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The market spent two days in anticipation of news from the U.S.-China meeting in London, and last evening, investors finally heard an update. However, that update was somewhat underwhelming since the two sides simply agreed to implement what was already agreed upon during a mid-May meeting in Switzerland.

President Trump touted the significance of the agreement this morning, adding that China will supply rare earth elements to the U.S. up front.

There were some additional trade-related headlines this morning, with Bloomberg reporting that a deal between the U.S. and the EU could be made after the July 9 deadline while Reuters noted that an interim deal with India might be announced by the end of the month.

The market also received some news from Washington, where Republicans are expected to scale back cuts to food stamps and will no longer call for Medicare changes in the reconciliation bill, according to Politico.

Equity futures traded lower in early morning trade, but rallied in reaction to the May CPI report, which was cooler than expected. The S&P 500 futures are now 29 points above fair value.

Total CPI was up 0.1% month-over-month in May (Briefing.com consensus 0.2%) after increasing 0.2% in April. Core CPI, which excludes food and energy, was up 0.1% month-over-month (Briefing.com consensus 0.3%) after increasing 0.2% in April. The All Items Index less shelter was up just 1.5%. On a year-over-year basis, total CPI was up 2.4%, versus 2.3% in April. Core CPI was up 2.8% year-over-year, versus 2.8% in April.

The key takeaway from the report is that both headline and core CPI were lower than expected on a month-over-month basis. While these readings may not give a big boost to near-term rate cut expectations, they should also not cause the market to think that the next cut will be delayed.

Treasuries recovered their opening losses in immediate reaction to the report with the belly showing strength after lagging earlier. The 10-yr yield, meanwhile, is down five basis points at 4.43%, leading into this afternoon's $39 bln 10-yr note reopening.

Quantum stocks are set to receive increased interest today after NVIDIA (NVDA 144.88, +0.93, +0.7%) CEO Huang said during a conference in Paris that quantum computing is reaching an inflection point.