Ukraine peace talks in focus

Investing.com - U.S. stock markets are set to be shuttered for a holiday on Monday, as focus shifts to a crucial meeting between American and Russian officials in Saudi Arabia this week on a potential Russia-Ukraine peace deal. Elsewhere, Walmart (NYSE:WMT) is due to report later in the week, with investors hoping the big-box retailer's numbers provide a glimpse into U.S. consumer spending habits. Meanwhile, gold firms as uncertainty around U.S. tariffs and interest rates underpins safe-haven demand.

1. Markets closed for President's Day

U.S. stock markets are due to be closed for the President's Day holiday on Monday, while Asian and European shares were mostly upbeat to begin the trading week.

The main averages on Wall Street ended in mixed fashion on Friday, as investors assessed the implications of U.S. President Donald Trump's decision to announce sweeping reciprocal tariffs, but stop short of imposing new immediate levies.

Trump tasked his economic team with coming up with a proposal for the reciprocal tariffs on any country charging a tax on imported U.S. goods, with officials saying proposals are set to be submitted to the president by April 1. Treasury yields, which typically move inversely to prices, dipped, with analysts noting some relief that the gap in time could lead to an easing in an almost relentless stream of tariff threats from the White House since Trump began his second term in office in January.

The tariffs, particularly their possible impact on Federal Reserve interest rate decisions this year, have contributed to widespread uncertainty in markets. Economists have suggested that the duties could refuel inflationary pressures, clouding the timeline for when the Fed may resume a series of rate cuts that started in 2024.

2. Ukraine peace talks

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.

Ukrainian President Volodymyr Zelenskiy noted that that Kyiv was not invited to the talks in Saudi Arabia, while Ukraine's European allies have voiced concerns that they may be frozen out of 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.

3. Walmart in the limelight this week

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.

Also on the slate for earnings this week is Chinese e-commerce titan Alibaba (NYSE:BABA), which revealed a partnership with Apple (NASDAQ:AAPL) to develop the iPhone-maker's artificial intelligence-enhanced features for the Chinese market, beating out a number of other domestic tech rivals.

4. Gold firms

Gold prices firmed slightly on Monday, steadying below record highs as safe-haven demand remained underpinned by uncertainty over U.S. trade tariffs and interest rates.

The yellow metal has clocked a series of record highs in the past two weeks as tariff actions by U.S. President Donald Trump pushed up risk aversion and safe haven demand. But Trump’s postponement of some tariffs pulled gold prices off their peaks.

Safe-haven demand was also dented by speculation over a Russia-Ukraine peace treaty, as Trump flagged a desire for peace from both sides.

5. Japan GDP

Japan’s economy blew past expectations in the fourth quarter, gross domestic product (GDP) data showed on Monday, as a recovery in exports helped offset sluggish private consumption.

GDP grew 0.7% quarter-on-quarter, government data showed. The print was higher than expectations of 0.3%, and also picked up from an upwardly-revised 0.4% notched in the prior quarter.

Year-on-year, the metric grew 2.8%, accelerating sharply from the 1.7% in the previous quarter.