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The stock market had a bullish-minded start to the week, enthused by the president's decision to pause the 50% tariff rate on the EU until July 9 to allow more time to negotiate a trade deal and a stark drop in interest rates tied to reports that Japan is considering reducing its ultra-long bond issuance.
The latter is apt to be a stronger possibility after Japan's 40-yr government bond auction met with the weakest demand since July. The weak auction led to some overnight selling of Treasury futures, but that selling has faded, and Treasury yields have returned close to yesterday's cash settlement levels.
The 10-yr note yield is up two basis points to 4.45%, and the 30-yr bond yield is up one basis point to 4.94%. Participants will be watching Treasury yields closely as the market digests the $70 billion 5-yr note sale at 1:00 p.m. ET and the release of the FOMC Minutes for the May 6-7 meeting at 2:00 p.m. ET.
The other focal point of consequence will be NVIDIA's (NVDA) earnings report, yet that doesn't get released until after the close. Dow component Salesforce (CRM) will also release its quarterly results after the close. NVIDIA, however, promises to be the center of attention, given that it is the center of the AI galaxy and has so many companies revolving around the availability of its GPUs.
To put it simply, NVIDIA's report will be a market mover, which is likely why there isn't a ton of conviction in the equity futures trade.
Currently, the S&P 500 futures are up four points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 47 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are down eight points and are trading in line with fair value.
NVIDIA is up 0.8%, and other mega-cap stocks are posting modest gains. That is acting as a key source of support for the broader market, which is also processing a batch of mixed results and guidance from retailers Macy's (M), Dick's Sporting Goods (DKS), and Abercrombie & Fitch (ANF).
There is no U.S. economic data of note today, although it was reported earlier that the MBA's Mortgage Applications Index declined 1.2% week-over-week, with purchase applications up 2% and refinance applications down 7% in the face of rising mortgage rates.
