Market Updates: Slight Gains Amid Economic Concerns

The S&P 500 Index ($SPX) is up +0.03%, the Dow Jones Industrials Index ($DOWI) is up +0.06%, and the Nasdaq 100 Index ($IUXX) is up +0.10%. June E-mini S&P futures (ESM25) have increased by +0.07%, while June E-mini Nasdaq futures (NQM25) are up by +0.14%.

Stock indexes are slightly higher, driven by lower bond yields; the 10-year T-note yield declined by -2 basis points (bp) to 4.42%. The gains in equities are tempered after the OECD lowered its 2025 global GDP forecast for the second time this year, citing trade barriers and economic uncertainty. Additionally, rising trade tensions between the US and China continue to affect stock prices following accusations from China’s Ministry of Commerce regarding new US restrictions.

OECD Lowers GDP Forecast

The OECD has revised its global 2025 GDP forecast down to +2.9% from +3.1% in March, attributing it to the detrimental impacts of tariffs and investor confidence.

China’s Manufacturing Slump

Chinese manufacturing shows weakness, with the Caixin manufacturing PMI for May falling unexpectedly from 50.7 to 48.3, marking the lowest level in over 2.5 years.

Market Sentiment Ahead of Economic Reports

Markets currently assign a 1% probability of a -25 bp rate cut at the next FOMC meeting on June 17-18. This week’s market focus will center on trade developments. Later today, April factory orders are expected to drop -3.2% month-over-month, with JOLTS job openings anticipated to decline by -92,000 to 7.100 million. On Wednesday, the May ADP employment change is predicted to rise by +110,000, while the May ISM services index is projected to increase by +0.5 to 52.1. Thursday’s weekly initial unemployment claims are expected to decrease by -5,000 to 235,000, and on Friday, May nonfarm payrolls are anticipated to climb by +125,000 with the unemployment rate staying at 4.2%. May average hourly earnings are expected to increase by +0.3% month-over-month and +3.7% year-over-year.

Global Market Overview

Overseas stock markets show mixed results today. The Euro Stoxx 50 is down -0.13%, while China’s Shanghai Composite gained +0.43%. Japan’s Nikkei Stock 225 is down -0.06%.

Interest Rates and Bond Markets

September 10-year T-notes (ZNU25) are up +8 ticks today, with the yield decreasing by -1.4 bp to 4.426%. The rise in T-notes follows a rally in European government bonds after a favorable ECB-friendly Eurozone May CPI report. The OECD’s downward revision of its GDP forecast also supported T-notes.

European government bond yields have also decreased. The 10-year German bund yield fell to a 3.5-week low of 2.485%, down -2.2 bp to 2.503%. The UK gilt yield dropped to a 3-week low of 4.601%, down -5.4 bp to 4.613%.

The Eurozone’s May CPI eased to +1.9% year-over-year from +2.2% in April, outperforming expectations of +2.0%. The core CPI also eased to +2.3% from +2.7%, better than the forecast of +2.4%.

The Eurozone’s April unemployment rate fell by -0.1, hitting a record low of 6.2%, as projected.

Swaps indicate a 97% likelihood of a -25 bp rate cut by the ECB during Thursday’s policy meeting.

US Stock Movers

Mining stocks are facing pressure due to concerns over industrial metals demand; Freeport McMoRan (FCX), Newmont (NEM), and Southern Copper (SCCO) are down more than -1%. Real Estate Investment Trusts (REITs) like Mid-America Apartment Communities (MAA) and Equity Residential (EQR) are also down more than -2%.

EchoStar (SATS) decreased by more than -4% after deciding against a $183 million cash interest payment amid FCC review uncertainty. Cooper Cos (COO) dropped by over -2% following analysts lowering price targets by an average of 15% since its recent earnings report.

ASML Holding NV (ASML) is down more than -1% after Barclays changed its rating from overweight to equal weight. Dollar General (DG) has gained over +11% after reporting Q1 net sales of $10.44 billion, exceeding expectations, and raising its 2026 sales forecast. Signet Jewelers (SIG) is up +9% following better-than-expected Q1 sales and a revised EPS forecast.

MoonLake Immunotherapeutics (MLTX) surged +16% after news of acquisition talks with Merck. Ferguson Enterprises (FERG) rose +12% following a better-than-expected quarterly revenue report.

Pinterest (PINS) is up more than +1% after JPMorgan Chase upgraded the stock to overweight with a price target of $40. Lululemon Athletica (LULU) increased by +2% after Evercore ISI raised its price target to $400.

Upcoming Earnings Reports

Crowdstrike Holdings Inc (CRWD), Dollar General Corp (DG), Donaldson Co Inc (DCI), Ferguson Enterprises Inc (FERG), Guidewire Software Inc (GWRE), Hewlett Packard Enterprise Co (HPE), and Ollie’s Bargain Outlet Holding (OLLI) are scheduled for earnings reports on June 3, 2025.

On the date of publication, Rich Asplund did not have any positions in the mentioned securities. All information is for informational purposes. For further details, please view the Barchart Disclosure Policy here.

The views expressed herein are solely those of the author and may not reflect those of Nasdaq, Inc.