Trump-Xi summit looms as next big test for markets watching Iran war
Investors are circling the May 11-15 week as the next major deadline, with the Trump-Xi summit positioned to set the tone on the U.S.-Iran war. Equity markets have stayed unruffled in part because traders bet Trump is determined to end the fighting quickly.
Wall Street will spend the coming week reading the U.S.-Iran war through the lens of the Trump-Xi summit. Investors increasingly believe the White House needs Beijing's leverage to lock in a durable ceasefire with Tehran, and the tone of the meeting is expected to ripple through oil, defense and technology shares.
The S&P 500 has held near record highs precisely because traders are pricing the conflict as a transitory shock. Strategy notes circulating on Friday emphasised Trump's stated determination to wrap up the Hormuz crisis quickly, even as Tehran has yet to formally respond to Washington's latest proposal.
The week also brings inflation data, retail earnings and a heavy Federal Reserve speaker calendar. But for global allocators the real test is what Xi Jinping is willing to say publicly about Iran. Beijing's repeated calls for the strait to reopen as soon as possible give the summit its defining frame.
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