Wall Street reopens after a long Memorial Day weekend to a heavy macro calendar, ongoing US-Iran negotiations punctuated by fresh military strikes, and a market sitting just shy of all-time highs.
The S&P 500 (SPY) closed Friday at $745.64, up 0.39% for the session and within striking distance of its 52-week high of $749.53. The Nasdaq (QQQ) finished at $717.54, the Dow (DIA) at $506.12, and the small-cap Russell 2000 (IWM) surged nearly 1% to $285.12 — continuing a pro-cyclical rotation. Volatility remains subdued, with the VIX at 16.59.
US strikes in southern Iran
The most dramatic development came Monday while US markets were closed. US Central Command announced "self-defense strikes" in southern Iran, hitting missile launch sites and Iranian boats attempting to lay mines in the Strait of Hormuz.
The strikes add a volatile dimension to ongoing negotiations. According to reports, the US and Iran are discussing a deal that would extend the ceasefire for 60 days and reopen the Strait of Hormuz within 30 days of signing. Secretary of State Marco Rubio said a deal is "within days" and emphasized that the strikes don't preclude a diplomatic resolution.
Crude oil slumped nearly 7% on Monday to $92.10 a barrel before recovering partially in Asian trading. The move came as traders weighed the possibility of de-escalation against continued military friction. Iran's Foreign Ministry spokesperson said negotiations continue through Qatari and Pakistani mediation.
What to watch this week
A heavy macro calendar awaits:
- Tuesday (today): Conference Board Consumer Confidence (May), Chicago Fed National Activity Index (April), Dallas Fed Manufacturing Index (May)
- Wednesday: Fed minutes from the latest FOMC meeting
- Thursday: Durable goods orders (April), second GDP reading for Q1, pending home sales
- Friday: April PCE inflation — the Fed's preferred gauge and the week's most important number
The 10-year Treasury yield sits at 4.56%, slightly off last week's high of 4.67%. Goldman Sachs' head of hedge fund coverage, Tony Pasquariello, warned Friday that "the summer is going to be a bit trickier" and that "bonds are starting to intimidate stocks."
Stocks in focus
Apple (AAPL) gained 1.26% Friday to $308.82, continuing positive momentum around product launches. Tesla (TSLA) jumped nearly 2% to $426.01. NVIDIA (NVDA) dropped 1.9% to $215.33, part of ongoing volatility in semiconductor names after several up days.
Goldman Sachs CEO David Solomon published an op-ed in the New York Times arguing that "the AI job apocalypse is overblown," joining a16z co-founder Marc Andreessen in pushing back against doomer narratives. Solomon argues AI will boost productivity and create new roles rather than eliminate jobs en masse.
SpaceX enters AI compute business
Elon Musk said SpaceX is actively seeking more AI compute customers after its deal with Anthropic, offering large-scale GPU compute as a service. The move comes as hyperscale data center capex continues to surge, with over $700 billion in planned spending.
The bottom line
Markets open cautiously optimistic after the long weekend, with investors waiting for a potential Iran deal that could reshape energy prices, alongside Friday's critical PCE print. Yields are easing slightly and stocks are near record highs — but Goldman's warnings and geopolitical friction leave room for caution as summer approaches.
