• A quiet start to the week, as key markets are closed
• All eyes on S&P 500 after nine consecutive positive sessions
• Aussie benefits from Labour’s win, climbs against the US dollar
• Gold stabilizes, but oil suffers again from OPEC+ reports

Quiet Start as Most Key Asian Markets Are Closed

A rather steady start to the week, as most key Asian markets - predominantly China and Japan - are closed for bank holidays. The low liquidity conditions will most likely continue during the European session, as UK-based market participants are enjoying their Early May bank holiday.

Nevertheless, investors’ eyes will be glued to US stocks screens, curious to see if both the S&P 500 and the traditional Dow Jones indices achieve a record-breaking tenth consecutive positive session.

Despite their impressive performance, both indices have yet to fully recover from their recent corrections and are still around 8% below their recent highs.

Fed Meeting on Wednesday, But Tariff Talks Could Steal the Limelight

Stock performance this week will depend, among other factors, on the usual tariff rhetoric from US President Trump and the Fed meeting . On Wednesday, Chair Powell et al are expected to maintain their current “wait-and-see” approach, as they continue to seek clarity about the final tariff regime. No rate move is expected this week.

However, it is evident that growth momentum has slowed following last week’s Q1 GDP report, and that inflation continues to edge higher, especially when considering business surveys and consumer sentiment indicators. Friday’s stronger jobs report has diminished the possibility of a dovish tilt on Wednesday, with the market focused on whether the Fed still believes that inflation will be transitory.

Any possible disappointment from the lack of dovish Fed commentary might be tempered by tariff headlines, provided that Trump does not reverse his recent emollient approach and threaten again to replace Powell before May 2026.

Interestingly, over the weekend, Trump indicated that tariffs on Chinese imports are going to be lowered ‘at some point’. However, with no call scheduled with President Xi for this week, the path to a deal could be an arduous process. Having said that, US officials are frantically preparing to announce the first trade deal, setting the scene for a plethora of trade agreements to be announced during May, and allowing Trump to claim another victory.

Labour Party Wins Australian Election, Aussie Rallies

Meanwhile, Trump continues to greatly impact elections elsewhere, with most Conservative parties being punished for their ‘association’ with Trump. Following the Liberal party’s win in Canada, the Labour Party won the Australian election, increasing its seat tally and growing its majority. Apart from the usual domestic reasons, i.e. cost of living, the main opposition coalition suffered from pushing an agenda that resembled Trump’s policies.

The Aussie has welcomed the result, with the Aussie/US dollar pair climbing to 0.6473 at the time of writing, around 7% above the early April lows. Having said that, the US dollar had a decent performance last week, rallying against the euro , the pound , and, particularly, versus the yen .

Gold Stabilized, Oil Retreats

With most market participants feeling more confident about the outlook due to Trump’s less aggressive rhetoric, gold touched $3,200 last week, recording a $300 drop since the intraday record high on April 22. However, gold’s uptrend appears to be intact, and until there are significant developments in the Ukraine-US-Russia negotiations, gold could still enjoy strongly positive sessions.

On the flip side, oil is recording another negative session, retesting the early April lows, as the OPEC+ alliance is ready to continue unwinding its voluntary production cuts. Saudi Arabia is apparently trying to pressure noncompliant members to meet their production quotas, although there is speculation about the true reasons behind these production increases. With global demand growth remaining low, the planned supply increases are exerting strong downward pressure on oil prices.