A look at the day ahead in European and global markets from Tom

Westbrook

Markets still want to believe that neither the U.S. nor Iran is

aiming to escalate their conflict. But the path to resolution

remains as unclear as ever after another round of raised hopes

came to little over the weekend.

U.S. President Donald Trump's rejection of Iran's peace

proposal as "totally unacceptable" underscored how far apart the

parties remain from reopening the Strait of Hormuz. Oil prices

rose more than 4% in the Asia session and the dollar climbed.

Iran on Sunday released a proposal on ending the war on all

fronts that included a demand for compensation for war damages

and emphasised Iranian sovereignty over the Strait of Hormuz.

The U.S. had proposed an end to fighting before starting

talks on more contentious issues, including Iran's nuclear

programme.

S&P 500 futures wobbled lower on the news and

European futures held flat, though it was really the

artificial intelligence sector driving equities.

South Korean shares surged almost 5% to new record

highs led by chipmakers Samsung Electronics ( SSNLF ) and SK

Hynix, with the latter's stock price almost tripling

since the start of the year.

Later on Monday, British Prime Minister Keir Starmer will

begin a political fightback in a speech that says rebuilding

relations with the rest of Europe will be his government's

defining mission, as he moves to quell growing calls to quit.

Elsewhere, data showed China's producer prices surpassed

expectations in April to hit a 45-month high, piling more

pressure on manufacturers already grappling with weak demand at

home. U.S. Treasury Secretary Scott Bessent visits Japan with

the yen in focus after Japanese interventions in recent weeks.

Trump and Chinese President Xi Jinping are set to discuss

Iran, Taiwan, AI and nuclear weapons as they weigh extending a

critical minerals deal, according to U.S. officials previewing

Trump's two-day visit to China this week.

U.S. company results out this week include tech networking

equipment firm Cisco ( CSCO ) and semiconductor equipment maker

Applied Materials ( AMAT ). Heavyweights Nvidia ( NVDA ) and

Walmart ( WMT ) are due later in the month.

U.S. home sales data is due later on Monday along with

after-market results in Tokyo from SoftBank and shipper

Nippon Yusen.

Key developments that could influence markets on Monday:

Earnings: SoftBank, Nippon Yusen, Fox Corp ( FOXA )

Economics: U.S. home sales

(Editing by Jamie Freed)