Wall Street Focused on Middle East Issues and Inflation Indicators [New York Stock Market Weekly Outlook]

Ongoing Concerns about Oil Price Surge Due to Middle East Tensions

May PCE to be Released on the 27th

This week (23rd–27th) on the New York Stock Exchange, issues in the Middle East and the May Personal Consumption Expenditures (PCE) price index are expected to be the biggest variables. Experts say that, regarding international oil prices, investors should pay attention to three points: ▲the mood for negotiations ▲trends in Iranian oil production ▲possibility of a blockade of the Strait of Hormuz. Oxford Economics analyzed that in the worst-case scenario, international oil prices could soar to $130 per barrel, and U.S. inflation could approach 6%.

The PCE price index, which is considered the most important inflation measure by the U.S. central bank, is also cited as a key indicator that will determine the market’s direction. Jerome Powell, Chair of the Federal Reserve, stated at a press conference after the FOMC regular meeting on the 18th that the impact of tariffs on prices is expected to manifest in earnest after the summer. The market expects the May PCE to rise by 0.2% from the previous month and by 2.3% from the same period last year. The PCE release date is the 27th.

Chair Powell is also scheduled for testimony before Congress over two days. This follows the semiannual monetary policy report. Through this testimony, Powell is officially expected to explain the status of the U.S. economy and monetary policy operations, and to state his stance on internal and external risks and the future interest rate trajectory.

On the first trading day, the 23rd, preliminary U.S. manufacturing and services Purchasing Managers' Index (PMI) readings, announced by Standard & Poor's in June, will be released. These are representative indicators to gauge business conditions in the U.S. On the 24th, S&P CoreLogic will release the Case-Shiller Home Price Index. Major U.S. companies are also scheduled to announce their earnings results.

FedEx (24th), Micron Technology and General Mills (25th), McCormick & Company, Walgreens Boots Alliance, and Nike (26th) are set to announce their earnings. Micron Technology’s results are regarded as an indicator for the semiconductor sector, while Nike’s results provide insight into consumer strength and the impact of tariffs.

New York = ShinYoung Park, Correspondent nyusos@hankyung.com