These are the early headlines and other items poised to influence the market at the start of trading Tuesday. As we share this collection of market drivers, U.S. equity futures point to a lower open, but we’ll want to revisit them following the April CPI report at 8:30 AM ET – see item 3
1. The cease-fire is entering its second month and, despite sporadic violence, has now lasted almost as long as the fighting which preceded it. There is little to indicate that either the U.S. or Iran is ready to compromise, but neither wants to start fighting again… or now, there remain significant gaps in the U.S. and Iranian positions over the future management of the Strait of Hormuz and the kind of constraints Tehran will accept on its future nuclear work and infrastructure… (WSJ)
Following the breakdown of peace talks between the U.S. and Iran, S&P Global analysts raised their oil price outlook for the rest of the year, now expecting WTI and Brent crude to remain well above prewar prices at $95 and $100 a barrel, respectively. And plastic costs are likely to remain elevated with them…
2. Consumers have reckoned with higher gasoline prices for months, but the impacts of the Iran war have quietly begun rippling through other sectors of the economy. In March, prices for polyethylene, the most commonly used plastic globally, rose to their highest point in nearly four years. That’s a problem for companies that need the material for their products, as they try to navigate what experts say is a “historic” plastic market. (Barron’s)
Back in April we talked about the “follow through” risk in the duration of the U.S.-Iran conflict, and we continue to see more on that front. Today’s April CPI report will showcase that, but in our view the April PPI report later this week will give us a read on inflation pressures building in the system.
3. Economists expect Tuesday’s April consumer price index to show headline inflation rose 0.59% from March and 3.7% from a year earlier, according to a survey by FactSet, nearly double the Federal Reserve’s 2% target. Core inflation, which excludes volatile food and energy prices, is expected to rise 0.3% for the month and 2.7% annually. But some economists think inflation could run even hotter than that, pointing to two drivers: a spike in shelter costs and rising airfares. (Barron’s)
In Friday’s Weekly Portfolio Roundup, we discussed the pop in ISM’s Price subindex found its April Manufacturing and Services reports, the impact on input costs and the sharp increase in selling prices. This suggests we could see a hotter print, especially for headline CPI.
When it comes specifically to airfares, they’ve continued to surge in May with reports indicating domestic prices up 15%–20% and international, 7%–14%. We’re also seeing higher baggage fees and fuel surcharges being implemented. The primary cause? Soaring jet fuel prices. In Q1 2026, U.S. airlines saw a 56% increase in jet fuel expenses, roughly $1.8 billion more than Q4 2025.
4. Peace and stability will be the public message when President Trump and China’s leader, Xi Jinping, meet in Beijing this week. But behind the diplomatic platitudes, both governments are quietly preparing for something harsher — a prolonged economic war, mapping vulnerabilities and sharpening tools to inflict pain on the other… Whether Mr. Xi and Mr. Trump can agree to place even modest guardrails on their expanding economic weapons will be a critical litmus test of whether their meeting succeeds. (NY Times)
With the Trump administration bringing more than a dozen CEOs to Trump’s summit with Xi Jinping, the event has the potential to unlock some regulatory hurdles, market access and other investment opportunities. Reports indicate “a critical precondition for companies to join the trip was having a “tangible ask” that promised a concrete outcome or handshake deal during or after the summit…” This suggests the Trump effort could be as much about business deal making as it is about easing geopolitical and trade tensions.
5. OpenAI said on Monday it is setting up a new company with more than $4 billion in initial investment to help organizations build and deploy artificial intelligence systems, and will acquire an AI consulting firm, Tomoro, to quickly scale up the unit. After its early models saw strong resonance with consumers, OpenAI has been working aggressively to sign corporate contracts and establish a large presence in the business world where its AI will see large-scale deployment. (Reuters)
Such a move was hinted at last week, and we continue to think inroads on this front by OpenAI, Anthropic, and others run the risk of reigniting investor questions and concerns for software stocks. Meanwhile, even before this move by OpenAI, data from S&P Global finds advances in AI are “complicating the exit outlook for private equity firms with long-held portfolio companies that operate in the software industry.” That likely speaks to valuation concerns and how AI might disrupt software revenue streams, forcing as move away from seat-based licensing.
6. Nelson Peltz’s Trian Fund Management is seeking investor backing for a bid to take US fast-food chain Wendy’s private, after the restaurant operator’s shares have fallen more than 40 per cent over the past year… Low valuations among listed restaurant operators have driven a wave of take-private interest in the sector in recent months. Denny’s earlier this year was taken private in a $620mn deal. Papa John’s is also considering takeover interest from Qatari-backed fund Irth Capital Management… (FT)
Lower-tier restaurant companies have been taking it on the chin as consumers cut back spending, input costs have been rising, and the competitive landscape has tightened. We’ve purposely avoided the space because of that combination, and while some private equity shops may see value over the long-term that doesn’t mean things will get any easier in the meantime.
7. Economic data today per TipRanks: NFIB Small Business Optimism Index (April), Consumer Price Index (April), ADP Employment Change Report (Weekly), Treasury Budget (April).
8. Companies reporting today per TipRanks: AM – Ferrari (RACE), Under Armour (UAA). PM – B&G Foods (BGS), Oklo (OKLO).
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At the time of publication, TheStreet Pro Portfolio had no positions in any securities mentioned.
