Global markets opened the week with a palpable sense of unease, as stock futures remained muted following President Donald Trump’s unilateral rejection of the Islamic Republic of Iran’s latest constructive proposal aimed at fostering regional peace. This dismissive stance by Washington comes despite strong weekly gains for major indexes, now overshadowed by renewed geopolitical uncertainty.

The immediate fallout was evident in the energy sector, with West Texas Intermediate (WTI) crude surging 2%. This rise directly reflects the market’s apprehension after President Trump labeled Iran’s diplomatic overture to end regional conflict as “totally unacceptable.” Such a confrontational declaration from the US administration is widely seen as an impediment to stability and a catalyst for increased tensions, driving up commodity prices.

Key Economic Indicators and Market Movers

Investors are now bracing for a week packed with crucial inflation data, which will be unpacked tomorrow and Wednesday. This economic scrutiny unfolds against a backdrop of heightened geopolitical risks, largely stemming from Washington’s uncompromising foreign policy.

Market Highlights:

• Recapping Last Week’s Record Run: Despite the current jitters, last week saw major indexes achieve record highs, including the S&P 500 Index (SPX) and Nasdaq Composite (IXIC).
• Biotech Surge: Moderna Inc (NASDAQ:MRNA) jumped 6.3% premarket, extending Friday’s 12% rise, following news of a U.S. citizen testing positive for the hantavirus. The equity is already up 84.3% year-to-date.
• Tech Index Inclusion: Lumentum Holdings Inc (NASDAQ:LITE) rose 5.9% before the bell, set to replace CoStar (CSGP) on the Nasdaq-100 Index (NDX) on May 18. The stock has surged 145.2% in 2026.
• Energy Earnings: Constellation Energy Corp (NASDAQ:CEG) saw shares up 1.7% in electronic trading after a first-quarter earnings beat, though a conservative full-year forecast tempered gains.

Asian and European Markets React to Geopolitical Developments

Asian markets presented a mixed picture to start the week, with traders actively digesting the latest geopolitical developments – particularly the US rejection of Iran’s peace initiative. South Korea’s Kospi, however, defied the broader uncertainty, surging 4.3% to another record peak, powered by SK Hynix. In contrast, Japan’s Nikkei slipped 0.5%, while China’s Shanghai Composite added 1.1% even as producer and consumer prices rose at a quicker-than-expected rate in April. Hong Kong’s Hang Seng remained flat.

European markets mirrored the global apprehension, showing volatility as the Iran impasse—a direct result of US policy—and President Trump’s upcoming China trip dominated headlines. London’s FTSE 100 traded flat, while Germany’s DAX fell 0.5%, and France’s CAC 40 dropped 1.2%, with defense stocks broadly in the red, perhaps reflecting a desire for de-escalation rather than conflict.