Stock Market Update

The S&P 500 futures are down nine points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 30 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 82 points and are trading 0.2% below fair value.

The weakness comes in the wake of Commerce Secretary announcing that the U.S. and China have reached a framework agreement to implement the Geneva consensus. What wasn't announced were any specific details of this framework agreement. That will have to wait until President Trump and President Xi review the agreement and sign off on it.

It is unclear if the weakness in the equity futures market is a case of a sell-the-news reaction or an expression of disappointment that the news itself is still lacking key details. It's probably a little of both, as there is apt to be hope still that the presidents will agree to a framework that relaxes export restrictions on rare earths and advanced technology products. To be sure, the downside would be more pronounced than it is if there was a sense that those restrictions aren't going to be relaxed after all.

Separately, market participants are also treading cautiously in front of the release of the May Consumer Price Index (Briefing.com consensus 0.2%; prior 0.2%) and Core Consumer Price Index (Briefing.com consensus 0.3%; prior 0.2%) at 8:30 a.m. ET, which will trigger lots of chatter about the inflation trend and its implications for monetary policy and the economy.

The 2-yr note yield is up two basis points to 4.03%, and the 10-yr note yield is up two basis points to 4.49%. The Treasury market will also be contending with a $39 billion 10-yr note reopening today, with results at 1:00 p.m. ET.

In corporate news:

• Chewy (CHWY 42.05, -3.79, -8.3%) beats by $0.18, reports revs in-line
• Dave & Busters's (PLAY 27.35, +1.48, +5.7%): misses by $0.25, reports revs in-line; Reiterates FY25 outlook for capex and pre-opening expense; says results in May were very encouraging with a particularly robust Memorial Day weekend of solidly positive sales
• General Motors (GM 49.22, +0.29, +0.6%) announces plans to invest about $4 bln over the next two years in its domestic manufacturing plants
• Gitlab (GTLB 42.62, -5.89, -12.1%): beats by $0.02, reports revs in-line; guides Q2 EPS in-line, revs in-line; guides FY26 EPS above consensus, reaffirms FY26 revs guidance
• NVIDIA (NVDA 144.25, +0.30, +0.2%)/Quantum stocks: CEO Jensen Huang says "quantum computing is reaching an inflection point."
• Super Micro Computer (SMCI 43.28, +0.37, +0.9%) is announcing an expansion of the industry's broadest portfolio of solutions designed for NVIDIA (NVDA) Blackwell Architecture to the European market
• Tesla (TSLA 332.94, +6.85, +2.1%) CEO Elon Musk says "I regret some of my posts about President Trump last week. They went too far."
• UnitedHealth (UNH 302.22, -1.46, -0.5%) downgraded to Neutral from Outperform at Robert W. Baird, tgt $312
• Victoria's Secret (VSCO 22.29, +0.09, +0.4%) misses by $0.21, misses on revs; guides Q2 EPS below consensus, revs below consensus; reaffirms FY26 revs guidance

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region traded higher. Japan's Nikkei +0.5%; Hong Kong's Hang Seng +0.8%; China's Shanghai Composite +0.5%; India's Sensex +0.2%; South Korea's Kospi +1.2%; and Australia's All Ordinaries +0.1%
  • In economic data:
    • Japan's May PPI -0.2% m/m (last 0.3%) and 3.2% yr/yr (expected 3.5%; last 4.1%)
    • South Korea's May Unemployment Rate 2.7% (last 2.7%)
  • In news:
    • Markets were lifted in part by the news that the U.S. and China reached a framework agreement to implement the Geneva consensus, which is expected to pave the way for a relaxation of rare earth minerals export restrictions to the U.S. and a rollback of export restrictions on advanced technology products to China. This new framework, though, is awaiting approval from President Trump and President Xi, suggesting it isn't exactly a firm commitment just yet.
    • South Korea's Kospi logged its sixth consecutive gain and closed above 2,900 for the first time since January 2022 (it is up 27% from its April low).
    • Reuters reports that the U.S. and India might be on track to announce an interim trade deal by the end of the month.
    • Japan reported a month-over-month decline in wholesale inflation that could temper the prospects of another BOJ rate hike.
• Major European indices are little changed, with the exception of Spain's IBEX 35 (-0.9%), which is facing added pressure following an earnings disappointment from retailer Inditex. STOXX Europe 600 -0.1%; Germany's DAX -0.2%; U.K.'s FTSE 100 flat; France's CAC 40 -0.2%; Italy's FTSE MIB -0.1%; Spain's IBEX 35 -0.9%.
  • In economic data:
    • There was no economic data of note
  • In news:
    • Bloomberg reporting that an EU-U.S. trade deal might be delayed until after the July 9 deadline.
    • Chancellor Reeves is unveiling a three-year spending plan today for the U.K.
    • ECB member Kazaks suggested more cuts may be needed, according to Bloomberg.