Market Indices Decline Amid Trade Policy Concerns

The S&P 500 Index ($SPX) is down 0.25%, with the Dow Jones Industrials Index ($DOWI) down 0.11%, and the Nasdaq 100 Index ($IUXX) down 0.25%. June E-mini S&P futures (ESM25) declined 0.24%, while June E-mini Nasdaq futures (NQM25) fell 0.25%.

Market Sentiment Affected by Trade Policy Updates

Stock indexes are experiencing downward pressure due to concerns regarding U.S. trade policy. U.S. Treasury Secretary Bessent mentioned that trade talks with China are “a bit stalled.” President Trump has accused China of breaching an agreement to ease tariffs, which contributed to additional market losses.

Supporting Economic News

Despite negative sentiment in the markets, U.S. economic data was generally favorable. April personal spending increased by 0.2%, in line with expectations, while personal income rose by 0.8%, exceeding the anticipated 0.3%. This marks the largest income growth in 15 months.

The April core PCE price index, closely watched by the Fed, rose by 0.1% month-over-month and 2.5% year-over-year, matching expectations and representing the smallest year-on-year increase in over four years.

Consumer Sentiment and Inflation Expectations Improve

Stocks bounced back from their lowest levels after the University of Michigan’s consumer sentiment index for May was revised upward by 1.4 points to 52.2, better than the anticipated 51.5. Meanwhile, the 1-year inflation expectations indicator fell from 7.3% to 6.6%, while the 5-10 year expectations were revised down to 4.2% from 4.6%.

Comments from Dallas Fed President Logan suggested that the Fed may maintain rates for the medium term as economic adjustments unfold due to tariffs.

Earnings Season Update

More than 90% of S&P 500 companies have reported Q1 earnings, with 77% beating estimates. Earnings growth for Q1 is at 13.1%, surpassing initial expectations of 6.6%. However, projections for full-year 2025 corporate profits have been lowered to 9.4%, down from an earlier forecast of 12.5%.

International Market Performance

Overseas stock markets displayed mixed results. The Euro Stoxx 50 gained 0.22%, while China’s Shanghai Composite declined by 0.47%. Japan’s Nikkei 225 also fell by 1.22%.

Interest Rates Update

June 10-year T-notes (ZNM25) increased by 3 ticks, pulling yields down slightly to 4.416%. T-notes reached a 3-week high amid increased demand for safe-haven assets following stock market declines.

Concerns regarding rising wage pressures and hawkish comments from Dallas Fed President Logan impacted T-note prices. Meanwhile, yields on European government bonds increased today, with the 10-year German bund rising to 2.523%.

Key Economic Indicators from Europe

The Eurozone’s April M3 money supply rose by 3.9% year-over-year, exceeding expectations. However, German retail sales unexpectedly declined by 1.1% month-over-month, the largest drop in over 18 months.

German May CPI, however, increased by 0.2% month-over-month and 2.1% year-over-year, impacting expectations regarding European Central Bank (ECB) rate cuts.

U.S. Stock Movers

Marvell Technology (MRVL) saw a decline of over 5% after predicting Q2 gross margins lower than estimates. Micron Technology (MU) and Intel (INTC) also fell more than 2%.

Regeneron Pharmaceuticals (REGN) led S&P 500 losings with a significant drop of over 17% following disappointing trial results for its drug itepekimab. Cooper Cos (COO) and The Gap (GAP) fell 14% and 20%, respectively, due to reduced growth forecasts and potential tariff impacts.

Conversely, Ulta Beauty (ULTA) rose over 12% after reporting Q1 EPS above consensus. Zscaler (ZS), Palantir Technologies (PLTR), and Unity Software (U) also marked gains, each driven by positive financial updates.

Costco Wholesale (COST) increased over 2% following favorable Q3 EPS results.

Earnings Reports Scheduled

Coming earnings reports include B Riley Financial Inc (RILY), Compass Diversified Holdings (CODI), Roadzen Inc (RDZN), Shoe Carnival Inc (SCVL), and Sunnova Energy International Inc (NOVA).

On the date of publication, Rich Asplund had no positions in any of the mentioned securities. All information herein is for informational purposes. For further details, view the Barchart Disclosure Policy here.

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The views expressed are those of the author and do not reflect those of Nasdaq, Inc.