Stock markets notched solid gains last week while crypto markets lost a bit of ground and cooled slightly.

The weaker-than-expected readings on CPI and inflation expectations keep markets buoyed, while the Trump administration’s Middle East deals were a boon for the AI sector.

Additionally, US Treasury yields are surging again. “Trade deals, recession worries, lower inflation, and slowing GDP all can’t get lower yields,” said the Kobeissi Letter, which added, “Meanwhile, Fed Chair Powell remains adamant on not cutting rates.”

Moody’s downgrade of the US credit rating on Friday was also good news for store-of-value assets such as Bitcoin and gold.

Economic Events May 19 to 23

There may be some market reaction to the Moody’s downgrade on Monday, which could set the stage for further volatility this week.

May’s SP Global Manufacturing and Services PMI (purchasing manager’s index) preliminary readings are due on Thursday. These leading economic indicators gauge activity in the manufacturing and services sectors, which reflect business and consumer sentiment.

Most official economic data has suggested that the US economy is holding up reasonably well. However, they have been more backward-looking and don’t yet properly capture the aftermath of President Trump’s announcement of widespread tariffs in early April. PMIs may provide a more accurate picture of the real impact.

There are also some home sales reports coming this week, which shed light on the US housing market but have virtually no impact on crypto asset markets.

Key Events This Week:

1. Markets React to Moodys Downgrade Monday

2. US Crude Oil Inventory data Wednesday

3. SP Global Manufacturing PMI data Thursday

4. April Existing Home Sales data Thursday

5. April New Home Sales data Friday

6. Total of 14 Fed speaker…

‘Soft data’, such as activity and confidence surveys, “paint a potentially grimmer picture, particularly in the US where consumer and business confidence are still deteriorating,” said Citigroup analysts, according to the WSJ.

In Asia, markets will watch for progress in trade talks between the US and regional players in addition to key data from China and a central bank rate announcement.

Crypto Market Outlook

Crypto markets started the new week solidly with Bitcoin closing its highest-ever daily and weekly candles at just below $106,500.

However, the asset has started to cool during Monday morning trading in Asia, dropping back below $103,000 following its multi-month high.

“As the US Dollar weakens and uncertainty rises, Bitcoin and Gold are thriving,” said Kobeissi.

Ethereum has weakened significantly, falling almost 3% on the day back beneath the $2,400 level following a solid week.

The altcoins were a mixed bag, with gains for Dogecoin, Shiba Inu, and Litecoin, while Tron, Leo, and wrapped ETH derivatives lost ground.