Stocks Set to Open Muted After CPI Shows a Slight Increase in Inflation

June S&P 500 E-Mini futures (ESM25) are up +0.05%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.26% this morning, after investors digest the release of key U.S. inflation data.

The Consumer Price Index (CPI) saw a 0.2% increase (seasonally adjusted) over the month. This brings the 12-month inflation rate to 2.3%, marking the lowest such rate since February 2021. A similar trend was observed with core CPI, which also rose by 0.2% for the month, reaching a year-over-year level of 2.8%.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed sharply higher after the U.S. and China agreed to temporarily suspend most tariffs on each other’s products. The Magnificent Seven stocks rallied, with Amazon.com (AMZN) surging over +8% and Meta Platforms (META) rising more than +7%. Also, chip stocks jumped, with Microchip Technology (MCHP) climbing more than +10% and ON Semiconductor (ON) gaining over +8%. In addition, NRG Energy (NRG) soared more than +26% and was the top percentage gainer on the S&P 500 after the company posted upbeat Q1 results and acquired a fleet of natural gas-fired power plants from LS Power Equity Advisors for about $12 billion, including debt. On the bearish side, Cigna Group (CI) slid over -5% after President Trump proposed a plan to “cut out” drug industry middlemen in an effort to lower healthcare costs.

“With good news on the trade front poised to give stocks a boost at the start of the week, it will be up to inflation data, retail sales, and earnings to sustain the momentum,” wrote Chris Larkin at E*Trade from Morgan Stanley.

Meanwhile, a White House executive order overnight said the U.S. will reduce the so-called de minimis tariff on low-value packages from China, including Hong Kong, from 120% to 54% starting May 14th. However, a flat fee of $100 will still apply.

Goldman Sachs lowered its estimated risk of a recession in the U.S. to 35% from 45% following a temporary tariff truce with China that raised hopes for a potential de-escalation in the global trade war.

Fed Governor Adriana Kugler stated on Monday that despite the recently announced tariff reductions on China, U.S. tariff policies are likely to boost inflation and dampen economic growth. “Trade policies are evolving and are likely to continue shifting, even as recently as this morning. Still, they appear likely to generate significant economic effects even if tariffs stay close to the currently announced levels,” Kugler said.

U.S. rate futures have priced in a 91.8% chance of no rate change and an 8.2% chance of a 25 basis point rate cut at the next central bank meeting in June.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.454%, down -0.02%.

The Euro Stoxx 50 Index is up +0.17% this morning as investors shift their focus from the U.S.-China trade truce to corporate earnings and the global economic outlook. Healthcare and utilities stocks advanced on Tuesday, while real estate stocks underperformed. Data from the Office for National Statistics released on Tuesday showed that the U.K.’s labor market softened in March as wage growth slowed and unemployment ticked higher, potentially raising the likelihood of interest-rate cuts by the Bank of England. Separately, the ZEW Economic Research Institute reported that German investor morale brightened more than expected in May. Meanwhile, European Central Bank Governing Council member Gabriel Makhlouf stated on Tuesday that uncertainty in the global economy is expected to persist even if the global trade war turns out to be short-lived. Investor focus remains on key regional economic data releases this week, including Eurozone industrial production data for March, the second estimate of first-quarter GDP, and the flash estimate of first-quarter employment data. In corporate news, Bayer AG (BAYN.D.DX) surged over +9% after the German chemicals giant posted better-than-expected Q1 results. At the same time, Munich Re (MUV2.D.DX) fell more than -3% after the world’s largest reinsurance company declared an 800 million euro ($889 million) loss in Q1 due to the wildfires in California.

U.K.’s Average Earnings ex Bonus, U.K.’s Unemployment Rate, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.

U.K. Average Earnings ex Bonus arrived at 5.6% in the three months to March, weaker than expectations of 5.7%.

The U.K. Unemployment Rate was 4.5% in the three months to March, in line with expectations.

The German May ZEW Economic Sentiment Index stood at 25.2, stronger than expectations of 10.7.

The Eurozone May ZEW Economic Sentiment Index came in at 11.6, stronger than expectations of -3.5.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.17%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.43%.

China’s Shanghai Composite Index ended slightly higher today, giving up most of its earlier gains as initial euphoria over the tariff truce with the U.S. faded amid worries that Beijing would hold back on stimulus measures. Bank and energy stocks outperformed on Tuesday. China and the U.S. on Monday agreed to reduce tariffs for 90 days following weekend trade talks in Geneva. The combined 145% U.S. tariffs on most Chinese imports will be lowered to 30%, including those related to fentanyl, while the 125% Chinese tariffs on most U.S. goods will be cut to 10%, according to the statement and officials at a Monday briefing. Still, some investors viewed the agreement as lowering the likelihood that Beijing will introduce additional stimulus measures. Others turned their attention to the material impact of still-elevated U.S. tariffs and the uncertainties surrounding future bilateral negotiations in the months ahead. Meanwhile, economists cautioned that further negotiations could turn out to be a lengthy process. Lu Ting, chief China economist at Nomura in Hong Kong, said, “It might be just the beginning of the inevitable collision of the two largest economies.” In corporate news, RemeGen climbed over +7% after its disitamab vedotin drug for urothelial carcinoma delivered positive results in a phase 3 clinical trial.

Japan’s Nikkei 225 Stock Index closed higher and hit a 3-month high today as sentiment got a boost after the U.S. and China agreed to temporarily suspend most tariffs on each other’s products. Shipping and pharmaceutical stocks led the gains on Tuesday. Automobile stocks also advanced as the yen fell more than 2% overnight against the dollar, as the U.S.-China trade truce weakened demand for traditional safe-haven assets. The Japanese currency trimmed some of its losses on Tuesday after Finance Minister Katsunobu Kato announced plans to discuss exchange rates with his U.S. counterparts in Canada next week. Meanwhile, Bank of Japan board members signaled their intention to pursue additional rate hikes while emphasizing the need to remain cautious given the potential economic effects of U.S. tariffs, according to a summary of opinions from their April 30th to May 1st meeting. BOJ Deputy Governor Shinichi Uchida told parliament on Tuesday that the central bank anticipates continued increases in wages and prices, keeping policymakers on track to further raise interest rates. Investors are still awaiting any updates on a trade deal between Japan and the U.S., after the Asian country was among the first to formally enter negotiations. Japanese Prime Minister Shigeru Ishiba plans to reach an agreement with the U.S. in July, according to the Asahi newspaper. Ishiba said on Monday that Japan would not agree to any initial trade deal with the U.S. that did not include an accord on autos. Investor attention is also centered on Japan’s preliminary GDP data, scheduled for release on Friday, which is expected to show that the nation’s economy contracted in the first quarter for the first time in a year. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -8.60% to 22.10.

Pre-Market U.S. Stock Movers

UnitedHealth Group (UNH) slid more than -8% in pre-market trading after the insurer announced the resignation of CEO Andrew Witty and suspended its 2025 guidance.

Coinbase Global (COIN) surged over +9% in pre-market trading after S&P Dow Jones Indices announced that the company would join the S&P 500 Index, effective May 19th.

Boeing (BA) gained about +0.8% in pre-market trading after Bloomberg News reported that China removed a month-long ban on airlines taking delivery of the company’s planes.

Rigetti Computing (RGTI) plunged over -11% in pre-market trading after the quantum-computing company posted downbeat Q1 results.

Hertz (HTZ) slumped more than -7% in pre-market trading after reporting weaker-than-expected Q1 results.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - May 13th

Sea (SE), Nu Holdings (NU), Tencent Music Entertainment Group (TME), Venture Global (VG), Cyberark Software (CYBR), ChipMOS Tech (IMOS), Exelixis (EXEL), Loar Holdings LLC (LOAR), CAE Inc. (CAE), Legend Bio (LEGN), Landstar (LSTR), Silicon Labs (SLAB), Oklo Inc (OKLO), IGT (IGT), Life360 (LIF), Camtek (CAMT), Under Armour (UAA), Flowco Holdings (FLOC), TWFG (TWFG), Intuitive Machines (LUNR), Danaos (DAC), Kindercare Learning (KLC), Nayax (NYAX), Grail (GRAL), Webtoon Entertainment (WBTN), Paysafe (PSFE), Endeavour Silver (EXK), HUYA (HUYA), Anavex Life Sciences (AVXL), SimilarWeb (SMWB), Doubledown (DDI), Gladstone Investment (GAIN), Eton Pharmaceuticals (ETON), Perion Network (PERI), Neuropace (NPCE), Zevra Therapeutics (ZVRA), Clearpoint Neuro (CLPT).