In the week ahead: U.S. GDP, Core PCE Price Index, NVIDIA Earnings

The EUR/USD pair continued its upward momentum early on Monday adding to sharp gains posted on Friday. The Euro advanced as markets responded to reports from Bloomberg that U.S. President Donald Trump has extended the deadline for imposing 50% tariffs on European Union imports to July 9, 2025. The delay provided relief to investors concerned about an imminent escalation in transatlantic trade tensions.

European Commission President Ursula von der Leyen signaled a willingness to engage swiftly in trade talks, writing on social media Sunday that the EU was prepared to move quickly but needed more time to secure a comprehensive agreement with the United States. The move suggests a potential thaw in the recent standoff between Washington and Brussels. President Trump had previously threatened to impose steep tariffs starting June 1, citing dissatisfaction with the EU’s trade proposals. In a post on his Truth Social platform Friday, Trump stated, “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025.” The announcement rattled markets, but the subsequent extension has helped soothe investor nerves.

In the monetary policy landscape, Federal Reserve officials remain cautious. On Friday, Chicago Fed President Austan Goolsbee said that Trump’s latest tariff threats introduce additional uncertainty, likely delaying any changes to interest rates. Kansas City Fed President Jeffrey Schmid echoed the sentiment, noting that policymakers will prioritize hard economic data in assessing future rate moves and should avoid overreacting to soft or sentiment-based indicators.With U.S. markets closed Monday for the Memorial Day holiday, trading volumes may remain light, but focus will stay on the evolving U.S.–EU trade dynamic and the broader implications for the Dollar and global markets.

Gold prices surged on Friday, with XAU/USD climbing nearly 2% on the day and posting a weekly gain of more than 5%, as mounting geopolitical and fiscal concerns drove investors into safe-haven assets.

The rally was sparked by U.S. President Donald Trump’s renewed trade threats against the European Union. Speaking before the U.S. market open, Trump declared that negotiations with the EU were “going nowhere,” and warned of a 50% tariff on EU imports starting June 1.

The heightened trade tension added to already growing concerns over U.S. fiscal health. The House of Representatives approved Trump’s expansive budget proposal — known as the “One Big Beautiful Bill” — which is projected to add nearly $4 trillion to the federal debt ceiling. The bill now heads to the Senate, where debate is expected to intensify.

Despite some easing in geopolitical stress — with diplomatic progress reported in Ukraine and ongoing nuclear negotiations between the U.S. and Iran — markets remained broadly risk-averse. Russia’s foreign minister noted that efforts toward a Ukraine ceasefire were advancing, while officials from Washington and Tehran concluded a fifth round of nuclear talks in Rome on Friday. However, these developments were not enough to offset broader investor caution.

Looking ahead, this week will be crucial for markets, with several high-impact data releases scheduled. These include Durable Goods Orders, the second estimate of Q1 GDP, and the Federal Reserve’s preferred inflation measure — the Core Personal Consumption Expenditures (PCE) Price Index. The release of the Fed’s latest meeting minutes will also be closely watched for clues on future policy direction.

Oil prices rose modestly on Friday, as traders covered short positions ahead of the U.S. Memorial Day weekend amid rising geopolitical uncertainty. Concerns over stalled nuclear negotiations between the U.S. and Iran, along with fresh trade tensions, added a layer of risk to an already cautious energy market.

Market participants also kept a close eye on developments in Rome, where U.S. and Iranian officials held another round of negotiations on Tehran’s nuclear program. Fears are mounting that a breakdown in talks could disrupt regional stability and threaten oil supply flows from the Middle East.

Adding to the market’s unease, U.S. President Donald Trump on Friday announced a proposed 50% tariff on goods from the European Union, effective June 1, citing continued dissatisfaction with the bloc’s trade practices.

OPEC+ — the alliance of the Organization of the Petroleum Exporting Countries and its partners, including Russia — is set to meet next week. The group is widely expected to approve another monthly production increase of 411,000 barrels per day (bpd) for July.

With traders balancing geopolitical risks, trade policy uncertainty, and the prospect of rising supply, oil prices remain sensitive to headline-driven volatility as the second half of the year approaches.

U.S. equity markets closed sharply lower on Friday, capping off a volatile week marked by renewed trade tensions. President Donald Trump's announcement recommending 50% tariffs on European imports reignited fears of a global trade war, rattling investor sentiment and triggering broad-based losses across major indices.

Markets opened lower and pared some losses throughout the session, but all three major indices ended in the red. Risk-sensitive sectors led the decline, with technology, communication services, and consumer discretionary stocks dragging down the US 500.

President Trump's tariff proposal added fresh fuel to concerns about international trade disruptions. The President also singled out Apple Inc., warning the tech giant could face a 25% tariff on iPhones sold in the U.S. if they are not domestically produced. Apple stock fell 3%, hitting a two-week low.

High growth megacap stocks were hit hard. Amazon, Nvidia, and Meta Platforms all fell over 1%, while Tesla dipped 0.5%.

With renewed trade frictions and political uncertainty clouding the outlook, investors will be closely watching upcoming data releases and policy updates for clues on market direction.