The U.S. war with Iran enters its 11th week on Monday, but remains stuck in the same mire that has halted progress for more than a month. Markets are contending with familiar issues to start the week as both sides rejected a peace proposal and oil prices surged above $100 again. 

“Totally unacceptable” was President Donald Trump’s assessment of Iran’s long-waited response to a U.S. effort to end the war, which has stoked energy inflation and weighed on growth prospects in markets around the world. 

Both sides are likely to regroup on talks this week, but Trump’s much-anticipated visit to China likely means the Iran issue will be put to one side as he discusses trade, Taiwan, and artificial-intelligence technology with President Xi Jinping later this week in Beijing.

The third of those topics may prove the most useful for Trump, who is counting on market excitement around AI to continue driving U.S. stocks higher into the summer months and the early stages of midterm elections later this fall. 

The president will need the help given the slow progress he’s made on oil and gas prices, which are likely to remain at multiyear highs as the crucial Strait of Hormuz shipping route remains effectively closed and a deal with Tehran is elusive. 

AI has powered nearly two-thirds of the stock market’s charge since the end of March, with the top five stocks representing more than a quarter of the S&P 500’s $75.6 trillion in overall value and the Nasdaq riding a staggering second-quarter gain of 21.6%.

It’s also kept the U.S. economy out of recession, and is partly responsible for keeping the job market relatively stable. 

In short, it’s a lot more important than oil these days—and while the Iran crisis captures mainstream headlines, Trump likely understands where America’s financial market advantage truly lies.

—Martin Baccardax

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It’s another Monday and another chance for markets to seesaw based on the latest in negotiations to end the Iran war. On Sunday, President Donald Trump set stocks up to fall this morning, while oil prices were surging after he rejected Iran’s response to the U.S. plan as “totally unacceptable.”

• Iran sent its response to mediators in Pakistan, The Wall Street Journal reported, citing people familiar with the matter. The report said Iran’s response didn’t resolve U.S. demands that it make advance commitments on its nuclear program and its store of highly enriched uranium.

• Iran proposed to end the fighting and gradually reopen the Strait of Hormuz to commercial traffic as the U.S. removes its Navy blockade of Iran’s ports, the Journal reported. “I have just read the response from Iran’s so-called “Representatives.” I don’t like it—TOTALLY UNACCEPTABLE!” Trump posted Sunday.

• The flare up in tensions comes as Trump prepares to leave for China, where he is meeting with President Xi Jinping. He arrives in Beijing on Wednesday and sets out on an array of events the next day, including a welcome ceremony, a tour of the Temple of Heaven, and a state banquet. 

• U.S.-China relations have been “refocused on what matters most,” a White House spokeswoman said Sunday. The president can be expected to “deliver more good deals,” and discussions will touch on the proposed U.S.-China board of trade and the U.S.-China board of investment.

What’s Next: The U.S. delegation intends to touch on trade in industries and goods in the aerospace, agriculture, and energy sectors, including possible purchase commitments. Trump will join Chinese President Xi Jinping on Friday for a bilateral tea and working lunch before flying home.

—Liz Moyer and Janet H. Cho

Kevin Warsh’s nomination as the next Fed chair is coming, with the Senate preparing a confirmation vote as the next batch of inflation data is due. Warsh has a preferred way to measure inflation that produces a result nearly a full percentage point lower than the Fed’s currently preferred yardstick.

• Fed officials typically track inflation through the personal consumption expenditures price index, paying closest attention to core PCE, which strips out food and energy prices. Warsh told the Senate Banking Committee he prefers a different gauge: “trimmed mean,” which looks at a generalized change in prices not a one-time change.

• By that measure, inflation in March from a year earlier rose 2.4%, according to the Dallas Fed, versus the 3.2% rise in core PCE. The gap between the two yardsticks could spell the difference between a Fed with room to cut interest rates and one without. 

• Core PCE always excludes food and energy, no matter how their prices change in any given month. The trimmed mean is calculated differently. After the price change in every spending category is measured each month, the most extreme gains and losses are excluded from the final tally.

• In March the Dallas Fed, which produces a popular version of the measure, excluded computer software and accessories, whose prices jumped at a 60.2% annualized rate, and tax preparation services prices, which fell at a 27% annual pace. Both were included in core PCE.

What’s Next: Even if Warsh wants to reorient the Fed around trimmed mean measures of inflation, he has to convince his Fed colleagues. The Dallas Fed’s next trimmed mean reading comes out May 28. If it comes in well below core PCE, Warsh may keep citing it. The next inflation reading—the CPI—is Tuesday.

—Nicole Goodkind

Major U.S. airlines are compensating for their higher jet fuel costs by hiking fees for checked bags, extra legroom, row preferences, and wherever else they can generate more money, said Henry H. Harteveldt, president and travel industry analyst with Atmosphere Research Group in San Francisco. 

• The fee increases reflect that airlines can only raise ticket prices so much before consumers start to balk, Harteveldt said. Some travelers are picking tickets to save money, and others are more willing to pay for extras. Cut-rate provider Spirit Airlines shut down this month under pressure from jet fuel costs.

• Jay Sorensen, president of IdeaWorks, which specializes in airline ancillary fee strategy, said baggage fees are the largest single source of such extra revenue. The 13 major U.S. airlines collected more than $5.47 billion in checked-bag fees through September 2025, Bureau of Transportation Statistics data says.

JetBlue Airways got things moving in March, raising its checked fees by up to $10 a bag, citing increasing operating costs. United Airlines, Delta Air Lines, and Southwest Airlines all followed suit in early April. 

• Airlines also generate billions of dollars in revenue through their loyalty programs tied to co-branded credit cards. Delta generates the most, with $8.2 billion in 2025 revenue from American Express buying SkyMiles for its cardholders, and more than $2 billion in the first quarter 2026.

What’s Next: Starting May 19, Delta will stop serving beverages and snacks on flights shorter than 350 miles, except for passengers in first class. A Delta spokesperson told Barron’s that the change is “not related to costs,” but about shifting resources to longer flights with more snacks and beverages.

—Janet H. Cho

A U.S. citizen has tested positive for the Andes strain of hantavirus and another has mild symptoms, the Department of Health & Human Services said early Monday. All 17 American citizens from the MV Hondius cruise ship are currently en route to the U.S., HHS said.

• One passenger on the repatriation flight has tested mildly positive for the virus, while another is currently experiencing mild symptoms, the health department said. The two passengers are traveling in the plane’s biocontainment units “out of an abundance of caution,” it added.

Moderna stock jumped 20% last week after the World Health Organization reported a cluster of hantavirus cases tied to an outbreak on the MV Hondius cruise ship, which arrived in Spain’s Canary Islands early Sunday. The S&P 500 climbed 2.3% over the same period.

• Investors are looking to Moderna, which helped launch the second authorized Covid-19 vaccine in the U.S., to deliver another breakthrough. The drugmaker has studied hantaviruses for years in collaboration with the U.S. Army Medical Research Institute of Infectious Diseases.

• In a statement Thursday, the company confirmed that it was exploring a hantavirus treatment, styling the efforts as “early-stage and ongoing” and as part of a broader push