Stock Index Futures Gain on U.S.-China Trade Optimism, Jobs Report in Focus

June S&P 500 E-Mini futures (ESM25) are up +0.44%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.30% this morning as sentiment got a boost after China said it is assessing the possibility of trade talks with the U.S., with the focus now shifting to the key U.S. payrolls report.

China’s Commerce Ministry stated on Friday that it had observed senior U.S. officials repeatedly voicing their readiness to engage with Beijing on tariffs, and called on Washington to demonstrate “sincerity” toward China. “The U.S. has recently sent messages to China through relevant parties, hoping to start talks with China. China is currently evaluating this,” the ministry added. 

However, disappointing earnings from Apple and Amazon limited gains in stock index futures. Apple (AAPL) fell over -2% in pre-market trading after the iPhone maker reported weaker-than-expected FQ2 sales in China. Also, Amazon.com (AMZN) slid more than -2% in pre-market trading after the world’s largest online retailer provided a below-consensus Q2 operating income forecast.

In yesterday’s trading session, Wall Street’s major indices closed in the green, with the S&P 500 and Dow notching 4-week highs and the Nasdaq 100 posting a 5-week high. Microsoft (MSFT) surged over +7% and was the top percentage gainer on the Dow after the world’s largest software maker reported stronger-than-expected FQ3 results and provided an upbeat FQ4 revenue growth forecast for the Azure cloud unit. Also, Meta Platforms (META) climbed more than +4% after the maker of Facebook and Instagram posted upbeat Q1 results. In addition, Nvidia (NVDA) gained over +2% after Bloomberg reported that the U.S. was considering a possible relaxation of restrictions on the chipmaker’s sales to the United Arab Emirates. On the bearish side, Becton Dickinson & Co. (BDX) tumbled more than -18% and was the top percentage loser on the S&P 500 after cutting its annual adjusted EPS guidance. Also, Qualcomm (QCOM) slumped over -8% and was the top percentage loser on the Nasdaq 100 after the mobile chip designer provided a tepid FQ3 revenue forecast.

Economic data released on Thursday showed that the U.S. ISM manufacturing index fell to a 5-month low of 48.7 in April, though it came in above expectations of 48.0. Also, U.S. March construction spending unexpectedly fell -0.5% m/m, weaker than expectations of +0.2% m/m and the largest decline in 6 months. In addition, the number of Americans filing for initial jobless claims in the past week rose +18K to a 2-month high of 241K, compared with the 224K expected.

Meanwhile, U.S. rate futures have priced in a 93.2% probability of no rate change and a 6.8% chance of a 25 basis point rate cut at next week’s FOMC meeting.

On the earnings front, notable companies like Exxon Mobil (XOM), Chevron (CVX), Cigna (CI), and Apollo Global Management (APO) are slated to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year.

Today, all eyes are focused on the U.S. monthly payroll report, which is set to be released in a couple of hours. Economists, on average, forecast that April Nonfarm Payrolls will come in at 138K, compared to the March figure of 228K.

U.S. Average Hourly Earnings data will also be closely watched today. Economists expect April figures to be +0.3% m/m and +3.9% y/y, compared to the previous numbers of +0.3% m/m and +3.8% y/y.

U.S. Factory Orders data will be released today. Economists foresee this figure coming in at +4.4% m/m in March, compared to the previous number of +0.6% m/m.

The U.S. Unemployment Rate will be reported today as well. Economists forecast that this figure will remain steady at 4.2% in April.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.202%, down -0.69%.

The Euro Stoxx 50 Index is up +1.35% this morning as signs of a possible easing in U.S.-China trade tensions boosted sentiment, while investors digest a wave of corporate earnings reports and key economic data from the region. Mining and bank stocks led the gains on Friday. The benchmark index is on track to end the week higher. Preliminary data from Eurostat released on Friday showed that the Eurozone’s headline inflation remained slightly above the European Central Bank’s target in April, while underlying inflation picked up more than expected, likely causing concern among some ECB policymakers. Separately, a survey showed that Eurozone manufacturing output expanded at the quickest rate in just over three years in April, despite overall factory activity staying in contraction territory, as the region’s three largest economies showed signs of improvement. In corporate news, Shell Plc (SHEL.LN) rose over +3% after the oil major posted better-than-expected Q1 profit and announced a $3.5 billion share buyback. Also, Danske Bank A/S (DANSK.C.DX) gained more than +2% after Denmark’s biggest lender reported stronger-than-expected Q1 profit and reaffirmed its full-year profit guidance. In addition, Airbus SE (AIR.FP) climbed over +4% after the planemaker posted upbeat quarterly results and reaffirmed its full-year guidance.

Eurozone’s Manufacturing PMI, Eurozone’s CPI (preliminary), Eurozone’s Core CPI (preliminary), and Eurozone’s Unemployment Rate were released today.

Eurozone April Manufacturing PMI stood at 49.0, stronger than expectations of 48.7.

Eurozone April CPI came in at +2.2% y/y, stronger than expectations of +2.1% y/y.

Eurozone April Core CPI arrived at +2.7% y/y, stronger than expectations of +2.5% y/y.

Eurozone March Unemployment Rate was 6.2%, weaker than expectations of 6.1%.

Japan’s Nikkei 225 Stock Index (NIK) closed up +1.04%, while mainland China’s financial markets were closed for a holiday.

Japan’s Nikkei 225 Stock Index closed higher today on positive comments from the nation’s chief trade negotiator. A weaker yen also boosted appetite for Japanese stocks. In addition, optimism surrounding potential trade talks between China and the U.S. bolstered sentiment across the region. Pharmaceutical and chemical stocks led the gains on Friday. The benchmark index posted its seventh consecutive session of gains, marking its longest winning streak since August 2023. It also notched a third consecutive weekly gain. Japan’s top trade representative, Ryosei Akazawa, stated on Thursday that he aims to reach a trade agreement with the U.S. in June, with the high-stakes bilateral talks anticipated to speed up in mid-May. His remarks followed the conclusion of the latest round of talks in Washington. Meanwhile, Japan’s Finance Minister Katsunobu Kato said the country’s U.S. Treasury holdings could be a card in its trade talks with Washington. “Whether or not we use that card is a different decision,” he added. On the economic front, government data released on Friday showed that Japan’s unemployment rate unexpectedly edged up in March. In corporate news, Yamato Holdings climbed over +5% after the package delivery services provider issued strong full-year operating profit guidance. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +1.87% to 26.74.

The Japanese March Unemployment Rate was 2.5%, weaker than expectations of 2.4%.

China’s Shanghai Composite Index was closed today for the Labor Day holiday. Mainland China’s financial markets will reopen on Tuesday, May 6th. 

Pre-Market U.S. Stock Movers

Apple (AAPL) fell over -2% in pre-market trading after the iPhone maker reported weaker-than-expected FQ2 sales in China.

Amazon.com (AMZN) slid more than -2% in pre-market trading after the world’s largest online retailer provided a below-consensus Q2 operating income forecast.

Atlassian (TEAM) tumbled over -16% in pre-market trading after the collaboration and productivity software firm issued weak FQ4 revenue guidance.

Reddit (RDDT) climbed more than +8% in pre-market trading after the company posted upbeat Q1 results and gave strong Q2 revenue guidance.

Block (XYZ) plummeted over -21% in pre-market trading after the digital-payments company reported weaker-than-expected Q1 results and cut its full-year gross profit guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - May 2nd

Exxon Mobil (XOM), Chevron (CVX), Eaton (ETN), Cigna (CI), Apollo Global Management (APO), Natwest Group (NWG), Imperial Oil (IMO), DuPont De Nemours (DD), Cboe Global (CBOE), T Rowe (TROW), Brookfield Renewable (BEP), Westlake Chemical (WLK), Magna Intl (MGA), Franklin Resources (BEN), nVent Electric (NVT), The AES (AES), Fluor (FLR), United States Cellular (USM), Brookfield Business (BBU), Madison Square Garden Sports (MSGS), Piper Sandler (PIPR), Telephone&Data Systems (TDS), Cinemark (CNK), Brightspring Health Services (BTSG), Atmus Filtration Tech (ATMU), The Wendy’s Co (WEN), Amneal Pharma (AMRX), Terex (TEX), Arbor (ABR), Criteo Sa (CRTO), Patria Investments (PAX), Perella Weinberg Partners (PWP), WisdomTree (WT), Xenia Hotels & Resorts (XHR), Interface (TILE).