S&P Futures Gain as Trade Truce Rally Continues, U.S. Economic Data on Tap

June S&P 500 E-Mini futures (ESM25) are trending up +0.19% this morning, with the benchmark index set for one of its strongest weeks this year, as the U.S.-China trade truce continues to bolster sentiment, while investors await a new batch of U.S. economic data and remarks from Federal Reserve officials.

U.S. equity futures also drew support from falling Treasury yields, which continued their slide from Thursday after the latest economic data fueled speculation that the Fed may cut rates earlier than expected to avoid a recession.

In yesterday’s trading session, Wall Street’s major indices ended mixed. Steris Plc (STE) climbed over +8% and was the top percentage gainer on the S&P 500 after the company reported better-than-expected FQ4 life sciences revenue. Also, Cisco Systems (CSCO) rose more than +4% and was the top percentage gainer on the Dow and Nasdaq 100 after the company posted upbeat FQ3 results and raised its full-year guidance. In addition, Foot Locker (FL) jumped over +85% after Dick’s Sporting Goods agreed to buy the company for about $2.4 billion. On the bearish side, UnitedHealth Group (UNH) plunged more than -10% and was the top percentage loser on the Dow after the Wall Street Journal reported that the U.S. Department of Justice was investigating the company for possible Medicare fraud.

Economic data released on Thursday showed that U.S. retail sales rose +0.1% m/m in April, stronger than expectations of no change m/m. Also, the U.S. producer price index for final demand came in at -0.5% m/m and +2.4% y/y in April, weaker than expectations of +0.2% m/m and +2.5% y/y. In addition, U.S. industrial production was unchanged m/m in April, weaker than expectations of +0.2% m/m, while manufacturing production fell -0.4% m/m, weaker than expectations of -0.2% m/m. Finally, the number of Americans filing for initial jobless claims stood at 229K last week, in line with expectations.

“[Yesterday’s] data doesn’t change the narrative. Retail sales suggest consumers are becoming pickier, while there remains no sign of broad-based layoffs. The slowdown in inflation in April provides little comfort as the impact from tariffs is yet to come,” said Ellen Zentner at Morgan Stanley Wealth Management.

Fed Chair Jerome Powell said on Thursday that policymakers are considering adjustments to key elements of the framework that guides their monetary policy decisions, including their perspective on U.S. employment shortfalls and their strategy for achieving the inflation target. He added, “Anchored inflation expectations are critical to everything we do, and we remain fully committed to the 2% target today.” Also, Fed Governor Michael Barr stated that the economy remains on solid footing, but cautioned that tariff-related supply-chain disruptions could lead to slower growth and higher inflation.

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 June’s policy meeting.

Today, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. Economists, on average, forecast that the preliminary May figure will stand at 53.1, compared to 52.2 in April.

U.S. Building Permits (preliminary) and Housing Starts data will also be reported today. Economists expect April Building Permits to be 1.450M and Housing Starts to be 1.360M, compared to the prior figures of 1.467M and 1.324M, respectively.

U.S. Export and Import Price Indexes will be released today as well. Economists anticipate the export price index to be -0.5% m/m and the import price index to be -0.4% m/m in April, compared to the previous figures of unchanged m/m and -0.1% m/m, respectively.

In addition, market participants will be anticipating speeches from Richmond Fed President Tom Barkin and San Francisco Fed President Mary Daly.

Later today, investors will also be monitoring negotiations surrounding the U.S. budget, with its proposed substantial tax cuts and the potential impact these could have on the fiscal deficit.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.415%, down -0.90%.

The Euro Stoxx 50 Index is up +0.59% this morning and is set to post a fifth straight week of gains as easing global trade tensions fueled risk-on sentiment. Also aiding sentiment was the corporate earnings season, which came in better than expected. Healthcare as well as food and beverage stocks led the gains on Friday. Final data from the statistical office Istat released on Friday showed that Italy’s annual inflation rate stood at 1.9% in April, unchanged from March. Separately, data showed that the European Union’s exports to the U.S. reached a record high in March as companies rushed to stockpile goods ahead of an expected increase in U.S. tariffs. Meanwhile, European Central Bank policymaker Martins Kazaks said in an interview with CNBC on Friday that interest rates are “relatively close to the terminal rate,” though he cautioned that uncertainty remains elevated and the environment is susceptible to abrupt shifts that could influence the policy outlook. On the geopolitical front, investors are keeping a close eye on updates from the Russia-Ukraine peace negotiations. In corporate news, Cie Financiere Richemont SA (CFR.Z.IX) climbed over +6% after the Cartier owner posted better-than-expected Q1 revenue.

Italy’s CPI and Eurozone’s Trade Balance data were released today.

The Italian April CPI came in at +0.1% m/m and +1.9% y/y, weaker than expectations of +0.2% m/m and +2.0% y/y.

Eurozone March Trade Balance arrived at 36.8B euros, stronger than expectations of 17.5B euros.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.40%, and Japan’s Nikkei 225 Stock Index (NIK) closed flat.

China’s Shanghai Composite Index closed lower today as renewed U.S.-China tech tensions and a disappointing earnings report from Alibaba weighed on sentiment. Liquor and insurance stocks underperformed on Friday. However, the benchmark index ended the week higher. Reuters reported that the U.S. Commerce Department is weighing the addition of more Chinese firms, including ChangXin Memory, to its restricted export list. The Bureau of Industry and Security is also considering adding subsidiaries of Semiconductor Manufacturing International Corporation and Yangtze Memory Technologies to the “Entity List,” according to the report. Still, some officials are advocating for postponing the move to avoid disrupting ongoing trade talks with Beijing, according to the Financial Times, which first reported the news. Meanwhile, Morgan Stanley analysts said in a note that although the U.S.-China tariff truce is a welcome surprise for investors, achieving a lasting resolution remains difficult due to the complexity of the bilateral relationship. In other news, Chinese Vice President Han Zheng stated on Friday that China and the U.S. have wide-ranging shared interests and significant potential for cooperation. In corporate news, Alibaba Group slid over -4% in Hong Kong after the e-commerce giant posted weaker-than-expected quarterly results. At the same time, NetEase surged more than +13% in Hong Kong after the game operator reported solid Q1 results. Investor attention is now turning to next week’s Chinese economic data, including retail sales and industrial production, for further insight into how trade-related challenges are affecting growth.

Japan’s Nikkei 225 Stock Index ended flat today as investors digested weaker-than-expected GDP data from the country. Chip stocks led the declines on Friday, while retail and pharmaceutical stocks outperformed. Still, the benchmark index notched its fifth consecutive weekly gain. Preliminary government data released on Friday showed that Japan’s economy contracted for the first time in a year and at a sharper rate than anticipated in the first quarter, highlighting its fragility even before feeling the full effects of Trump’s tariff measures. Separately, data showed that Japan’s industrial production was unexpectedly revised upward in March. Meanwhile, Marcel Thieliant of Capital Economics said that Japan’s weaker-than-expected Q1 GDP figures suggest the Bank of Japan may delay its next rate hike. BOJ policy board member Toyoaki Nakamura stated on Friday that the central bank should refrain from raising interest rates for the time being, warning that higher tariffs could disrupt the country’s virtuous cycle of income, spending, and inflation. “As the impact of U.S. tariff policies is currently a widely shared concern, it is necessary to carefully gauge developments in corporate profits, business fixed investment, wage hikes, and other factors,” Nakamura said. In other news, Japanese Finance Minister Katsunobu Kato said on Friday that he would seek to discuss foreign exchange matters with U.S. Treasury Secretary Scott Bessent, emphasizing the shared view that excessive currency volatility is undesirable. In corporate news, Mitsubishi UFJ Financial Group rose nearly +1% after unveiling a share buyback program worth about 250 billion yen ($1.72 billion). The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.97% to 22.94.

The Japanese GDP has been reported at -0.2% q/q and -0.7% y/y in the first quarter, weaker than expectations of -0.1% q/q and -0.2% y/y.

The Japanese March Industrial Production stood at +0.2% m/m, stronger than expectations of -1.1% m/m.

Pre-Market U.S. Stock Movers

Charter Communications (CHTR) rose over +6% in pre-market trading after announcing a merger agreement with privately held Cox Communications in a deal valuing the rival cable company at about $34.5 billion, including debt.

Vistra Corp. (VST) climbed more than +5% in pre-market trading after the utility agreed to acquire seven natural gas generation facilities from Lotus Infrastructure Partners for $1.9 billion.

Applied Materials (AMAT) slumped over -6% in pre-market trading after the semiconductor equipment maker provided a tepid FQ3 revenue forecast.

Take-Two Interactive Software (TTWO) fell more than -3% in pre-market trading after the videogame maker posted mixed FQ4 results and issued below-consensus FY26 revenue guidance.

Doximity (DOCS) tumbled over -21% in pre-market trading after the online medical platform gave disappointing revenue guidance for FQ1 and FY26.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - May 16th

RBC Bearings (RBC), Brady (BRC), Flowers Foods (FLO), RLX Technology (RLX), Dingdong (DDL), Mastech (MHH), So-Young (SY), Wrap Tech (WRAP), Volitionrx Ltd (VNRX).