Stock Market Update

The S&P 500 futures are up 12 points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 80 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 37 points and are trading 0.1% above fair value.

Contracts linked to the S&P 500, the Nasdaq 100, and the Dow industrials are higher. Carryover momentum after this week's positive start has contributed to the upside moves. 

There's not a lot of market-moving news this morning, but there's influential earnings reports and economic data to get through this week. Cisco (CSCO) reports quarterly results after the close, Walmart (WMT) and Deere (DE) report earnings tomorrow morning, and Applied Materials (AMAT) reports results Thursday afternoon. 

Market participants get another read on inflation in the form of the April Producer Price Index tomorrow at 8:30 ET, along with the Retail Sales report for April, weekly jobless claims, and other data. The preliminary May University of Michigan Consumer Sentiment survey is released Friday at 10:00 ET.

The 10-yr yield is down three basis points to 4.47% and the 2-yr yield is down one basis point to 4.01%.

In corporate news:

• Super Micro Computer (SMCI 45.02, +6.13, +15.8%): DataVolt announces landmark deal with Supermicro (SMCI) to accelerate adoption of rack-scale total liquid cooling IT solutions for future-ready AI data centers
• Alcon (ALC 87.21, -6.04, -6.5%): misses by $0.02, misses on revs; guides FY25 EPS below consensus, revs above consensus
• American Eagle (AEO 11.19, -1.53, -12.0%): guides Q1 revs in-line, comps -3%, higher than planned promotional activity in Q1, withdraws FY25 guidance
• Warner Bros. Discovery (WBD 9.16, -0.20, -0.2%): ticking lower as CNN plans to roll out a subscription streaming service this fall, according to Deadline
• Tesla (TSLA 343.35, +9.28, +2.8%): board considers new pay package for CEO Elon Musk, according to FT; will resume shipping parts for CyberCab production in U.S., according to Reuters

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: +2.3%, China's Shanghai Composite: +0.9%, India's Sensex: +0.2%, South Korea's Kospi: +1.2%, Australia's ASX All Ordinaries: +0.1%.
  • In economic data:
    • China's April New Loans CNY280.0 bln (expected CNY710.0 bln; last CNY3.64 trln), April Outstanding Loan Growth 7.2% yr/yr (expected 7.4%; last 7.4%), and April total social financing CNY1.16 trln (expected CNY1.22 trln; last CNY5.89 trln)
    • Japan's April PPI 0.2% m/m, as expected (last 0.4%); 4.0% yr/yr, as expected (last 4.3%)
    • South Korea's April Unemployment Rate 2.7% (last 2.9%)
    • India's April WPI Inflation 0.85% yr/yr (expected 1.76%; last 2.05%)
    • Australia's Q1 Wage Price Index 0.9% qtr/qtr (expected 0.8%; last 0.7%); 3.4% yr/yr (expected 3.2%; last 3.2%)
    • New Zealand's April Electronic Card Retail Sales 0.0% m/m (last -0.8%); -0.3% yr/yr (last -1.6%)
  • In news:
    • China Securities Journal reported that stock buybacks by Chinese companies increased in April.
    • Korea Development Institute lowered its domestic growth forecast for 2025 to 0.8% from 1.6%.
    • There was a renewed uptick in expectations for another rate hike from the Bank of Japan this year after the temporary tariff reduction between U.S. and China.
• Major European indices trade on a mostly lower note. STOXX Europe 600: -0.1%, Germany's DAX: -0.3%, U.K.'s FTSE 100: UNCH, France's CAC 40: -0.5%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.
  • In economic data:
    • Germany's April CPI 0.4% m/m, as expected (last 0.3%); 2.1% yr/yr, as expected (last 2.2%)
    • Spain's April CPI 0.6% m/m, as expected (last 0.1%); 2.2% yr/yr, as expected (last 2.3%). April Core CPI 2.4% yr/yr, as expected (last 2.0%)
  • In news:
    • There's underlying concerns about the sustainability of the U.S.-China de-escalation and the broader economic impact of remaining tariffs, with shipping giant Hapag-Lloyd cautioning about ongoing disruptions to global trade.
    • Bank of France expects only slight domestic growth in Q2 after a 0.1% expansion in Q1.
    • European Central Bank policymaker Villeroy de Galhau said that another rate cut is likely to take place by the summer while policymaker Nagel said that the June rate decision will be data dependent.