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At the end of Monday, the Dow Jones Index (US30) decreased by 0.21%, while the S&P 500 Index (US500) fell by 0.02%. The Nasdaq Technology Index (US100) closed positive 0.29%. Rising inflation expectations weighed on stocks after the New York Fed's 1-year inflation expectation rose by 26 bps to a 5-month high of 3.26% from 3.00% in March. Stocks were also impacted by hawkish comments from Fed Vice Chairman Jefferson when he said it was appropriate for the Fed to keep interest rates in a restrictive range.

Apple (AAPL) closed higher by more than 2% after it was reported that the company is close to an agreement to use OpenAI technology in Apple's upcoming iOS 18 mobile operating system.

Intel (INTC) shares rose more than 2% and led the Dow Jones Industrials Index after the Wall Street Journal reported that the company is negotiating a deal that would see Apollo Global Management provide more than $11 billion to build a chip factory in Ireland.

Equity markets in Europe mostly fell on Monday. Germany's DAX (DE40) fell by 0.16%, France's CAC 40 (FR40) closed down 0.12%, Spain's IBEX 35 (ES35) Index rose by 0.42%, and the UK's FTSE 100 (UK100) closed negative 0.22%.

The CAC 40 Index (FR40) closed at 8,209 on Monday, breaking its 6-day winning streak and retreating from a record high of 8,219. On the corporate front, Airbus saw the biggest drop in shares, with its stock down 1.4%.

WTI crude oil prices held above $79 a barrel on Tuesday after rising more than 1% in the previous session, helped by concerns over possible supply disruptions in Canada. Markets feared that Canada's wildfire season could affect the country's 3.3 million barrels per day production capacity. In the Middle East, Iraq's oil minister said over the weekend that the country would abide by OPEC+ policy on production cuts due at the upcoming June 1 meeting, reversing his previous statement that Iraq would not agree to any new production cuts.

Asian markets experienced both ups and downs yesterday. Japan's Nikkei 225 (JP225) was down 0.13%, China's FTSE China A50 (CHA50) lost 0.42%, Hong Kong's Hang Seng (HK50) was up 0.80%, and Australia's ASX 200 (AU200) was positive 0.01%.

Australia will release its budget today. The government is expected to announce another annual budget surplus thanks to strong employment figures. At the same time, traders will focus on the details of the planned cost of living cuts that are said to reduce consumer inflation temporarily. Treasurer Jim Chalmers said he expects the current core inflation rate of 3.6% to return to the Reserve Bank of Australia's (RBA) target of 2–3% by the end of the year. If this scenario works out, the Central Bank will likely cut interest rates sooner than markets expect.

Ahead of the PBOC's upcoming medium-term interest rate decision, the offshore yuan exchange rate is holding at 7.24 per dollar, the lowest in two weeks. Expectations are leaning towards the PBOC keeping the medium-term interest rate unchanged at 2.5% at tomorrow's meeting — the rate has been unchanged since August 2023, when 15 basis points cut it.

• S&P 500 (US500) 5,221.42 −1.26 (−0.024%)
• Dow Jones (US30) 39,431.51 −81.33 (−0.21%)
• DAX (DE40) 18,742.22 −30.63 (−0.16%)
• FTSE 100 (UK100) 8,414.99 −18.77 (−0.22%)
• USD Index 105.22 −0.09 (-0.09%)
   

Important events today:

• UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• German Consumer Price Index (m/m) at 09:00 (GMT+3);
• Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
• German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• US Producer Price Index (m/m) at 15:30 (GMT+3);
• US Fed Chair Powell Speaks at 17:00 (GMT+3).

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