Some of the main events in markets this week will be ongoing dialogues between the United States and Iran, as well as new economic data releases following the Federal Reserve’s decision to hold rates steady. This week will be very eventful, as new data will be released that impacts sectors such as technology, real estate, consumer staples, and manufacturing.
1. AI Sentiment Improvements
AI-themed stocks could be poised for an additional rally, especially since the Federal Reserve decided not to rates during its recent meeting.
The Roundhill Memory ETF (DRAM) has rallied strongly, especially following the short-term political de-escalations. This ETF rose by nearly 10% last Friday, and may continue to have strong momentum and interest from investors this week. This ETF has been one of the fastest-growing ETFs in the market, recently surpassing the $10 billion mark.
According to a recent article from Forbes, artificial intelligence stocks will account for around half of the S&P 500’s earnings growth during the year.1
Investors should keep a close watch on stocks with AI exposure, as this rally contains great volatility and no one knows what the upcoming future holds.
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2. Energy Stocks and Inflation Sentiment
Oil prices have been extremely volatile during recent trading sessions.
While potential peace talks have caused crude oil to drop below $80/barrel, oil prices have begun to rebound slightly as Israel’s recent strikes on Lebanon have raised questions over the success of new peace negotiations.2
The Vanguard Energy ETF (VDE) fell by 3% last week, but may be poised to rebound this week if oil prices recover.3
Investors should keep a close eye on energy markets this week, as these stocks may be poised to rebound amid any geopolitical shocks.
3. New Growth Data: Personal Income and Manufacturing Data
Tensions in the Middle East have also sparked concerns over potential rate hikes and slower growth in global economies in 2026.
Real GDP growth was 1.6% last quarter, but there are many vulnerable areas, such as consumer spending and manufacturing growth, that could cause weaker growth in Q2 2026.4
The BEA will release new information this week, including industry and state data from the quarter, as well as personal income and outlays data for May. Moreover, the upcoming S&P Global Flash Manufacturing PMI data should provide more insight about US manufacturing activity. This data should shed more light on the US economy’s performance during H1 2026 and sentiment for the broader equity markets this week.
4. Consumer Confidence and Real Estate Data
US consumers have faced a rocky 2026 since geopolitical tensions began in late February. The combination of a new wave of inflation and potential rate hikes has created more cautious spending habits and delays in real estate transactions.
While consumers have experienced temporary relief from the decline in gasoline prices, potential geopolitical shocks could reintroduce inflationary concerns.5
There may be some unique buying opportunities in markets this week for consumer staples or consumer discretionary stocks. ETFs like the Vanguard Consumer Staples Index ETF (VDC) or the Vanguard Consumer Discretionary Index ETF (VCR) may sell off this week on the back of any negative economic news.
The US Census Bureau will also release data about new housing sales for May. April data was weak, and any further concerning slump in sales could cause real estate equities to sell off this week.6
5. Gold Amid Peace Negotiations
Gold mining equities will likely have an eventful week following their strong decline in the previous week.
One potential catalyst to monitor includes any derailing of peace negotiations between the United States and Iran. Iran recently accused the United States of violating its ceasefire agreement, a move that will likely shake markets this week.7 Any additional tensions could cause broader sell-offs in the market, including gold mining stocks. However, gold still retains its appeal in the current economic and geopolitical environment.
Investors should keep an eye on any potential derailment of peace negotiations, as well as additional Central Bank buying activity, as this could add to gold’s appeal in the long term.
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