The S&P 500 Index ($SPX) (SPY) has increased by +0.29%, while the Dow Jones Industrials Index ($DOWI) (DIA) has dipped by -0.28%. The Nasdaq 100 Index ($IUXX) (QQQ) is up +0.73%. In futures trading, June E-mini S&P futures (ESM25) are down -0.18%, and June E-mini Nasdaq futures (NQM25) are down -0.03%.

Stock indexes are generally rising today, supported by strong performances from megacap technology firms and chip makers. Better-than-expected earnings from Texas Instruments and Lam Research have positively influenced the market. Additionally, signs indicating a stable U.S. labor market bolster stocks, as weekly initial unemployment claims rose by 6,000 to 222,000, aligning with projections. Notably, weekly continuing claims fell to a 10-week low of 1.841 million. Lower treasury note yields further support stock prices, with the 10-year T-note yield declining by -5.1 basis points to 4.330%. Cleveland Fed President Hammack’s suggestion that the Fed might consider rate cuts in June, pending robust data, also contributes to market optimism.

However, potential stock gains remain muted due to worries about the U.S.-China trade conflict. Treasury Secretary Bessent indicated that President Trump has not proposed removing U.S. tariffs on China unilaterally. Moreover, China’s Commerce Ministry insists that the U.S. must retract all unilateral tariffs and demonstrate “sincerity” to facilitate a trade deal, claiming that reports about trade negotiations are unfounded.

Regarding employment data, initial weekly unemployment claims have risen, yet continuing claims have declined, indicating a healthier labor market than anticipated. In terms of manufacturing, U.S. March capital goods new orders (ex-defense and aircraft) rose by +0.1% month-over-month, meeting expectations. In contrast, the Chicago Fed national activity index for March decreased by -0.27 to -0.03, underperforming against the forecast of 0.12.

Dovish remarks from Cleveland Fed President Hammack have lent support to stocks and bonds. Although she ruled out a rate cut at the May 6-7 FOMC meeting, she indicated that “clear and convincing data” could prompt action in June. Currently, the markets estimate an 8% chance for a -25 basis point rate cut after the upcoming FOMC meeting.

This week, investors are keenly focused on Q1 corporate earnings reports and any updates on U.S. trade policies. The Fed Beige Book is set to release later today, with Thursday expected to reveal March existing home sales (anticipated to decline by -2.8% month-over-month to 4.14 million). On Friday, the revised University of Michigan April consumer sentiment index is projected to remain unchanged at 50.8.

The Q1 earnings reporting season is in full swing. Data from Bloomberg Intelligence indicates that the consensus anticipates a year-over-year earnings growth of +6.7% for S&P 500 stocks, a decrease from earlier expectations of +11.1% in November. For full-year 2025, corporate profits for the S&P 500 are forecasted to rise +9.4%, down from an earlier estimate of +12.5% released in January.

International stock markets are showing mixed results. The Euro Stoxx 50 has decreased by -0.17%. The Shanghai Composite in China has climbed to a three-week high, closing up +0.03%. Meanwhile, Japan’s Nikkei Stock 225 has also reached a three-week high, finishing up +0.49%.

Interest Rates

The June 10-year Treasury notes (ZNM25) rose by +14 ticks, with the 10-year T-note yield down by -5.1 basis points to 4.330%. Strength in European government bonds has provided moderate support for T-notes. The market grew more optimistic after President Trump stated he does not intend to fire Fed Chair Powell, alleviating foreign selling concerns of dollar assets, including Treasuries. T-notes gained further momentum following Hammack’s dovish comments about potential rate cuts in June. However, supply pressures are tempering gains ahead of a $44 billion Treasury auction of 7-year notes later today.

European government bond yields are trending downward. The 10-year German bund yield has decreased by -4.6 basis points to 2.451%. Similarly, the 10-year UK gilt yield is down -5.1 basis points to 4.501%. In the Eurozone, March new car registrations fell -0.2% year-over-year to 1.030 million units, marking the third consecutive month of decline. Conversely, Germany’s April IFO business confidence index unexpectedly increased by +0.2 to a nine-month high of 86.9, surpassing expectations of a decline to 85.2. ECB Governing Council member Rehn mentioned the possibility of further rate reductions, potentially exceeding -25 basis points.

Market swaps are currently pricing in a 98% probability of a -25 basis point rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

The “Magnificent Seven” stocks are trending upward, contributing to broader market gains. Nvidia (NVDA) has risen by more than +2%, along with other tech giants like Tesla (TSLA), Meta Platforms (META), Amazon.com (AMZN), Alphabet (GOOGL), and Microsoft (MSFT), each rising over +1%. Apple (AAPL) has seen an increase of +0.47%.

Chip stocks are also gaining ground following better-than-expected earnings. Microchip Technology (MCHP) has advanced more than +7%, leading the Nasdaq 100. Texas Instruments (TXN) is up over +5% after reporting Q1 revenue of $4.07 billion, surpassing the consensus estimate of $3.91 billion. The company forecasts Q2 revenue between $4.17 billion and $4.53 billion, outperforming expectations of $4.12 billion. Additionally, Lam Research (LRCX) has increased by more than +3% after its Q3 adjusted EPS came in at $1.04, exceeding the consensus of $1.00. Other chipmakers, including Analog Devices (ADI) and ON Semiconductor (ON), are up by more than +4%, while Marvell Technology (MRVL), GlobalFoundries (GFS), ARM Holdings Plc (ARM), and NXP Semiconductors NV (NXPI) have all gained over +2%.

ServiceNow (NOW) has surged more than +14% after reporting Q1 subscription revenue of $3.09 billion, slightly ahead of the consensus of $3.08 billion, with an optimistic forecast of Q2 subscription revenue between $3.03 billion and $3.04 billion. In addition, Hasbro (HAS) is up over +12% following its Q1 net revenue report of $887.1 million, significantly exceeding the consensus target of $769.2 million.

Allegion Plc (ALLE) has increased by more than +8% after reporting Q1 adjusted EPS of $1.86, better than the consensus of $1.68. Edwards Lifesciences (EW) is up over +5% after raising its full-year sales forecast to a range of $5.7 billion to $6.1 billion, above the consensus of $5.81 billion.

On the downside, Fiserv (FI) leads S&P 500 decliners, down over -14% after its Q1 organic revenue increase of +7.0% fell short of expectations for +8.48%. Alaska Air Group (ALK) is down more than -11% after projecting Q2 adjusted EPS between $1.15 and $1.65.