It’s shaping up to be a packed week for financial markets. With U.S.-Iran negotiations stalled and the Strait of Hormuz largely closed, investors are navigating a mix of geopolitical risks, a heavy earnings calendar, major central bank decisions and key economic data releases.
1. U.S.-Iran tensions remain in focus
Market participants are bracing for continued headlines around negotiations between the United States and Iran, which appear to have reached a standstill.
Over the weekend, Donald Trump cancelled plans to send negotiators to Pakistan for renewed talks, after Iran’s foreign minister made a brief visit to Islamabad. Trump indicated he would wait for Tehran to “call” him, arguing that Washington holds most of the leverage.
Attention on Monday centred on a report from Axios suggesting Iran has submitted a proposal to reopen the Strait of Hormuz and bring the conflict to an end, while delaying discussions on its nuclear programme.
Although the report briefly eased oil price pressures, crude remains well above pre-conflict levels due to the disruption in the strait. The passage is a critical route for roughly 20% of global oil supply, and prolonged restrictions could have significant economic consequences worldwide.
2. Heavy earnings week led by tech giants
Beyond geopolitics, investors are also preparing for a busy stretch of corporate earnings.
The reporting season begins Monday with Verizon Communications Inc. (NYSE:VZ), and around 35% of S&P 500 companies are set to release results over the coming days.
“[S]tocks aren’t just a geopolitical story. Q1 reporting season has been solid thus far, with the S&P set for a sixth straight quarter of double-digit earnings growth, while enthusiasm towards the tech sector has also made a notable resurgence,” said Michael Brown, Senior Research Strategist at Pepperstone.
The spotlight will be firmly on major technology firms heavily investing in artificial intelligence, including Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Meta Platforms Inc. (NASDAQ:META).
These investments remain central to the ongoing AI-driven market narrative, which has supported equities despite geopolitical headwinds. Stock indices have surged in recent weeks, reaching fresh record highs.
3. Federal Reserve decision takes centre stage
Alongside earnings, attention will turn to central banks, with several key rate decisions scheduled this week.
The highlight will be the Federal Reserve, which is widely expected to keep interest rates unchanged following its two-day meeting concluding Wednesday.
Expectations for imminent rate cuts have eased since the escalation of the Iran conflict, which triggered an energy shock and renewed inflation concerns globally. Some analysts argue that holding rates steady could still support U.S. assets, especially as other central banks consider tightening policy.
Meanwhile, uncertainty remains over the future of Fed Chair Jerome Powell, who is due to step down in May but has not confirmed whether he will remain on the rate-setting committee. Trump’s nominee to succeed him, Kevin Warsh, has yet to be confirmed, though progress may have been made after the Justice Department ended an investigation into Powell.
4. Global central bank decisions lined up
In addition to the Fed, markets will also digest policy updates from the European Central Bank, Bank of England and Bank of Japan.
The ECB is expected to leave rates unchanged at its April 30 meeting, although a rate hike in June remains possible as policymakers respond to inflation pressures linked to the conflict.
The Bank of England is also seen holding rates steady on Thursday while assessing the impact of inflation and growth trends, though some investors expect tightening later in the year.
In Japan, the Bank of Japan is likewise forecast to keep rates unchanged, but could signal a more hawkish stance as inflation risks rise alongside higher energy costs.
5. U.S. GDP and inflation data in focus
Economic data releases will also be closely watched.
One of the key indicators will be the first estimate of U.S. GDP for the first quarter, with growth expected to come in at 2.2%, up from 0.5% in the final quarter of 2025.
However, Pepperstone’s Brown noted that the figure may be “artificially boosted” due to the reversal of distortions caused by a prolonged government shutdown in the prior quarter.
Markets will also look to the March reading of the personal consumption expenditures (PCE) price index, a key inflation gauge closely monitored by the Federal Reserve.