Market Summary - US Futures Dip as US-Iran Peace Deal Hopes Dim

Key Takeaways

• US futures edged lower as Donald Trump rejected Iran’s peace response, dampening hopes for a formal agreement.
• Stronger-than-expected US April jobs data reinforced the "higher for longer" interest rate narrative, reducing expectations for Federal Reserve rate cuts in 2026.
• The AI-driven equity rally remains intact globally, supported by semiconductor momentum and new industrial AI initiatives.

Top Macro Headlines

• Trump Rejects Iran Peace Response: President Trump deemed Iran's response to the US peace proposal 'unacceptable', casting doubt on a formal treaty.
• US Jobs Report Defies Expectations: April employment report showed 115K jobs added, significantly above the 62K consensus, leading to speculation that the Fed may not cut rates in 2026.
• US-Iran Ceasefire Holds: Despite recent exchanges of fire, both sides indicated a desire to avoid escalation.
• Apple & Intel's Chip Pact: Apple is reportedly in talks with Intel to produce chips, highlighting the ongoing AI hardware supercycle.
• Yuan Hits 3-Year Highs: The Chinese yuan strengthened ahead of the upcoming summit between Trump and Xi Jinping.
• Bezos Targets Industrial AI: Jeff Bezos is raising $10 billion to develop AI models for production physics.

Key Macro Themes

• No Rate Cuts Reality: The strong jobs report and persistent inflation have solidified the "higher for longer" narrative, with markets pricing out Fed easing for 2026.
• Complex Geopolitics: The ceasefire holds, but diplomatic tensions remain, keeping risk premiums elevated in energy and defense sectors.
• AI Capex Expansion: The AI boom is broadening beyond Silicon Valley, with significant investments projected in industrial AI applications.

Global Market Impact

Equities

Wall Street saw gains on Friday, with the S&P 500 rising. However, futures dipped 0.2% in early Asian trading following Trump's rejection of the Iran deal.

Fixed Income

The strong jobs report has put pressure on the bond market, with the 30-year US bond yield supported at 4.90%.

FX

The Japanese Yen remains volatile, while the Yuan serves as a regional anchor at three-year highs.

Commodities

Gold remains subdued below its 50-day moving average, while crude oil fluctuates near the $100 mark.

Asia Pacific Impact

Asian tech stocks are central to the bull run, with South Korea's KOSPI crossing 7,000. Mixed performances were noted across major indices.

Top 3 Events to Watch Today

• China Inflation Rate & PPI (Apr) - 9:30 am SGT
• US Existing Home Sales (Apr) - 10:00 pm SGT
• Geopolitical updates on the US-Iran peace proposal

Chart of the Day

The Nasdaq 100 is at risk of a minor corrective decline, with key resistance levels identified. A break below 28,835 could expose further downside.