Investors are entering a holiday-shortened week with a calendar heavy on macroeconomic data and corporate earnings and with renewed geopolitical tension adding uncertainty to markets. The United States and Iran will meet again in Switzerland this week to discuss Tehran's nuclear programme, while traders parse inflation metrics, growth readings and a slate of quarterly reports from large companies.
U.S. stock markets will be closed for a holiday on Monday, compressing trading flows into fewer sessions. Equity benchmarks finished mixed in the most recent full session, as markets digested a softer-than-expected rise in U.S. inflation in January, which pushed some market participants to price a potential move up in the timing of the Federal Reserve's next interest rate reduction to as early as June. That assessment competes with stronger labor-market signals from earlier in the week which had supported the view that the central bank, having cut rates several times in 2025, might delay further easing until the second half of the year.
The technology-heavy Nasdaq Composite continued to show relative weakness, reflecting investor concern over disruption to the technology and communication services sectors from new artificial intelligence models. Market participants remain uneasy about competitive dynamics and uncertain about when large-scale investments by mega-cap firms into AI infrastructure will translate into tangible benefits, factors that contributed to pressure on the major indices last week.
Attention this week will focus on key economic indicators, notably the personal consumption expenditures price index for December, which is a closely watched inflation gauge for Federal Reserve officials and is due on Friday. An advance estimate of U.S. gross domestic product for the October-December quarter is also scheduled for release on Friday. Both data points are likely to shape expectations about the Fed's policy path.
Corporate results will also be in focus as earnings season continues. High-profile reports expected this week include Walmart, Palo Alto Networks, Analog Devices and Booking Holdings, among others, which could influence sector sentiment and index trajectories.
U.S.-Iran talks in Switzerland
A second round of U.S.-Iran discussions is planned in Switzerland this week following the resumption of negotiations earlier in February. The diplomatic exchange is unfolding alongside a heightened U.S. military presence in the region, with a second aircraft carrier dispatched to the Middle East and preparations described as indicating readiness for a sustained military campaign should diplomacy fail.
U.S. political leadership has publicly urged Tehran to accept a deal or face increased military pressure. Iranian officials told media outlets over the weekend that they would be willing to compromise on their nuclear programme in exchange for relief from stringent U.S. sanctions, and indicated that the decision to reach a deal now rests with Washington.
Analysts at ING cautioned that uncertainty around the outcome of the U.S.-Iran interactions is contributing to elevated risk pricing across markets, writing that "[T]here is still a large risk premium priced into the market given the uncertainty over how the situation between the U.S. and Iran evolves." The geopolitical backdrop has influenced oil market tone, although price action remained contained.
Liquidity was thin in European trading as market holidays in China and the U.S. reduced volumes, and weak growth figures from Japan also added to concerns about softening demand. Brent crude for April delivery was largely unchanged at $67.72 a barrel by 02:28 ET (07:28 GMT).
Media sector drama - Warner Bros. and Paramount
In corporate headlines, reports indicate a new twist in takeover discussions surrounding Warner Bros. Discovery. Warner Bros. is reportedly weighing reopening talks after Paramount Skydance enhanced the terms of a hostile takeover bid, according to media reports.
Board members at Warner Bros. are assessing whether Paramount's revised stance could be preferable to a competing proposal from streaming giant Netflix, the reports said. Paramount pledged last week to increase cash payments to Warner Bros. shareholders for each quarter a transaction is not completed in 2026 and to provide funding to cover any penalties that Warner Bros. might incur from terminating its current agreement with Netflix. However, Paramount did not increase its core $30-per-share offer.
Gold retreats after volatile swings
Precious metals experienced renewed volatility. Spot gold eased 0.9% to $4,998.69 per ounce, while April gold futures declined 0.6% to $5,018.69 per ounce by 02:33 ET. Markets had seen wild price movements over the previous two weeks and both gold and silver remained well below their late-January peaks.
Recent gains in gold and silver had been supported by dip-buying and intermittent dollar weakness, as well as safe-haven flows prompted by geopolitical tensions involving the U.S. and Iran. Still, the metal market's recent swings left traders cautious heading into this week.
Bitcoin extends pullback
Cryptocurrency markets continued to register losses, with Bitcoin sliding sharply and extending a sequence of notable weekly declines. After briefly trading as high as $70,000 over the weekend, the world's largest cryptocurrency dropped 3.1% to $68,624.6 by 02:37 ET. The move continues a pronounced downtrend that has erased roughly 50% of Bitcoin's value since its peak near $126,000 in October.
In other crypto-related developments, Strategy - identified in reports as the world's largest corporate holder of Bitcoin - said it can meet its debt obligations even if Bitcoin's price falls as low as $8,000 per coin. The firm stated on a social media post that it can "withstand a drawdown in $BTC price to $8K and still have sufficient assets to fully cover our debt." That company holds 714,644 Bitcoin, acquired through a combination of new capital issuances and long-term debt financing.
Market context and what to watch
Traders will monitor the interplay between incoming economic data, the path of Fed policy and corporate earnings, all while geopolitical developments inject additional uncertainty. Inflation metrics and GDP estimates at the end of the week are expected to be particularly influential for markets sensitive to interest-rate expectations. Corporate earnings from large-cap retailers, technology and semiconductor firms may drive sector-specific moves, and developments in media takeover conversations could reverberate across entertainment and communications stocks.
Geopolitical risk tied to the U.S.-Iran negotiations remains a notable market variable, influencing commodity prices and risk sentiment. Oil prices so far have been rangebound amid lower volumes and mixed demand signals, but analysts and market participants remain alert to changes in the diplomatic or security environment that could shift the supply-risk calculus.
Investors entering the shortened trading week should be prepared for compressed liquidity, potentially larger intraday moves around key releases and earnings, and the ongoing influence of geopolitical headlines on commodity and safe-haven assets.