Stock Market Update

Equity futures point to a higher opening as oil prices and Treasury yields move modestly lower this morning.

Stocks are coming off a weak session, which was the third consecutive lower finish for the S&P 500. Mega-cap and other growth stocks lagged, though an intraday rebound across semiconductor names helped the major averages improve considerably from session lows.

The semiconductor cohort will garner additional attention today as investors anticipate NVIDIA's (NVDA 223.60, 2.99, +1.4%) earnings release after the close.

President Trump said yesterday that he hopes the Iran war ends "very quickly", according to The Hill, though reports suggest the U.S. and Iran remain far apart on negotiations. Still, crude oil is currently down $1.85 (-1.8%) to $102.30 per barrel.

Today will once again be light on the data front, though the market will receive the April FOMC meeting minutes this afternoon.

The MBA Mortgage Applications Index for the week ended May 16 decreased 2.3%, from a prior increase of 1.7%.

In corporate news:

• CAVA Group (CAVA 84.10, +5.98, +7.7%) beat EPS expectations by $0.03, beat revenue expectations, saw same restaurant sales increase 9.7%, and raised its FY26 same restaurant sales growth.
• Lowe's (LOW 213.79, -4.58, -2.1%) beat EPS expectations by $0.06, reported revenues in-line, and reaffirmed its FY27 guidance.
• Target (TGT 128.73, +1.49, +1.2%) beat EPS expectations by $0.24, beat revenue expectations, and raised its FY27 guidance.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly lower finish to the midweek session with South Korea's Kospi (-0.9%) deepening its reversal from a record high. Japan's Nikkei: -1.2%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: -0.2%, India's Sensex: +0.2%, South Korea's Kospi: -0.9%, Australia's ASX All Ordinaries: -1.3%.

In news:

• Samsung's union will launch a strike on Thursday, though management is reportedly still looking to avoid that outcome.
• The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.00% and 3.50%.
• Japan sold 20-yr JGBs to solid demand and there was a report that a new JGB aimed at retail investors could be launched.
• The Reserve Bank of New Zealand's mean household inflation expectations for two years out increased to 4.9% from 3.4%.

In economic data:

• Japan's May Reuters Tankan Index 8 (prior 7)

Major European indices trade in the green, encouraged by news that EU trade negotiator Zovko said that a trade deal has been made with the U.S. STOXX Europe 600: +0.4%, Germany's DAX: +0.4%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.6%.

In news:

• European Central Bank policymaker Kocher said that a June rate hike is expected if there is no quick end to the Iran conflict.
• The U.K. is reportedly lobbying supermarkets to introduce price caps on essential times like eggs, bread, and milk.

In economic data:

• Eurozone's April CPI 1.0% m/m (expected 1.0%; last 1.3%); 3.0% yr/yr (expected 3.0%; last 2.6%). April Core CPI 0.9% m/m (expected 0.9%; last 0.8%); 2.2% yr/yr (expected 2.2%; last 2.3%)
• Germany's April PPI 1.2% m/m (expected 2.0%; last 2.5%); 1.7% yr/yr (expected 1.5%; last -0.2%)
• U.K.'s April CPI 0.7% m/m (expected 0.9%; prior 0.7%); 2.8% yr/yr (expected 3.0%; last 3.3%). April Input PPI 2.4% m/m (expected 1.2%; last 4.3%); 7.7% yr/yr (expected 5.9%; prior 5.3%). April Output PPI 1.4% m/m (expected 1.0%; prior 1.4%); 4.0% yr/yr (expected 2.8%; prior 3.0%)