Fed's New Boss Sees 'Trimmed' Inflation: 8 Key Items Shaping the Stock Market Monday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a mixed market open later on Monday morning.

1. The US and Iran remain far apart on a framework to end their war and reopen the Strait of Hormuz, with President Donald Trump calling the Islamic Republic’s reply to his proposed peace plan unworkable… Trump rejected Iran’s response, but stopped short of declaring a resumption of fighting… The impasse means Hormuz remains largely blocked, with Iran and other Persian Gulf countries unable to export energy supplies through the waterway… (Bloomberg)

Trump’s response to Iran’s led oil prices higher, but building on that comment, earlier on Monday, Israeli Prime Minister Benjamin Netanyahu warned that the conflict with Iran was “not over.” That is raising concerns over renewed escalation in the Middle East, threatening energy supplies and supply chain headwinds.

2. U.S. President Donald Trump and Chinese President Xi Jinping are set to discuss Iran, Taiwan, artificial intelligence 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… Trump is scheduled to arrive in Beijing on Wednesday, ahead of talks set to take place Thursday and Friday. (Reuters)

There are several pieces on the trade talk chess board that could influence the outcome of these conversations. The U.S.-Iran conflict and its impact on the global economy, Trump’s tariffs on China, and China’s eyes on Taiwan are some of the notable topics, but how they are weaved together and the outcome produced, assuming there is one, is, as of now, less than clear. As we move closer to the talks, we’ll look to see which topics are poised to become focal points and what the potential outcome could be.

3. Apple and Intel have reached a preliminary agreement for Intel to manufacture some of the chips that power Apple devices, according to people familiar with the matter… It’s still unclear which Apple products Intel would make chips for, these people said. (WSJ)

Following reports this year that chip capacity has been shifted to AI and data center chips from those for PCs, smartphones and other markets, we’re not surprised Apple (AAPL) is working with Intel (INTC) to shore up its supply of chips. Apple CEO Tim Cook said on the company's most recent earnings call that iPhone sales were held back by supply constraints and delivery times for certain Mac products stretch into late summer. We see this as a smart move on Apple’s part, especially as it should help expand its supply chain on domestic soil, something the Trump administration can tout.

We’ll hear more about tight chip industry capacity when Portfolio holding Applied Materials (AMAT) reports later this week. We suspect we will see Taiwan Semiconductor (TSM) upsize its capital spending plans again when it reports the current quarter in July.

4. Kevin Warsh, who is on track to become the next chair of the Federal Reserve in mid-May, has a preferred way to measure inflation. It produces a result that is nearly a full percentage point lower than the Fed’s currently preferred yardstick… Warsh recently told the Senate Banking Committee that he prefers a different gauge: trimmed mean… 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, or “trimmed” from the final calculation. (Barron’s)

We’ve seen a lot of “new math” around economic data in our time, with folks excluding certain components to make the data show what they want. When it comes to Warsh’s “timed inflation,” the Dallas Fed has already flagged a problem: if tariff effects are a one-time bump in inflation, the trimmed mean will give a cleaner read on where inflation is headed. But if they are broadening into something more persistent, the trimmed mean will understate inflation, possibly by a lot.

Folks already grumble about the focus on core inflation, which excludes food and energy prices, even though they comprise a sizable part of consumer budgets. We’re all for capturing data and representing what it is doing correctly, but we’re not fans of “new math” to justify a decision that doesn’t accurately describe the landscape. Fortunately, while the Fed chair runs meetings and shapes the agenda, policy is still set by a committee.

5. U.S. senators are set to consider long-awaited legislation that would create a regulatory framework for cryptocurrency next week, potentially ending a deadlock over the bill that pitted crypto companies against U.S. banks. The bill, dubbed the Clarity Act, would, if signed into law, clarify financial regulators' jurisdiction ‌over the burgeoning sector, potentially boosting digital asset adoption. (Reuters)

The regulatory environment has been one of the issues keeping us on the sidelines with cryptocurrency when it comes to the Portfolio. Volatility has been another. While the bill passed the House in July 2025, it has been stalled since with disputes remain between crypto firms and banks regarding stablecoin regulations and whether certain assets are securities or commodities. We’ll look to see what develops and go from there.

6. Cerebras Systems is set to raise the size and price of ‌its initial public offering as soon as Monday, as demand for the artificial intelligence chipmaker's shares continues to climb, two people familiar with the matter told Reuters on Sunday. (Reuters)… Quantinuum Inc., a quantum computing company backed by Honeywell International Inc., filed for a US initial public offering, capitalizing on enthusiasm around quantum computing stocks. (Bloomberg)… Barnes & Noble’s owner, the hedge fund Elliott Investment Management, is preparing for an initial public offering that would also include London-based Waterstones, the largest bookstore chain in the U.K., and Chicago-based Paper Source, a stationery chain. (WSJ)

To that we can add Inspire Brands filing a confidential draft IPO registration statement and last week e-bike and scooter company Lime filing for its IPO. The pipeline of companies looking to tap the public markets is growing and eyes will be on the Cerebras offering, which is one of five such offerings expected to price this week.

We’ll be watching the pricing of those offerings and their post IPO performance as part of our homework for Morgan Stanley (MS) and Bank of America (BAC) shares in the Portfolio. Morgan is one of the lead underwriters for the Cerebras offering.

7. Economic data today per TipRanks: Existing Home Sales (April)

8. Companies reporting today per TipRanks: AM - Ceva (CEVA) , Constellation Energy (CEG) , Fox Corp. (FOXA) , Monday.com (MNDY). PM - Harmonic (HLIT) , Hims & Hers (HIMS) , Plug Power (PLUG) , Simon Properties (SPG) .

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AMAT, BAC, and MS shares.