Tariff uncertainty, AI/media momentum, and rising oil tensions set the tone for Monday’s markets

Global markets on Monday are likely to be driven mainly by three intertwined macro themes carrying over from last week: shifting sentiment around media/AI growth stories, uncertainty over trade tariffs, and renewed tensions in the energy market. First, investors will be reacting to strong momentum in media and AI-related names from Friday’s session. Large gains in major streaming and media companies, alongside continued focus on artificial intelligence spending after a leading chipmaker reported exceptionally strong data-center revenues, have reinforced the narrative that digital content and AI infrastructure remain key growth engines for the global economy. This can support risk appetite broadly, as investors extrapolate stronger advertising, subscription, and cloud-computing demand worldwide. At the same time, questions about whether AI-related capital spending is sustainable could introduce volatility if investors start to worry that expectations have run ahead of fundamentals. How markets balance optimism about long-term AI growth against concerns about overinvestment will be an important driver of overall risk sentiment on Monday. Second, ongoing uncertainty around tariff policy is a clear macro overhang. A current 10% tariff regime, with the possibility of an increase to 15%, keeps pressure on global supply chains, particularly for retailers and manufacturers that rely on cross-border trade. Markets will be watching for any new signals from policymakers or trade negotiators that could clarify whether tariffs are likely to rise, remain in place, or be rolled back. Higher or more persistent tariffs would raise costs for companies, potentially squeeze profit margins, and ultimately weigh on global growth expectations. This uncertainty can make investors more cautious about cyclical sectors and export-oriented economies as the week begins. Third, rising geopolitical tension in the energy market, particularly involving Iran, has pushed crude oil prices higher, with recent moves toward the high-$60s per barrel. If these tensions persist or escalate, they could keep energy prices elevated or volatile. Higher oil prices tend to act like a tax on consumers and businesses, increasing transportation and production costs and potentially dampening discretionary spending. On the other hand, energy producers and related industries may benefit from stronger pricing power and improved earnings prospects. On Monday, investors will be weighing the inflationary risk of higher oil against the earnings support it provides to the energy sector, and what that means for central bank policy expectations later in the year. With no major scheduled earnings or economic releases on Monday itself, global equity markets are likely to take their cues from how investors digest these three themes: enthusiasm and caution around AI and media-driven growth, the unresolved risk of higher tariffs, and the inflation and geopolitical implications of firmer oil prices. Positioning ahead of a busier earnings and data calendar later in the week may also keep trading somewhat sensitive to headlines on trade and geopolitics.