Stock Market Update

The S&P 500 futures are down 38 points and are trading 0.7% below fair value, the Nasdaq 100 futures are down 250 points and are trading 1.4% below fair value, and the Dow Jones Industrial Average futures are down 46 points and are trading 0.1% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are lower. Pre-open declines in NVIDIA (NVDA) and other chipmakers have contributed to the negative bias after NVIDIA said it expects Q1 results to include up to approximately $5.5 billion of charges associated with H20 products due to its license requirement.

The weekly MBA Mortgage Application Index dropped 8.5%. Other data today include the March Retail Sales report at 8:30 ET and the March Industrial Production and Capacity Utilization report at 9:15 ET.

Treasury yields are little changed in front of the data. The 10-yr yield is up one basis point to 4.33% and the 2-yr yield is down one basis point to 3.82%.

In corporate news:

• NVIDIA (NVDA 104.93, -7.27, -6.5%): expects Q1 results to include up to approximately $5.5 bln of charges associated with H20 products for inventory, purchase commitments, and related reserves
• United Airlines (UAL 71.73, +4.73, +7.1%): beats by $0.17, reports revs in-line, TRASM up 0.5%, premium cabin revenue up 9.2%; issues in-line Q2 EPS guidance and provides two sets of EPS guidance for FY25, stating that it's "impossible to predict the macro environment this year with any degree of confidence"; Also is removing 4 ppts of scheduled domestic capacity
• ASML (ASML 654.21, -28.95, -4.2%): beats by €0.56, beats on revs; guides Q2 revs in-line; reaffirms FY25 revs guidance
• J.B. Hunt Transport (JBHT 127.00, -8.11, -6.0%): beats by $0.02, reports revs in-line, intermodal volumes up 8%
• Interactive Brokers (IBKR 159.30, -14.13, -8.5%): misses by $0.04, beats on revs; raises quarterly dividend; announces a four-for-one forward split of its common stock
• Omnicom (OMC 75.00, -1.83, -2.4%): beats by $0.05, reports revs in-line; said it is expanding the range of FY25 organic growth to between 2.5% and 4.5%, and maintaining its adjusted EBITA margin guidance to 10 basis points higher than the 15.5% it achieved in 2024

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a mostly lower showing on Wednesday with Hong Kong's Hang Seng (-1.9%) showing relative weakness. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: -1.9%, China's Shanghai Composite: +0.3%, India's Sensex: +0.4%, South Korea's Kospi: -1.2%, Australia's ASX All Ordinaries: -0.1%.
  • In economic data:
    • China's Q1 GDP 1.2% qtr/qtr (expected 1.4%; last 1.6%); 5.4% yr/yr (expected 5.2%; last 5.4%). March House Prices -4.5% yr/yr (last 0.1%), March Fixed Asset Investment 4.2% yr/yr (expected 4.1%; last 4.1%), March Industrial Production 7.7% yr/yr (expected 5.9%; last 5.9%), and March Retail Sales 5.9% yr/yr (expected 4.2%; last 4.0%). March Unemployment Rate 5.2% (expected 5.3%; last 5.4%)
    • Japan's April Reuters Tankan Index 9 (last -1). February Core Machinery Orders 4.3% m/m (expected 1.1%; last -3.5%); 1.5% yr/yr (expected -1.4%; last 4.4%)
    • South Korea's March Import Price Index 3.4% yr/yr (last 4.3%) and Export Price Index 6.3% yr/yr (last 6.3%)
    • Australia's March MI Leading Index -0.1% m/m (last 0.1%)
  • In news:
    • Semiconductor-related stocks had a weak showing in Japan after the White House informed NVIDIA (NVDA) that it will have to acquire a license to sell H20 chips to China, which is expected to cost the company about $5.5 bln in Q1.
    • A Japanese trade delegation is visiting Washington today.
    • China's National Bureau of Statistics acknowledged that the international environment is causing an unfavorable impact on the country's economy, but macro policies are expected to become more proactive in the coming months.
    • China named a new vice commerce minister and a new top trade negotiator.
• Major European indices trade in the red after two days of gains. STOXX Europe 600: -0.7%, Germany's DAX: -0.4%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.7%, Spain's IBEX 35: -0.4%.
  • In economic data:
    • Eurozone's final March CPI 0.6% m/m, as expected (last 0.4%); 2.2% yr/yr, as expected (last 2.3%). Final March Core CPI 1.0% m/m, as expected (last 0.5%); 2.4% yr/yr, as expected (last 2.6%). February Current Account surplus EUR34.3 bln (expected surplus of EUR37.3 bln; last surplus of EUR35.4 bln)
    • U.K.'s March CPI 0.3% m/m (expected 0.4%; last 0.4%); 2.6% yr/yr (expected 2.7%; last 2.8%). March Core CPI 0.5% m/m, as expected (last 0.4%); 3.4% yr/yr, as expected (last 3.5%). March RPI 0.3% m/m (expected 0.4%; last 0.6%); 3.2% yr/yr, as expected (last 3.4%). March House Prices 5.4% yr/yr (expected 5.1%; last 4.9%)
    • Italy's March CPI 0.3% m/m (expected 0.4%; last 0.2%); 1.9% yr/yr (expected 2.0%; last 1.6%)
  • In news:
    • Chip equipment supplier ASML is down around 5.0% after stating that U.S. tariffs were increasing uncertainty around its outlook, prompting broader declines in the technology sector.
    • Elsewhere, British business supplies distributor Bunzl saw its shares plunge more than 20.0% after cutting its forecast due to economic uncertainty.
    • The European Central Bank is widely expected to announce a 25-basis point rate cut tomorrow.