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The stock market is on track for a lower start after a night of some weakness in global equities alongside strength in sovereign debt, which invited additional profit taking after yesterday's dip on Wall Street. The S&P 500 futures trade 13 points below fair value.

The Trump administration's trade policy remains in focus after the president said that he will send letters with trade term offers to different countries. These offers are unlikely to leave much room for negotiation since President Trump said that these offers will come with a "take it or leave it" caveat. He also said that the EU wants to negotiate and that he will revisit the subject in a week.

Besides the toughening trade posture, geopolitical concerns are also in the picture after the U.S. government granted permission to Embassy staff in Baghdad to leave voluntarily. This news led to an afternoon rally in the price of oil yesterday, but some of that advance is being reversed this morning. CBS News reported last evening that Israel signaled readiness to launch an operation in Iran, adding to the budding concerns about stability in the Middle East.

The early weakness in futures is meeting some resistance resulting from a solid pre-market gain in Oracle (ORCL 191.60, +15.22, +8.6%) after the company beat Q4 expectations and issued in-line guidance for Q1. Conversely, Boeing (BA 201.66, -12.34, -5.8%) is down sharply after an Air India 787 crashed shortly after take-off.

Economic data released this morning included the Producer Price Index for final demand, which increased 0.1% month-over-month in May (Briefing.com consensus 0.2%) after decreasing a revised 0.2% (from -0.5%) in April. The Producer Price Index for final demand, less foods and energy, also increased 0.1% month-over-month (Briefing.com consensus 0.3%), while the April reading was revised up to -0.2% from -0.4%. On a year-over-year basis, the index for final demand was up 2.6%, versus an upwardly revised 2.5% in April (from 2.4%), while the index for final demand, less foods and energy, was up 3.0%, versus an upwardly revised 3.2% (from 3.1%) in April.

The key takeaway from the report is that the positive impact of a cooler-than-expected reading is largely being offset by upward revisions to readings from April. That said, the year-over-year Core PPI rate decelerated to 3.0% from 3.2%, which is a positive development.

Separately, initial jobless claims for the week ending June 7 hit 248,000 (Briefing.com consensus 250,000), unchanged from the prior week's upwardly revised level (from 247,000). Continuing jobless claims for the week ending May 31 increased by 54,000 to 1.956 million from last week's downwardly revised 1.902 million (from 1.904 million).

The key takeaway from the report is that continuing claims reached a level not seen since late 2021, which will invite some questions about the strength of the labor market since laid-off workers are having an increasingly difficult time finding new jobs quickly.

Treasuries are holding onto their early gains in reaction to the data with the 10-yr yield falling six basis points to 4.36% while the 30-yr yield is down five basis points at 4.85% ahead of today's $22 bln 30-yr bond reopening.