US equity investors will monitor closely ongoing talks in the Middle East to end the Iran war, as continued closure of the Strait of Hormuz fuels inflation concerns and Q1 earnings begin to wind down.
* The US military carried out what it called "self-defense strikes" targeting Iranian missile launch sites and boats around the Strait of Hormuz, CNN reported Tuesday.
* The strikes came hours after Iranian negotiators met with Qatari mediators in Doha for talks in coordination with the US, CNN reported. The US and Iran are working toward a "memorandum of understanding," but disputes over language concerning Iran's nuclear program and sanctions have held up a deal, the news report said.
* Investors will watch out for the personal consumption expenditures price index this week, shortened by the Memorial Day holiday. Other indicators include initial jobless claims, the Consumer Board's consumer confidence index, and the preliminary read on Q1 gross domestic product growth.
* Investors will look out for the views of Fed officials on the speaking circuit this week, including Fed Vice Chairs Michelle Bowman and Philip Jefferson, Fed Board Member Lisa Cook, New York Fed President John Williams, Dallas Fed President Lorie Logan, and Philadelphia Fed President Anna Paulson.
* "Bonds have cheapened partly because markets have pivoted toward pricing Fed rate hikes," a Scotiabank note said Friday, referring to the surge in the 30-year to its highest since 2007. "A little over a quarter point of rate hikes is priced into year-end and early next year compared to early March when markets were leaning toward pricing 50--75bps of cuts."
* Quarterly earnings due this week include AutoZone (AZO), Marvell Technology (MRVL), Salesforce (CRM), and Costco Wholesale (COST). S&P 500 earnings have soared by about 29% year-over-year, versus almost 13% set out as of March 31, based on over quarterly results from about 95% firms that have reported, a DA Davidson note said on Friday.