US Stock Markets Rise Following Tariff Extension

The S&P 500 Index ($SPX) is up +1.12%, while the Dow Jones Industrials Index ($DOWI) has risen +0.94%. The Nasdaq 100 Index ($IUXX) saw a +1.24% increase. June E-mini S&P futures (ESM25) are up +1.17%, and June E-mini Nasdaq futures (NQM25) have gained +1.40%.

U.S. stock indexes are trading higher after President Trump extended the EU’s deadline for potential 50% tariffs until July 9. This comes after his threat to impose tariffs starting June 1. National Economic Council Director Hasset remarked that additional trade deals, especially with India, are likely this week.

The rise in stocks is also supported by a decline in bond yields, driven by speculation that Japan might alter its debt sales, potentially increasing demand for U.S. securities. The 10-year T-note yield decreased by -4.6 basis points.

In economic news, U.S. April capital goods new orders, excluding defense and aircraft, fell -1.3% month-over-month, missing expectations of -0.2%. Additionally, the March S&P CoreLogic composite-20 home price index rose +4.07% year-over-year, below the forecast of +4.50% and marking the slowest growth in 18 months.

Minneapolis Fed President Kashkari supports keeping the fed funds rate steady until there is more clarity on tariffs and price impacts.

Market assessments show a 6% chance of a -25 basis point rate cut at the upcoming FOMC meeting on June 17-18. This week’s focus is on tariff developments and potential trade deals. The Conference Board’s May consumer confidence index is anticipated to rise by +1.1 to 87.1, while the May FOMC meeting minutes will be released on Wednesday.

Nvidia will report quarterly earnings after Wednesday’s close. Also on the agenda, Thursday’s initial unemployment claims are expected to increase by +3,000 to 230,000, with the Q1 GDP projected to remain unchanged at -0.3%. April pending home sales are expected to drop by -1.0%. On Friday, April personal spending and income are predicted to rise by +0.2% and +0.3% respectively. The Fed’s preferred inflation measure, the April core PCE price index, is anticipated to increase +0.1% month-over-month and +2.5% year-over-year. Finally, the University of Michigan’s May consumer sentiment index may be revised up to 51.0 from 50.8.

Over 90% of S&P 500 companies have reported Q1 earnings, with 77% surpassing estimates, the highest rate since Q2 2024. Q1 earnings growth stands at +13.1%, exceeding initial expectations of +6.6%. Forecasts for full-year 2025 corporate profits have been adjusted downward to +9.4% from +12.5% observed in January.

International markets showed mixed results today. The Euro Stoxx 50 has risen +0.38%, while China’s Shanghai Composite fell -0.18%. Japan’s Nikkei 225 closed up +0.51%.

Interest Rates

June 10-year T-notes (ZNM25) increased by +7 ticks today. The 10-year T-note yield decreased to 4.465%. T-notes gained traction from positive movement in European bonds. Reports indicate Japan’s finance ministry may reduce bond issuance, boosting demand for U.S. securities. Weak U.S. economic data also contributed to T-note growth.

Despite soaring stock prices, the demand for government debt remains weak, capping gains in T-notes. A Treasury auction of $69 billion in 2-year T-notes is scheduled today as part of a broader $211 billion auction this week.

European government bond yields also declined. The 10-year German bund yield fell to a 2.5-week low of 2.540%, while the 10-year UK gilt yield slipped to 4.677%.

The Eurozone May economic confidence indicator rose to 94.8, surpassing expectations of 94.1. New car registrations in April increased by +1.3% year-over-year, ending a four-month decline.

Swaps indicate a 98% chance for a -25 basis point rate cut by the ECB at its June 5 meeting.

US Stock Movers

The Magnificent Seven stocks are driving market gains. Tesla (TSLA) rose over +4%, with Nvidia (NVDA) and Alphabet (GOOGL) increasing by over +2%. Other major players, including Meta Platforms (META), Amazon (AMZN), Apple (AAPL), and Microsoft (MSFT), have each risen more than +1%.

Chip stocks are performing well, with Marvel Technology (MRVL) rising more than +3%, while Advanced Micro Devices (AMD) and ASML Holding NV (ASML) have also increased by more than +2%. KLA Corp, Lam Research, and other chip companies are up over +1%.

Travel and cruise line stocks are advancing as well, with United Airlines (UAL), Southwest Airlines (LUV), and Royal Caribbean (RCL) up more than +3%. Other companies, such as Delta Air Lines (DAL) and Hilton (HLT), have also seen gains above +1%.

Informatica (INFA) surged over +5% following Salesforce’s $8 billion acquisition announcement.

Block Inc. (XYZ) gained over +5% after BNP Paribas Exane upgraded its stock rating. Vertiv Holdings (VRT) is up more than +3% following a price target increase from Evercore ISI.

Conversely, gold mining stocks are declining due to a drop in gold prices, with Gold Fields Ltd (GFI) down over -8% and Newmont (NEM) down more than -2%.

PDD Holdings (PDD) saw a significant drop of over -17%, leading Nasdaq 100 losers after reporting a Q1 operating margin decline. AutoZone (AZO) fell more than -1% following a disappointing gross margin report.

Leidos Holdings (LDOS) is down over -1% after a downgrade, and National Storage Affiliates Trust (NSA) fell -0.26% after a downgrade from Morgan Stanley.

Earnings Reports (5/27/2025)

Notable earnings reports include American Vanguard Corp (AVD), AutoZone Inc (AZO), and Okta Inc (OKTA).

On the date of publication, Rich Asplund did not hold positions in any of the mentioned securities. All data is for informational purposes only.