Stocks Muted Before the Open With U.S. Economic Data in Focus, ECB Decision Eyed

June S&P 500 E-Mini futures (ESM25) are up +0.02%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.10% this morning, pointing to a muted open on Wall Street, while investors await a fresh batch of U.S. economic data, remarks from Federal Reserve officials, and an earnings report from semiconductor and software giant Broadcom.

Some positive corporate news is supporting stock index futures, with MongoDB (MDB) surging over +14% in pre-market trading after the database company posted upbeat Q1 results, raised its full-year guidance, and boosted its share buyback program. Also, Five Below (FIVE) climbed more than +5% in pre-market trading after the specialty discount retailer reported forecast-beating Q1 results and issued solid Q2 guidance. Lower bond yields today are also supporting stock index futures.

However, gains in U.S. equity futures are limited amid investor caution ahead of Friday’s payrolls data. Also, trade uncertainty persists as the Trump administration’s deadline for countries to submit their “best offers” for trade deals has passed without any notable developments.

In yesterday’s trading session, Wall Street’s major indexes ended mixed. ON Semiconductor (ON) climbed over +6% and was the top percentage gainer on the S&P 500, extending Tuesday’s gains after the semiconductor firm’s CEO Hassan El-Khoury said he sees early signs of a broad-based recovery in demand. Also, homebuilder stocks advanced after the benchmark 10-year T-note yield slumped, with DR Horton (DHI) rising more than +4% and Lennar (LEN) gaining over +3%. In addition, Guidewire Software (GWRE) surged over +16% after the insurance-software provider posted upbeat FQ3 results and raised its full-year revenue guidance. On the bearish side, Dollar Tree (DLTR) slid more than -8% and was the top percentage loser on the S&P 500 after the discount retailer warned that new U.S. tariffs could slash its Q2 profit by 45% to 50%.

The ADP National Employment report released on Wednesday showed that U.S. private nonfarm payrolls rose by 37K in May, weaker than expectations of 111K and the smallest increase in more than two years. Also, the U.S. ISM services index unexpectedly fell to 49.9 in May, weaker than expectations of 52.0.

“Markets are likely to view this through the lens of disappointment on the real growth side,” said Florian Ielpo at Lombard Odier Investment Managers. 

Meanwhile, the Federal Reserve said Wednesday in its Beige Book survey of regional business contacts that U.S. economic activity declined slightly in recent weeks, signaling that tariffs and heightened uncertainty are hurting the economy. “All districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions,” according to the Beige Book. The report stated that consumer spending either declined slightly or showed no change across most districts, while prices rose at a “moderate” pace. Most regions described employment as “flat,” while wages continued to grow at a “modest” pace. The report said the outlook remained “slightly pessimistic and uncertain, on balance.”

U.S. rate futures have priced in a 95.6% probability of no rate change and a 4.4% chance of a 25 basis point rate cut at June’s monetary policy meeting.

Today, investors will monitor earnings reports from several high-profile companies, with Broadcom (AVGO), Lululemon Athletica (LULU), and Samsara (IOT) slated to release their quarterly results.

On the economic data front, investors will focus on U.S. Initial Jobless Claims data, which is set to be released in a couple of hours. Economists expect this figure to be 236K, compared to last week’s number of 240K.

U.S. Unit Labor Costs and Nonfarm Productivity data will also be closely watched today. Economists forecast Q1 Unit Labor Costs to be +5.7% q/q and Nonfarm Productivity to be -0.8% q/q, compared to the fourth-quarter numbers of +2.0% q/q and +1.7% q/q, respectively.

U.S. Trade Balance data will be released today as well. Economists expect the trade deficit to narrow to -$67.60B in April from -$140.50B in March.

In addition, market participants will parse comments today from Fed Governor Adriana Kugler, Kansas City Fed President Jeff Schmid, and Philadelphia Fed President Patrick Harker.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.318%, down -1.01%.

The Euro Stoxx 50 Index is up +0.35% this morning, extending gains from the prior session following Germany’s approval of a tax relief package, while investor attention turns to the European Central Bank’s monetary policy decision. Construction and technology stocks outperformed on Thursday. At the same time, travel stocks lost ground. Data from the Federal Statistics Office released on Thursday showed that Germany’s factory orders unexpectedly rose in April, defying concerns that U.S. President Trump’s escalating tariffs would dent demand for German goods. Separately, data from Eurostat showed that the Eurozone’s monthly industrial producer prices fell more than expected in April, marking the sharpest drop since April 2023. Meanwhile, investors are awaiting the ECB’s interest rate decision later in the session, with the central bank widely expected to lower the deposit rate by another 25 basis points to 2.00% amid ongoing easing in Eurozone inflation. That would mark the eighth interest rate cut in an easing cycle that may be approaching its end. Investors will likely focus on signals about future moves and on projections that President Christine Lagarde will present. On the trade front, uncertainty persisted as the Trump administration’s deadline for countries to submit their “best offers” for trade deals passed without any notable developments. In corporate news, Wizz Air Holdings Plc (WIZZ.LN) plummeted over -26% after the budget carrier posted weaker-than-expected annual operating profit.

Germany’s Factory Orders and Eurozone’s PPI data were released today.

The German April Factory Orders arrived at +0.6% m/m, stronger than expectations of -1.5% m/m.

Eurozone’s April PPI has been reported at -2.2% m/m and +0.7% y/y, weaker than expectations of -1.8% m/m and +1.2% y/y.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.23%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.51%.

China’s Shanghai Composite Index ended slightly higher today after a private gauge of the nation’s services sector helped ease concerns that the economic recovery has stalled. Technology stocks led the gains on Thursday. Rare earth stocks also climbed after a group representing U.S. auto suppliers urged immediate action to address China’s restricted exports of rare earths, minerals, and magnets. A private sector survey released on Thursday showed that China’s services activity expanded at a faster pace in May, with new orders rising more rapidly than in April, though new export orders fell amid uncertainty related to U.S. tariffs. Still, the benchmark index’s gains were limited amid elevated uncertainty surrounding U.S.-China trade relations. U.S. President Donald Trump said on Wednesday that Chinese President Xi Jinping was tough and “extremely hard to make a deal with,” casting doubt on the prospects for a lasting trade agreement. The focus is now on whether authorities can boost consumption quickly enough to offset the slowdown in external demand. Garrett Melson, a portfolio strategist at Natixis Investment Managers, said, “[While] policy easing continues and trade risks cloud the outlook, the central government has considerable headroom for monetary and fiscal policy easing to support growth.” In other news, Bloomberg reported that Chinese officials summoned senior executives of electric vehicle manufacturers, including BYD, Geely, and Xiaomi, earlier this week to address concerns over the ongoing price war. In corporate news, Beijing Wantai Biological Pharmacy Enterprise jumped +10% after the vaccine maker announced it received approval for its marketing authorization application for its Nine-valent HPV vaccine.

The Chinese May Caixin Services PMI came in at 51.1, stronger than expectations of 51.0.

Japan’s Nikkei 225 Stock Index closed lower today after demand at a 30-year government bond auction was weaker than average. A stronger yen also weighed on investors’ risk appetite. Automobile and shipping stocks led the declines on Thursday. Limiting losses, chip stocks advanced, tracking overnight gains in their U.S. peers. Japan’s 30-year government bond auction drew the weakest demand since 2023, increasing pressure on the government to adjust the issuance of bonds with super-long maturities. Meanwhile, Reuters reported on Thursday that the Bank of Japan is weighing slowing the pace of tapering in its bond purchases starting next fiscal year, in a move that would underscore its aim to prevent major disruptions in the bond market. On the economic front, government data released on Thursday showed that Japanese real wages declined for a fourth straight month in April, weighed down by persistent inflation that has continued to outpace pay increases delivered by companies so far. Inflation-adjusted real wages, a key gauge of households’ purchasing power, declined 1.8% in April from a year earlier, following a revised 1.8% slump in March. Moody’s Analytics economist Stefan Angrick said that Japan’s regular pay growth is expected to slow in the coming months as higher tariffs impact production and shipments, potentially adding further pressure on real wages. In other news, the Nikkei business daily reported that Japan is preparing to propose enhancing cooperation with the U.S. on rare earth supply chains during the upcoming tariff negotiations. In corporate news, Suzuki Motor dropped over -3% after the Nikkei reported that the automaker suspended production of its Swift model due to China’s rare earth export restrictions. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.51% to 23.52.

Pre-Market U.S. Stock Movers

MongoDB (MDB) surged over +14% in pre-market trading after the database company posted upbeat Q1 results, raised its full-year guidance, and boosted its share buyback program.

Five Below (FIVE) climbed more than +5% in pre-market trading after the specialty discount retailer reported forecast-beating Q1 results and issued solid Q2 guidance.

Broadcom (AVGO) rose over +1% in pre-market trading after Erste Group upgraded the stock to Buy from Hold. 

PVH Corp. (PVH) slumped more than -8% in pre-market trading after the owner of the Calvin Klein and Tommy Hilfiger brands cut its full-year profit guidance. It said its outlook reflects “an estimated net negative impact related to the tariffs currently in place for goods coming into the U.S.”

Chewy (CHWY) fell over -2% in pre-market trading after Jefferies downgraded the stock to Hold from Buy with a price target of $43.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - June 5th

Broadcom (AVGO), Lululemon Athletica (LULU), Samsara (IOT), Rubrik (RBRK), DocuSign (DOCU), Brown Forman (BFb), Ciena Corp (CIEN), Toro (TTC), Vail Resorts (MTN), Braze (BRZE), IDT (IDT), Cracker Barrel Old (CBRL), Hello Group (MOMO), Petco Health and Wellness (WOOF), Quanex Building Products (NX), Mission Produce (AVO), Guess (GES), Torrid Holdings (CURV), Concrete Pumping A (BBCP), Lands’ End (LE), Zumiez (ZUMZ), Duluth Holdings (DLTH), AstroNova (ALOT).