The stakes are high next week as President Donald Trump endeavors to put the Iran war behind him before he meets with Chinese President Xi Jinping, at a key summit in which the two leaders will have no shortage of issues to discuss. Investors are hoping that the Trump administration will reach a resolution with Iran, or reopen the Strait of Hormuz, by the time he meets with Xi. China’s added to those hopes by also urging Iran to pursue a diplomatic solution ahead of the summit. But if a resolution does not materialize, and the Strait remains closed, the stock market could suffer. The China summit, on May 14-15, will therefore serve as an impromptu target date for investors who are eager for an end to the war. “The market’s been using this China summit as a bit of a deadline,” said Scott Ladner, investment chief at Horizon Investments. “If we get to this summit, and the Strait is still closed, I think that has to extend out the time period that the market is going to have to take into consideration.” “And that will certainly have a negative impact,” Ladner said. The energy shock is already making its way through the U.S. economy. Inflation data on the docket next week will give investors a peek into just how severe the stagflation impact is. According to FactSet, economists expect the consumer price index to have jumped to 3.9% last month from 3.3% previously. So long as the Strait of Hormuz does not continue to remain closed, many investors expect that the U.S. economy will be able to withstand a period of higher prices. This week, shares of Uber and Disney rallied after they both said consumers are still spending with abandon on food delivery and vacations. But a deeper look is showing that higher prices at the pump are exacerbating a K-shaped divide in the economy, with lower-income consumers getting hurt more while higher-earners barely feel it at all. And, even in the most benign scenarios, it will be months before the oil disruption rights itself — as it takes weeks for ships sailing out of the Strait of Hormuz to reach destinations in North America, Europe or East Asia — and investors don’t expect oil prices to return to pre-war levels. This week, one airline CEO noted the jet fuel crisis is about to hit airlines worse than Covid. AI rally For all that, there’s ample reason for investors to stay confident in the market. The S & P 500 is back at all-time highs, with earnings growth at the Magnificent Seven companies still outpacing the other 493 stocks by more than 40%, according to JPMorgan. JPMorgan’s trading desk said it expects the mega-caps will build on their recent momentum heading into Nvidia ‘s earnings results, set for release May 20. Retail investors, after moving to the sidelines during the first month of the war, have returned in earnest, focusing on their favorite artificial intelligence and semiconductor memory chip and data storage stocks, according to JPMorgan. AI will be a critical discussion at the U.S.-China summit as well, as the world’s two largest economies discuss guardrails for a technology that raises the potential for cybersecurity attacks and military risks. All of this only adds to conviction in AI, but also has some investors with long memories likening the current period to the late 1990s when the stock market boomed thanks to internet investment before the bubble eventually burst in 2000. That echo has resounded this week. The S & P 500 topped 7,300 for the first time ever, and on Friday capped a six-week-long advance, as did the Nasdaq Composite, driven by the strength in memory stocks. The Roundhill Memory ETF (DRAM) soared nearly 30% in the week just ended. “This is like the internet on steroids,” Ladner said. “And we’re still in the second or third inning.” Week ahead calendar All times ET. Monday, May 11 10:00 a.m. Existing Home Sales (April) Earnings: Simon Property Group , Mosaic , Constellation Energy Tuesday May 12 8:15 a.m. ADP Weekly Employment change (04/25) 8:30 a.m. Consumer Price Index (April) 8:30 a.m. Hourly Earnings final (April) 8:30 a.m. Average Workweek (April) 2:00 p.m. Treasury Budget (April) Earnings: Zebra Technologies , Qnity Electronics Wednesday May 13 8:30 a.m. Producer Price Index (April) Earnings: Cisco Systems Thursday May 14 8:30 a.m. Export Price Index (April) 8:30 a.m. Import Price Index (April) 8:30 a.m. Initial Claims (05/09) 8:30 a.m. Retail Sales (April) 10:00 a.m. Business Inventories (March) 5:45 p.m. New York Federal Reserve Bank President and CEO John Williams gives a Moderated Discussions on “A Conversation with New York Fed President John C. Williams” Earnings: Applied Materials Friday May 15 8:30 a.m. Empire State Index (May) 9:15 a.m. Capacity Utilization (April) 9:15 a.m. Industrial Production (April)
The Trump-Xi summit is the next major deadline for investors awaiting a resolution to the U.S.-Iran war. Here’s what’s ahead
May 8, 2026
