Stock Market Update

The S&P 500 futures are down 40 points and are trading 0.8% below fair value, the Nasdaq 100 futures are down 210 points and are trading 1.1% below fair value, and the Dow Jones Industrial Average futures are down 263 points and are trading 0.6% below fair value.

Early trading features a negative bias. Ongoing consolidation efforts are a factor in the downside bias, along with renewed uncertainty around tariffs after President Trump said he will announce pharma specific tariffs in two weeks, according to CNBC.

Earnings results since yesterday's close have garnered some negative responses, adding pressure on the broader market. Ford (F), Clorox (CLX), Mattel (MAT), and Palantir (PLTR) are standouts in that respect.

The 10-yr yield is down one basis point to 4.33% and the 2-yr yield is down four basis points to 3.80%. 

In corporate news:

• Ford (F 9.92, -0.25, -2.5%): beats by $0.14, misses on revs, co suspends FY25 guidance; says business is strong, adjusted EBIT tracking within prior guidance, excluding new tariff-related impacts
• Mattel (MAT 16.11, -0.09, -0.6%): beats by $0.07, beats on revs; pauses guidance
• Clorox (CLX 134.01, -4.38, -3.2%): misses by $0.10, misses on revs; reaffirms FY25 EPS guidance
• Palantir (PLTR 114.82, -8.95, -7.2%): reports EPS in-line, beats on revs; guides Q2 revs above consensus; guides FY25 revs above consensus
• Vertex Pharma (VRTX 474.00, -26.19, -5.2%): misses by $0.19, misses on revs; guides FY25 revs in-line
• DoorDash (DASH 198.20, -7.20, -3.5%): beats by $0.05, misses on revs; announces ~$1.2 billion cash acquisition of SevenRooms
• NIKE (NKE 57.20, -0.15, -0.3%): announces senior leadership changes to accelerate growth and drive win now action plan; Amy Montagne Becomes President, Nike

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a mixed showing on Tuesday while markets in Japan and South Korea remained closed for holidays. Japan's Nikkei: HOLIDAY, Hong Kong's Hang Seng: +0.7%, China's Shanghai Composite: +1.1%, India's Sensex: -0.2%, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: -0.1%.
  • In economic data:
    • China's April Caixin Services PMI 50.7 (expected 51.7; last 51.9)
    • India's April Services PMI 58.7 (expected 59.1; last 58.5)
    • Australia's March Building Approvals -8.8% m/m (expected -1.7%; last -0.2%); 9.9% yr/yr (expected 9.1%; last 10.3%). March Private House Approvals -4.5% m/m (last 1.1%)
  • In news:
    • There was some chatter about rising demand for Chinese equities, but that was tempered by indications that Chinese companies need significant support from banks to insulate against trade shocks.
    • The Taiwanese Dollar pulled back against the greenback after surging nearly 10% against the U.S. currency between Friday and Monday.
    • Japanese press reported that the U.S. rejected Japan's request for a full exemption from reciprocal tariffs, but there is potential for the rate to be lowered.
• Major European indices trade in the red. STOXX Europe 600: -0.3%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -0.1%, France's CAC 40: -0.4%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: UNCH.
  • In economic data:
    • Eurozone's April Services PMI 50.1 (expected 49.7; last 51.0). March PPI -1.6% m/m (expected -1.4%; last 0.2%); 1.9% yr/yr (expected 2.0%; last 3.0%)
    • Germany's April Services PMI 49.0 (expected 48.8; last 50.9)
    • U.K.'s April Services PMI 49.0 (expected 48.9; last 52.5)
    • France's March Industrial Production 0.2% m/m (expected 0.4%; last 1.0%). April Services PMI 47.3 (expected 46.8; last 47.9) o Swiss April Unemployment Rate 2.8%, as expected (last 2.8%)
    • Italy's April Services PMI 52.9 (expected 51.3; last 52.0)
    • Spain's April Unemployment Change -67,400 (expected 6,500; last -13,300). April Services PMI 53.4 (expected 53.9; last 54.7)
  • In news:
    • Final April Services PMI readings from the region were mostly better than expected with eurozone's Services PMI (50.1) indicating a minimal expansion in activity.
    • Positive results from companies like wind turbine maker Vestas and auto parts supplier Continental have helped offset weaker updates from firms such as Philips, which cut its profit forecast.
    • EU Trade Commissioner Sefcovic warned that ongoing U.S. investigations could lead to tariffs covering nearly all EU exports, calling the situation "not acceptable" while stressing the need for a negotiated solution.