By Jamie McGeever
ORLANDO, Florida, May 20 (Reuters) - Stocks rallied while oil and bond yields tumbled on Wednesday, on growing hopes that a U.S.-Iran peace deal could be imminent, and shares in chipmaker Nvidia fell in after-hours trade after the world's most valuable company released its latest results.
In my column today, I look at President Donald Trump's apparent climbdown on interest rates. With inflation accelerating and bond yields climbing, he has cooled his calls for incoming Fed Chair Kevin
Warsh to cut rates.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
1. Fed minutes show more policymakers open to a rate hike
2. Bond yields may finally be baking in an AI world: Mike Dolan
3. ECB June rate hike case is nearly sealed but July is fully open, sources say
4. Target doubles growth forecast, but cites caution as consumers remain stretched
5. Samsung union suspends planned strike after reaching tentative pay deal
Today's Key Market Moves
• STOCKS: Asia mostly lower, Europe +1%, UK +1.5%. Main U.S. indices up 1% or more, Brazil +2%.
• SECTORS/SHARES: Eight S&P 500 sectors up, three down. Tech +2%, consumer discretionaries +2.5%. Energy -2.6%. Airlines +9%, Philadelphia semiconductor index +4.5%. Nvidia falls then rebounds in choppy after-hours trade following results.
• FX: Dollar index -0.2%. Aussie, kiwi, stokkie biggest G10 gainers. South Africa the biggest EM gainer, Indonesia rate hike lifts rupiah.
• BONDS: Yields slide. 10-year U.S. yield -10 bps, 20-year auction is weak. UK yields post double-digit declines across the curve.
• COMMODITIES/METALS: Oil slumps 5.5%, despite sharp fall in U.S. stocks.
Today's Talking Points
* Final peace of the jigsaw?
After countless false dawns, are the U.S. and Iran finally on the verge of agreeing a peace deal? Trump says they are in the "final stages" of talks. We've been here before, but investors seem hopeful this time it's different.
On Wednesday, crude oil prices fell over 5%, Treasury yields had the biggest fall since late March, and Wall Street snapped a three-day losing streak. Pent-up "risk on" demand is out there. But if there's no deal, and Nvidia earnings disappoint, it could be a rocky end to the week.
* Keep the customer satisfied
How resilient is the famously resilient U.S. consumer right now? Earnings reports and outlooks from some of the country's largest retailers this week will offer a glimpse - and at first blush, there may be cause for concern.
Target reported strong results and doubled its sales growth forecast, but warned about the outlook. TJX, the parent company of discount retailer TJ Maxx, raised its outlook as cost-wary consumers flocked to its stores for deals. Signs are, shoppers are tightening their belts. Walmart releases earnings before the bell on Thursday.
* Independent thought
U.S. Treasury Secretary Scott Bessent's comments on Japanese monetary policy, in an interview with Reuters in Paris, were interesting. He said Bank of Japan Governor Kazuo Ueda will undoubtedly do a great job "if they will give him the room to do what he will do."
The pointed jab at Prime Minister Sanae Takaichi shines a light on the political independence of central banks and their ability to set policy free from government interference or influence - a debate echoing around the world, and nowhere louder than the United States.
What could move markets tomorrow?
• Developments in the Middle East
• PMIs - Japan, euro zone, UK, U.S. (May)
• New Zealand trade (April)
• Australia unemployment (April)
• Japan machinery orders (March)
• Japan trade (April)
• Euro zone current account (March)
• Bank of England Governor Andrew Bailey and policymaker Alan Taylor speak
• U.S. weekly jobless claims
• U.S. Philly Fed index (May)
• U.S. Treasury sells $19 billion of 10-year TIPS at auction
• Richmond Fed President Thomas Barkin speaks
• U.S. earnings include Walmart
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Reporting by Jamie McGeever; Editing by Nia Williams)
