Stock Market Update

The S&P 500 futures are down ten points and are trading 0.2% below fair value, the Nasdaq 100 futures are down ten points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 267 points and are trading 0.6% below fair value.

Contracts linked to the S&P 500, the Nasdaq 100, and the Dow industrials are lower after yesterday's big rally. Only modest losses are indicated at the open, reflecting resilience in the market.

Sentiment may shift following the latest read on inflation in the form of the April Consumer Price Index (CPI) and core-CPI at 8:30 ET. 

Other data today included the NFIB Small Business Optimism Survey for April, which declined to 95.8 from 97.4.

The 10-yr yield is down one basis point from yesterday's settlement at 4.45% and the 2-yr yield is down two basis points to 3.98%.

In corporate news:

• UnitedHealth (UNH 336.00, -42.75, -11.3%): announces leadership transition; Stephen Hemsley named CEO; suspends 2025 outlook; expects to return to growth in 2026
• FedEx (FDX 234.20, +1.25, +0.5%): moving on report of deal with Amazon, according to Business Insider
• Landsea Homes (LSEA 11.22, +4.21, +59.9%): to be acquired by Apollo portfolio company for $11.30/sh in cash, to become a private company
• Coinbase (COIN 226.80, +19.58, +9.5%): will replace Discover Financial Services (DFS) in the S&P 500 effective prior to the opening of trading on Monday, May 19.
• Capital One (COF 200.99, +1.04, +0.5%): is acquiring Discover Financial Services in a deal expected to be completed soon, pending final closing conditions.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region finished Tuesday on a mostly higher note while Hong Kong's Hang Seng (-1.9%) gave back some of yesterday's gain. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: -1.9%, China's Shanghai Composite: +0.2%, India's Sensex: -1.6%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +0.5%.
  • In economic data:
    • India's April CPI 3.16% yr/yr (expected 3.27%; last 3.34%)
    • Australia's May Westpac Consumer Sentiment 2.2% (last -6.0%). March Building Approvals -8.8%, as expected (last -0.3%) and Private House Approvals -4.5% m/m, as expected (last 1.0%). April NAB Business Confidence -1 (last -2) and NAB Business Survey 2 (last 4)
  • In news:
    • The White House noted that the tariff on de minimis shipments from China will be lowered to 54% from 120% with a minimum $100 flat fee remaining in place.
    • The Bank of Japan's latest summary of opinions noted that the 2.0% inflation target is likely to be realized.
    • Thailand's government submitted a tariff proposal to U.S. officials.
• Major European indices trade in the green, adding to yesterday's gains. STOXX Europe 600: +0.2%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +1.1%.
  • In economic data:
    • Eurozone's May ZEW Economic Sentiment 11.6 (expected -3.5; last -18.5)
    • Germany's May ZEW Economic Sentiment 25.2 (expected 10.7; last -14.0) and ZEW Current Conditions -82.0 (expected -77.0; last -81.2)
    • U.K.'s March Average Earnings Index + Bonus 5.5% yr/yr (expected 5.2%; last 5.7%). March three-month employment change 112,000 (expected 120,000; last 206,000), and March Unemployment Rate 4.5%, as expected (last 4.4%)
  • In news:
    • The U.K. released mixed employment data, showing a slight rise in unemployment, which added to expectations of further Bank of England easing.
    • Meanwhile, Germany's ZEW Economic Sentiment improved in May (25.2; prior -14.0), though the Current Conditions Index (-82.0; prior -81.2) worsened.
    • Bayer is up sharply after beating quarterly expectations.