■ TL;DR
- Global equities closed at record highs on US-Iran progress, strong US data, and AI enthusiasm — but the harder week starts now.
- US CPI on Tuesday is the key macro event: don’t front-run it — react to the confirmed direction.
- Reform UK’s surge dented GBP and FTSE; watch Thursday’s 6AM GMT UK GDP data for the follow-through.
- Trump-Xi meetings drive semiconductors, AUD, and industrial metals — keep stops wider and size down ahead of the press conferences.
- Oil and Gold are in sideways mode; the edge is intraday swings and clean reactions at support and resistance.
■ Table of Contents
The week ended on Friday with global equities at record highs, thanks to positive momentum on the US-Iran front, excellent US indicators, and growing enthusiasm for AI-related equities. This upcoming one will be characterized by economic releases as the week begins, and presidential dramatics, as it ends.
US
Following stronger-than-expected nonfarm payrolls numbers last week, US stock markets are likely to be influenced by positive inflation and spending data, and expectations surrounding the Trump-Xi meeting as the week ends.
On Friday, FED heads optimistically stated that the US “banking system remained sound and resilient”, with hedge fund dealer leverage low, commercial real estate prices stabilizing, and the total debt to GDP ratio “falling to levels not seen since the early 2000s.”
■ What to Look Out For
Prop traders will most likely be looking at the week’s biggest macro release Tuesday — US CPI (inflation data). The stronger the results, the less likelihood of further FED cuts and hopes for a stronger USD. Assets that will react include the EURUSD, Gold, and indices like the DJIA and NASDAQ100. As always, avoid trading that first spike (or dip) and wait for a confirmed direction. Later in the week, Retail Sales will indicate consumer sentiments — pushing USD pairs and retail or consumer-based equities.
Europe
In Europe, Britain continues to reel from Reform UK’s 570-seat increase in council seats — an indication of the public’s displeasure with the current Labour-led government. 10-year bond yields dropped under 4.9%, and the GBP edged up.
■ Prop-Views
A quick look at the Pound Index shows a dramatic dip as results began coming in at 7:30pm but a steady recovery as the weekend drew near — a movement reflected in the FTSE, as the index dropped sharply, corrected, then continued its downward march as the week closed. However, prop traders should keep an eye on a long-term support level on Thursday, which could return the upward trend… or not. At 6AM GMT, the UK will be publishing GDP, industrial/manufacturing production, business investments, and its March trade balance — all to the benefit or bane of the GBP and its equity markets.
Asia
As the week draws to a close, prop traders should closely monitor the meetings between US President Donald Trump and Chinese President Xi Jinping. Talks on rare earths and technology will likely be pushed forward thanks to China’s surprising move in pressuring Iran to come to an agreement to end the current war — a more pragmatic stance on their part towards regional stability.
Aside from their geo-political move, Chinese regulators are pressuring banks to suspend loans to oil refiners sanctioned by the US. On the economic front, China’s trade surplus expanded 67% to $84.82 billion in April — far above investors’ expectations. Exports increased by 14.1% YoY while imports were up by 25.3%.
■ What to Prop-Are
Thursday-Friday, prop traders should pay close attention as leaders discuss AI-export restrictions, tariffs, and rare-earth supplies — but more so to the press conferences that follow. A conciliatory tone will push up semiconductor and hi-tech stocks, the Australian dollar (first to suffer when the two superpowers clash), Chinese equities, and industrial metals. The whipsaws will be headline-driven, so keep your stops wider, risk smaller position sizes, and if a position is large, close it overnight.
Stay close to the radio — the whipsaws will be headline-driven.
■ ■ ■
Commodities
The US became the world’s largest oil exporter in April, overtaking Saudi Arabia, and despite a mere 2-rig increase in Baker Hughes’ weekly count, WTI fell by $8.25 to $94.50 — this as Iraq offers crude at a 60% discount for anyone willing to risk transport through the Persian Gulf.
Gold volatility declined slightly to 18.8 from 19.3 on Friday and moved above its 21-day moving average, as the dollar weakened on Middle East optimism and central bank purchases. China’s People’s Bank, for example, pushed up its reserves for the 18th month in a row.
■ A Proper Slant
Traditionally, sideways markets are not incredibly attractive to investors seeking trends — but prop traders merely need movement. On the weekly chart, there is little that matters, but on the daily we still have those 1–3% intraday swings and sharp reactions to headlines that make for a clean technical setup. Pay close attention to support and resistance zones and repeated reactions at key levels. Beware of false breakouts and overtrading. And stay close to the radio.
Equities
Q1 US share earnings are at a 2-decade high — quite an achievement, and one usually characteristic of a post-recession recovery. The S&P 500 is up by more than 16% from March — that’s 8% for 2026, so far — and quarterly earnings have been the highest in four years.
Artificial intelligence is proving to be a disruptive force on software and information services. NVIDIA shares were up 2.7% on Friday morning, though that’s only about a 15% increase for 2026 so far — a number dwarfed by the 61% increase shown by the broader PHLX semiconductor index (covering the 30 largest US-traded semiconductor companies). Goldman Sachs analyst James Schneider remains optimistic, especially ahead of NVIDIA’s earnings reveal on May 20.
But that’s for another week…
■ Sources
- Stock Market Index — Major World Indices Live, Investing.com
- Dow Jones Today | DJIA Index Live, Investing.com
- Economic Calendar, Investing.com
- Wall Street Flags Dangers as Momentum Stocks Reach Extreme Levels, Bloomberg
- Gold has climbed back above a key trend line. Are more gains on the way?, MarketWatch
- As Nvidia earnings draw closer, here are 5 things investors need to watch, MarketWatch
- S&P 500 and Nasdaq notch records, boosted by AI and earnings optimism, Reuters
- Wall St Week Ahead: Data, Iran, US-China meeting in focus for scorching US stock market, Reuters
- Markets understate the scope for UK dysfunction, Reuters
About the Author
Barry Sadovsky is a leading Analyst covering the Financial Markets for the last 20 years. Find more about Barry on his LinkedIn Page →
