Stock Market Update

The stock market is on course for a lower start with futures on the S&P 500 trading 61 points below fair value.

The market was on course for a steady start to the final session of the week, which saw pressure on equities amid rising Treasury yields. Treasury futures have seen some overnight gains that are pushing yields down with the 30-yr yield lower by six basis points at 5.01% while the 10-yr yield is also down six basis points, hovering at 4.49%.

However, futures faced some recent pressure after President Trump said that a 50% tariff should be placed on imports from the EU on June 1. This follows an FT report that President Trump is unhappy with the pace of trade negotiations with the EU and is threatening higher tariffs unless the EU agrees to reduce its own import duties.

In U.S. corporate news:

• Autodesk (ADSK 301.05, +6.05, +2.1%): beat Q1 expectations, issued above-consensus guidance for Q2, and issued in-line guidance for FY26.
• Intuit (INTU 721.87, +55.80, +8.4%): beat Q3 expectations and issued above-consensus guidance for Q4.
• Deckers Outdoor (DECK 102.53, -23.56, -18.7%): beat Q4 expectations, issued below-consensus guidance for Q1, announced a buyback, and said it will not provide guidance for FY26.
• Ross Stores (ROST 133.63, -18.62, -12.2%): beat Q1 EPS expectations, issued below-consensus EPS guidance for Q2, and withdrew its guidance for the year.

Reviewing overnight developments:

• Asian markets ended the week on a mostly higher note. Japan's Nikkei +0.5%, Hong Kong's Hang Seng +0.2%, China's Shanghai Composite -0.9%.
  • In economic data:
    • Japan's April National CPI 0.4% m/m (last 0.3%); 3.6% yr/yr (last 3.6%). April National Core CPI 3.5% yr/yr (expected 3.4%; last 3.2%).
    • South Korea's April PPI -0.1% m/m (last 0.0%); 0.9% yr/yr (last 1.3%).
    • Singapore's April CPI -0.3% m/m (last -0.1%); 0.9% yr/yr (expected 0.8%; last 0.9%). April Core CPI 0.7% yr/yr (expected 0.5%; last 0.5%).
    • New Zealand's Q1 Retail Sales 0.8% qtr/qtr (expected 0.0%; last 0.9%) and Core Retail Sales 0.4% qtr/qtr (expected 0.7%; last 1.4%)
  • In news:
    • Nikkei reported that Japanese corporate profits are on course to see their first annual decline in six years.
    • South Korea's finance ministry said that it will closely monitor bond markets in U.S. and Japan.
    • Japan's top trade negotiator is scheduled to return to Washington for talks at the end of next week.
• Major European indices are mixed. Germany's DAX +0.1%, U.K.'s FTSE UNCH, France's CAC -0.5%.
  • In economic data:
    • Germany's Q1 GDP 0.4% qtr/qtr (expected 0.2%; last -0.2%); 0.0% yr/yr (expected -0.2%; last -0.2%).
    • U.K.'s April Retail Sales 1.2% m/m (expected 0.3%; last 0.1%); 5.0% yr/yr (expected 4.5%; last 1.9%). April Core Retail Sales 1.3% m/m (expected 0.3%; last 0.2%); 5.3% yr/yr (expected 4.4%; last 2.6%).
    • France's May Consumer Confidence 88 (expected 93; last 91).
  • In news:
    • FT reported that the U.S. is unhappy with the pace of trade talks with the EU.
    • Bank of England Governor Bailey said that more signs of receding inflation are needed in order to cut rates.
    • European Central Bank policymakers Rehn and Stournaras spoke in favor of a rate cut in June.