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Briefing.com Summary:
*Semiconductor stocks are in charge of an early rebound effort for the stock market.
*Oil prices are down as President Trump once again teases the possibility of a deal with Iran.
*OpenAI filed an S-1 with the SEC to go public.
The stock market bounced back from Friday's losses in yesterday's session, but overall, it was an unimpressive effort. There were some solid gains in the morning trade, but a lot of those gains faded away in the afternoon trade. The S&P 500, up 0.3% for the day, closed near its low for the session, and so did the Nasdaq, which saw a 1.8% gain turn into a 0.9% gain by the closing bell.
Apple (AAPL) played a part in the afternoon fade. Its stock had been up as much as 3.3%, but the Siri AI update at its Worldwide Developers Conference failed to impress investors. Apple finished the session down 1.9%.
The stock market looks determined to give the rebound effort another go this morning. Currently, the S&P 500 futures are up 35 points and are trading 0.5% above fair value, the Nasdaq 100 futures are up 260 points and are trading 0.9% above fair value, and the Dow Jones Industrial Average futures are up 172 points and are trading 0.4% above fair value.
There are some familiar catalysts behind the positive bias.
First, President Trump said a deal with Iran could be reached in the next two or three days and would result in the immediate reopening of the Strait of Hormuz. The market has heard that before, and even though it has yet to see an actual deal, it continues to respect the possibility. WTI crude futures are down $1.92, or 2.1%, to $89.36/bbl.
Secondly, the semiconductor stocks remain magnets for buy-the-dip interest. The VanEck Semiconductor ETF (SMH) is up 1.9%.
These two factors have put most of the charge in the equity futures market and have been accompanied by some added AI buzz from none other than OpenAI, which filed an S-1 with the SEC to go public. The size and timing of its IPO remain undetermined, yet reports suggest it could be a fourth-quarter thing with at least a $1 trillion market capitalization.
Market conditions will have some sway in the exact timing, but the market conditions on the ground today are conducive for a liftoff at the opening bell.
Oil prices are down; the 10-yr note yield is down one basis point to 4.54%; the semiconductor stocks are in a leading position; and China posted stronger-than-expected exports and imports for May.
The U.S. also delivered some pleasing trade data. The trade deficit narrowed to $55.9 billion in April (Briefing.com consensus: -$55.5 billion) from an upwardly revised $56.6 billion (from -$60.3 billion) in March. The narrowing was a function of exports being $8.3 billion more than March exports and imports being $7.6 billion more than March imports.
The key takeaway from the report is that the export strength was concentrated in crude oil exports (+$6.4 billion), fuel oil exports (+$1.3 billion), and other petroleum products (+$1.0 billion), which were boosted by the supply disruptions tied to the difficulties traversing the Strait of Hormuz.
