Wall Street Watches US-Iran Peace Talks, April Jobs Report; Shanghai Eyes Services Momentum

Wall Street is set to focus this week on progress in US-Iran peace talks and the health of the US labor market. Iran has faced deepening economic strain since the war began, with inflation surging and the rial weakening sharply against the dollar. That pressure could push the two sides to move quickly into a second round of peace negotiations. Another key event is the US April nonfarm payrolls report due on May 8. A solid reading would help ease stagflation concerns even as inflation accelerates.

FactSet estimates April nonfarm payroll growth at just 50,000. That would be far below the 178,000 added in the previous month. The unemployment rate is forecast to hold at 4.3%. Fed funds futures are pricing in a 77.7% chance that the benchmark rate will remain unchanged through the end of December, according to CME Group's FedWatch tool. Earnings from AI and semiconductor-related companies, including Palantir and AMD, are also due this week.

In Shanghai, April manufacturing purchasing managers' index data came in at 52.2, beating expectations and bolstering hopes for an economic recovery. The next test is the Caixin services PMI due on May 6 and whether it can extend that momentum. If services activity also remains in expansion territory, the view that the economy has bottomed out could gain traction and provide stronger fuel for a rebound.

China's April trade balance, due on May 7, is another key variable. Markets expect export growth to show a modest recovery. Inflows into technology and resource stocks have become more pronounced recently. If the trade data confirms resilience in advanced manufacturing and IT exports, a rally led by those sectors could continue.

Park Shin-young, New York correspondent, Hankyung.com nyusos@hankyung.com