June S&P 500 E-Mini futures (ESM24)are up +0.03%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.08% this morning as investors awaited further comments from Federal Reserve officials while also bracing for Nvidia earnings due later in the week.

In yesterday’s trading session, Wall Street’s major indexes closed mixed. Norwegian Cruise Line (NCLH) climbed over +7% and was the top percentage gainer on the S&P 500 after raising its full-year adjusted EPS forecast. Also, Micron Technology (MU) advanced about +3% after Morgan Stanley upgraded the stock to Equal Weight from Underweight with a price target of $130. In addition, Nvidia (NVDA) gained over +2% after four brokerages raised their price targets on the stock. On the bearish side, JPMorgan Chase (JPM) fell more than -4% and was the top percentage loser on the Dow and S&P 500 after CEO Jamie Dimon said that the bank wouldn’t repurchase much stock at “these prices.”

Atlanta Fed President Raphael Bostic said Monday that the U.S. economy is slowing down, albeit very slowly, and this should aid in the gradual reduction of inflation. Bostic reiterated his forecast for the Fed’s interest-rate policy, expecting only one rate cut this year in the October-December quarter. Also, Fed Vice Chair for Supervision Michael Barr stated that the central bank should keep interest rates steady, emphasizing that the policy needs more time to bring inflation down to the target. In addition, Fed Vice Chair Philip Jefferson stated that the U.S. April inflation data were “encouraging,” but “it is too early to tell whether the recent slowdown in the disinflationary process will be long lasting.” Finally, Cleveland Fed President Loretta Mester remarked that while the policy remains restrictive, policymakers must await further evidence regarding the trajectory of inflation before considering adjustments to interest rates. Mester added that she doesn’t believe three rate cuts in 2024 are still appropriate. 

Meanwhile, U.S. rate futures have priced in a 3.6% probability of a 25 basis point rate cut at the June FOMC meeting and a 22.8% chance of a 25 basis point rate cut at July’s policy meeting.

On the earnings front, notable companies like Lowe’s Companies (LOW), Autozone (AZO), Toll Brothers (TOL), Macy’s (M), and Urban Outfitters (URBN) are set to report their quarterly figures today.

The U.S. economic data slate is mainly empty on Tuesday. However, investors will likely focus on a batch of speeches from Fed officials Waller, Barkin, Williams, Bostic, Barr, Collins, and Mester.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.429%, down -0.18%.

The Euro Stoxx 50 futures are down -0.47% this morning, pulling back from recent record highs as investors digested hawkish comments from Fed officials and shifted their focus to Nvidia’s earnings due later this week. Bank and utilities stocks led the declines on Tuesday. The Federal Statistical Office reported Tuesday that German annual producer prices fell more than expected in April, marking the 10th consecutive month of producer deflation. Separately, Eurostat said Tuesday that the Eurozone trade surplus rose in March compared to the previous month. Meanwhile, investors are anticipating the release of the minutes from the Fed’s latest policy meeting and chip giant Nvidia’s earnings on Wednesday, which are expected to shape market sentiment in the coming days. In corporate news, Sfs Group Ag (SFSN.Z.EB) climbed over +10% after UBS upgraded the stock to Buy from Neutral. Also, AstraZeneca Plc (AZN.LN) rose more than +1% after the pharmaceutical giant announced a target to increase its revenue by around 75% to $80 billion by 2030.

Germany’s PPI and Eurozone’s Trade Balance data were released today.

The German April PPI has been reported at +0.2% m/m and -3.3% y/y, weaker than expectations of +0.3% m/m and -3.2% y/y.

Eurozone March Trade Balance arrived at 24.1B euros, stronger than expectations of 19.9B euros.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.42% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.31%.

China’s Shanghai Composite Index closed lower today as the optimism surrounding Beijing’s property stimulus measures faded just days after their announcement. Commodity and mining stocks underperformed on Tuesday, while bank stocks gained ground. Meanwhile, China’s economic challenges continue to be in focus, with recent data indicating no significant improvement in its debt-ridden property sector. According to Bloomberg’s calculations based on data released by the Ministry of Finance on Monday, incomes from transfers of rights to use state-owned land, involving local authorities selling land to property developers, dropped by 21% in April from a year earlier to 238.9 billion yuan ($33 billion), marking the lowest revenue from land sales in eight years. In other news, economists, as reported by Bloomberg News, suggested that the recent set of measures remains insufficient to resolve the country’s property crisis. In corporate news, Li Auto Inc. tumbled over -19% after the company reported weaker-than-expected Q1 vehicle sales.

Japan’s Nikkei 225 Stock Index gave up early gains and closed moderately lower today. Real estate and machinery stocks led the declines on Tuesday. Meanwhile, the Japanese yen was little changed against the greenback on Tuesday. Japanese Finance Minister Shunichi Suzuki expressed concerns on Tuesday regarding the negative implications of the yen’s current weakness and its impact on incentives to raise wages. He reiterated that the government would closely monitor the currency market and take appropriate action as required. In corporate news, MS&AD Insurance Group surged over +13% after the insurer provided a better-than-expected full-year net profit forecast, announced plans to repurchase up to 8.2% of its shares, and stated it would sell 1.4 trillion yen ($9 billion) worth of clients’ shares over the next two years. Also, Tokio Marine Holdings gained more than +2% after the company gave an upbeat full-year net income outlook, unveiled plans to buy back 200 billion yen of its shares this fiscal year, and said it would cut cross-shareholdings to zero by the end of fiscal 2029. At the same time, Sompo Holdings slid over -6% after its annual net income guidance missed analyst estimates. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.64% to 17.11.

Pre-Market U.S. Stock Movers

Palo Alto Networks (PANW) slumped over -8% in pre-market trading after the cybersecurity company issued fourth-quarter sales and billings guidance that disappointed investors.

Zoom Video (ZM) slid more than -2% in pre-market trading after the communications software company provided a soft Q2 outlook.

Sunnova Energy (NOVA) fell over -1% in pre-market trading after Piper Sandler downgraded the stock to Neutral from Overweight.

Larimar Therapeutics (LRMR) surged more than +21% in pre-market trading following the announcement that the FDA lifted a partial clinical hold on the company’s nomlabofusp clinical program after reviewing Phase 2 data for the drug.

HP Inc. (HPQ) gained about +0.8% in pre-market trading after Barclays upgraded the stock to Equal Weight from Underweight.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - May 21st

Lowe’s (LOW), Autozone (AZO), Toll Brothers (TOL), Eagle Materials (EXP), Amer Sports (AS), Xpeng (XPEV), Modine Manufacturing (MOD), Macy’s Inc (M), Skyline (SKY), Urban Outfitters (URBN), Alvotech (ALVO), ViaSat (VSAT), ZIM Integrated Shipping Services (ZIM), Eagle Point Cred (ECC), Waldencast Acquisition (WALD), American Resources (AREC).

More Stock Market News from Barchart

• 3 Near-oversold Dividend Aristocrats To Buy Before They Pop
• Up 33% YTD, This Energy Dividend Stock Is Still a Top Offshore Pick
• Stocks Settle Mixed on Hawkish Fed Comments
• 3 Solar Stocks That Wall Street Likes Better Than SunPower