The prospect of a peace deal to end the war in Ukraine is in focus as officials from Moscow and the U.S. are set to meet in Saudi Arabia this week. The talks were viewed as a potential precursor to a face-to-face meeting between U.S. President Donald Trump and Russian President Vladimir Putin. Elsewhere, Walmart (NYSE:WMT) earnings may provide some insight into the state of the U.S. consumer in the wake of hotter-than-anticipated inflation data and a raft of tariff threats from Trump.
1. U.S., Russia to discuss Ukraine peace deal
U.S. and Russian officials are due to meet in Saudi Arabia this week to discuss possible negotiations on securing a peace deal to end the war in Ukraine.
The discussions would take place in the Saudi capital of Riyadh on Tuesday, according to a Russian newspaper. Representatives of President Donald Trump's administration will include U.S. Secretary of State Marco Rubio, Trump's national security advisor Mike Waltz, and White House Middle East Envoy Steve Witkoff, Reuters has reported. It was not yet clear who Russia would send to the meeting.
Media reports have suggested that the high-level in-person talks -- the first of this kind between U.S. and Russian officials in years -- could be a precursor to a possible face-to-face meeting between Trump and Russian counterpart Vladimir Putin.
Trump surprised U.S. allies in Europe last week when he announced that he had spoken with Putin by phone and ordered the start of negotiations to end the nearly three-year conflict in Ukraine. Meanwhile, Ukrainian President Volodymyr Zelenskiy has said that Kyiv was not invited to the discussions in Saudi Arabia, and questions swirled around the role Europe -- a major backer of Ukraine -- would have in the negotiations.
For financial markets, analysts have noted that a Russia-Ukraine peace deal and a subsequent easing of sanctions on Russian energy could have implications on global oil supply flows, although indications of solid near-term demand have helped keep crude prices steady.
2. Walmart earnings
Investors will be paying close attention to returns from Walmart on Thursday, which may provide a fresh glimpse into the state of the U.S. consumer.
Data in recent days have pointed to renewed concerns among shoppers over inflation and the impact of Trump's sweeping import tariff plans. Consumer spending activity is crucial for the U.S. economy, accounting for roughly two-thirds of activity.
Consumer prices surged by their most in almost a year-and-a-half in January. A separate survey also showed that U.S. consumer sentiment fell to its lowest mark in seven months in February, while households feared that the negative impact of Trump's levies may have already been felt.
Analysts have suggested that the quarterly results from Walmart, the big-box retailer widely considered to be one of the most important consumer brands in the U.S., could clarify whether there has indeed been a noticeable change in spending habits, particularly on discretionary items. Similarly revealing numbers are also due out from Walmart-rival Target (NYSE:TGT) as well as do-it-yourself home improvement chain Home Depot (NYSE:HD).
3. Alibaba to report
Alibaba (NYSE:BABA) is also set to reveal its December quarter figures on Thursday, with traders keen to see if the Chinese e-commerce giant will reveal more details about its AI partnership with Apple (NASDAQ:AAPL).
Last week, Alibaba Chairman Joseph Tsai announced that the company was working with Apple to develop the iPhone-maker's artificial intelligence-enhanced features for the Chinese market, beating out a number of other domestic tech rivals. The news has helped fuel a spike in shares in Alibaba in recent days.
Baidu (NASDAQ:BIDU), Tencent, and ByteDance were all also in talks with Apple about its AI strategy in China, according to media reports.
Apple previously announced a drive to bring AI to its flagship smartphone through what it has called "Apple Intelligence," although a slow international roll-out of the service has recently raised concerns among analysts. Crucially, Beijing has required Apple to work with domestic firms to construct AI models for handsets sold in China. Analysts have noted that the absence of Apple Intelligence on the firm's iPhones in China has combined with intensifying local competition to weigh on sales in the country.
4. Fed minutes
Minutes from the Federal Reserve's latest meeting are scheduled to be unveiled on Wednesday, as investors hunt for more insight into the central bank's outlook for interest rates in the months to come.
In January, the Fed chose to leave borrowing costs unchanged at a range of 4.25% to 4.5%, citing a resilient labor market and an inflation rate that remained above officials' target level.
Fed Chair Jerome Powell noted that policymakers are now taking a wait-and-see approach to future cuts to interest rates, after having announced a series of reductions late last year. In response to the statements and last week's hotter-than-expected inflation data, markets have begun to somewhat temper hopes for further cuts this year.
Beyond the Fed this week, central banks in the Asia-Pacific region will be busy, with decisions expected in Australia, New Zealand, and Indonesia.
5. Gold near record highs
Gold has hovered around record highs, even as speculation around a Russia-Ukraine peace deal has weighed on its typical safe-haven demand.
The yellow metal has been boosted as uncertainty surrounds Trump's trade policy. He has imposed 25% import duties on steel and aluminum imports, slapped a 10% duty on China, and outlined a proposal for broad-based reciprocal tariffs.
Over the weekend, media reports said the European Union was planning to block imports of U.S. soybeans and other foods diverging from domestic standards, although Trump brushed off the reports and reiterated plans to impose reciprocal tariffs.
This kept some safe-haven demand for gold in play, as markets braced for a brewing international trade war.
