg lists four "shock absorbers" that can help prevent crude reaching $200 per barrel.

Turning to the only driver for stocks, AI is increasingly “eating the global earnings cycle,” notes Bloomberg Intelligence analyst Izabella Wieckowska. A narrow group of AI-linked companies is doing much of the heavy lifting for global profit growth while large parts of the broader market struggle to keep pace. Meanwhile, BI’s scenario shows a 32% surge in 2026 AI-driven demand for electrical infrastructure to reach $117 billion by 2030, a compound annual growth rate of 18%. The narrowing trend within the stock market is likely to sustain moving forward, according to Citi strategists, who have upgraded US stocks to an overweight. The first-quarter earnings season shows an ongoing shift in corporate spending priorities to capex from buybacks, according to Goldman Sachs strategists.

Meanwhile, a multi-asset Pictet fund has sharply raised its equity exposure, shifting as much as 30% of its cash-equivalent holdings into AI heavyweights across Asia and the US. With the Kospi index surging to new highs on Monday, equity-derivatives strategists are increasingly recommending trades to bet on more gains in tech-heavy South Korea and Taiwan markets. Strategists at Societe Generale note the 12‑month variance spread between the Kospi 200 and S&P 500 has reached extreme levels.

In private credit, a recent wave of investor redemption requests across the $1.8 trillion market for private credit prompted Blackstone to enlist senior executives in putting up capital to bolster its flagship fund.

Taking a look at the waning earnings season, of the 446 S&P 500 companies to have reported so far, 83% have beaten analysts’ estimates, while 11% have missed. Barrick Mining and Constellation Energy are among companies expected to report results before the market open. Barrick Mining’s gold output could fall for the fifth straight quarter to 680,000 ounces, according to data compiled by Bloomberg. Bloomberg Intelligence projects this quarter will be its weakest gold production level in 2026, as the company resets its operating model. Simon Property and Him & Hers Health follow later in the day.

Source: ZeroHedge News