S&P Futures Gain With Investors in Risk-On Mood, Fed Speak on Tap

June S&P 500 E-Mini futures (ESM25) are trending up +0.28% this morning, extending the recent rally driven by a soft U.S. inflation reading and the U.S.-China trade truce that pushed the benchmark index into positive territory for the year.

In yesterday’s trading session, Wall Street’s main stock indexes ended mixed. Nvidia (NVDA) climbed over +5% and was the top percentage gainer on the Dow after CEO Jensen Huang announced that the chipmaker will supply semiconductors to Saudi Arabian AI firm Humain for a large-scale data center project. Also, Palantir Technologies (PLTR) surged more than +8% and was the top percentage gainer on the Nasdaq 100 after CTBC Securities Investment Service initiated coverage of the stock with a Buy rating and $142.30 price target. In addition, Coinbase Global (COIN) soared over +23% after S&P Dow Jones Indices announced that the company would join the S&P 500 Index, effective May 19th. On the bearish side, UnitedHealth Group (UNH) tumbled more than -17% and was the top percentage loser on the S&P 500 and Dow after the insurer announced the resignation of CEO Andrew Witty and suspended its 2025 guidance.

The U.S. Bureau of Labor Statistics report released on Tuesday showed that consumer prices rose +0.2% m/m in April, weaker than expectations of +0.3% m/m. On an annual basis, headline inflation unexpectedly eased to +2.3% in April from +2.4% in March, weaker than expectations of +2.4% and the smallest increase in 4 years. Also, the core CPI, which excludes volatile food and fuel prices, rose +0.2% m/m and +2.8% y/y in April, compared to expectations of +0.3% m/m and +2.8% y/y.

“We don’t really see much impact from tariffs yet. It’s still too early for that, but what we do see is that inflation is holding up decently well. It’s a good sign that inflation isn’t a problem heading into an event-driven shock like tariffs,” said Mike Reynolds, vice president of investment strategy at Glenmede.

Meanwhile, U.S. rate futures have priced in a 91.8% probability of no rate change and an 8.2% chance of a 25 basis point rate cut at the June FOMC meeting.

Today, investors will hear perspectives from Fed Vice Chair Philip Jefferson and San Francisco Fed President Mary Daly.

On the earnings front, network infrastructure provider Cisco Systems (CSCO) is set to report its FQ3 earnings results today.

On the economic data front, investors will focus on U.S. Crude Oil Inventories data, which is set to be released later in the day. Economists expect this figure to be -2.000M, compared to last week’s value of -2.032M.

Investor attention for the remainder of the week is focused on April retail sales data and the University of Michigan’s preliminary May consumer sentiment index for clues on how the prospect of tariffs is affecting consumer sentiment and spending. Walmart’s earnings report on Thursday will also be closely monitored for insights into consumer spending and the broader economic climate.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.460%, down -0.87%.

The Euro Stoxx 50 Index is down -0.35% this morning, taking a breather after the recent rally fueled by easing global trade tensions. Technology stocks underperformed on Wednesday. Final data from the Federal Statistical Office released on Wednesday confirmed that Germany’s annual inflation rate eased to 2.1% in April from 2.2% in March. Separately, final data from the National Statistics Institute showed that Spain’s annual inflation rate stood at 2.2% in April, confirming the flash estimate. Meanwhile, European Central Bank policymaker Joachim Nagel said on Wednesday that there is a “good probability” inflation in the Eurozone will move toward the 2% target. In other news, Germany’s economy ministry stated on Wednesday that trade and economic uncertainty would remain high, pointing to the U.S.’s unclear tariff policy. In corporate news, Imperial Brands Plc (IMB.LN) slumped over -6% after the cigarette maker announced that CEO Stefan Bomhard will retire. At the same time, Burberry Group Plc (BRBY.LN) climbed more than +7% after the luxury trenchcoat maker reported better-than-expected FQ4 sales and said it will cut around 1,700 jobs.

Germany’s CPI and Spain’s CPI data were released today.

The German April CPI came in at +0.4% m/m and +2.1% y/y, in line with expectations.

The Spanish April CPI came in at +0.6% m/m and +2.2% y/y, in line with expectations.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.86%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.14%.

China’s Shanghai Composite Index ended higher today as the U.S.-China trade truce continued to boost sentiment, while investors looked ahead to earnings reports from several major Chinese technology companies. Bank and insurance stocks led the gains on Wednesday. Shipping and port stocks also advanced on hopes that the easing of the U.S.-China trade tensions would spur a recovery in shipping demand and freight rates. The U.S. reduced the “de minimis” tariff on low-value shipments from China, including Hong Kong, from 120% to 54%, effective today, further easing tensions in a potentially damaging trade war between the world’s two largest economies. Meanwhile, Chinese stocks have regained all the ground lost following the announcement of U.S. President Donald Trump’s sweeping tariffs on April 2nd. Goldman Sachs on Tuesday boosted China’s growth forecast for this year to 4.6% from 4%, noting that the easing of the trade war lowers the risk of a more pronounced economic slowdown. Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong, said, “As macro risks recede, investors will again pay more attention to earnings and prospects for renewed strength in tech.” In corporate news, JD.com rose over +3% in Hong Kong after the e-commerce retailer posted better-than-expected Q1 revenue. Investor focus is now on earnings reports from bellwethers Tencent and Alibaba. The results could shed light on how the tech sector’s two biggest players are navigating the uncertain geopolitical environment and indicate whether Chinese tech stocks might continue their rally.

Japan’s Nikkei 225 Stock Index gave up earlier gains and closed slightly lower today as investors opted to take profits after a strong rally. Automobile stocks underperformed on Wednesday. At the same time, chip stocks advanced, tracking overnight gains in their U.S. peers. The benchmark index hit a 3-month high on Tuesday after the U.S. and China agreed to temporarily suspend most tariffs on each other’s products. That boosted hopes for more deals between major economies, with investors awaiting any updates on a trade agreement between Japan and the U.S., after the Asian nation was one of the first to officially begin negotiations. Meanwhile, data released on Wednesday showed that Japan’s wholesale inflation hit 4.0% in April as firms continued passing on higher raw material and labor costs, highlighting price pressures that are likely to keep the Bank of Japan on track for additional interest rate hikes. BOJ Deputy Governor Shinichi Uchida told parliament on Tuesday that the central bank anticipates continued increases in wages and prices. In corporate news, Nissan Motor fell -0.7% after the carmaker reported a quarterly loss and said it will cut 20,000 jobs. At the same time, SoftBank Group gained over +3% after the tech investment conglomerate posted better-than-expected annual net profit. Also, Sony Group rose more than +3% after the company announced plans to repurchase up to 250 billion yen ($1.7 billion) worth of shares over the next year. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -1.13% to 21.85.

The Japanese April PPI has been reported at +0.2% m/m and +4.0% y/y, in line with expectations.

Pre-Market U.S. Stock Movers

Nvidia (NVDA) rose more than +1% in pre-market trading, extending yesterday’s gains following CEO Huang’s announcement that the chipmaker was partnering with Humain on a massive data center project.

PVH Corp. (PVH) gained over +2% in pre-market trading after Jefferies upgraded the stock to Buy from Hold with a price target of $105.

Exelixis (EXEL) climbed more than +5% in pre-market trading after the biotechnology firm posted upbeat Q1 results and raised its full-year revenue guidance.

American Eagle Outfitters (AEO) plunged over -13% in pre-market trading after the apparel chain posted downbeat preliminary Q1 results and withdrew its full-year guidance due to macro uncertainty.

AbbVie (ABBV) fell nearly -1% in pre-market trading after Citi downgraded the stock to Neutral from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - May 14th

Cisco (CSCO), CoreWeave (CRWV), STERIS (STE), Dynatrace Inc (DT), Centrais Eletricas Brasileiras DRC (EBR), MakeMyTrip (MMYT), Stantec (STN), Nextracker (NXT), GlobalE Online (GLBE), Cellebrite (CLBT), Tower (TSEM), Boot Barn Holdings (BOOT), DXC Technology (DXC), Scholar Rock (SRRK), Dlocal (DLO), Everus Construction (ECG), Hawkins (HWKN), New Fortress Energy (NFE), Fidelis Insurance Holdings (FIHL), Star Bulk Carriers (SBLK), Arcos Dorados (ARCO), Ibotta (IBTA), Karooooo (KARO), ARS Pharmaceuticals (SPRY), Endava (DAVA), SFLoration Ltd (SFL), MYT Netherlands (MYTE), Capital Southwest (CSWC), TMC the metals company (TMC), Smith Douglas Homes (SDHC), Navigator Holdings (NVGS).