In the morning trading session, June S&P 500 E-Mini futures (ESM24) and June Nasdaq 100 E-Mini futures (NQM24) saw declines of -0.55% and -0.53%, respectively. This follows a volatile session on Monday, where investors were preparing for the latest reading on U.S. job openings.
Monday’s trading session ended with a mixed performance on Wall Street. Paramount Global (PARA) experienced a significant surge of over +7%, claiming the top percentage gainer spot on the S&P 500. This surge came after a report from Bloomberg suggested that Skydance Media’s latest offer for the company includes an option for nonvoting shareholders to cash out a portion of their stock for about $15 a share. Nvidia (NVDA) also made notable gains, advancing more than +4% and securing the top percentage gainer spot on the Nasdaq 100. The surge followed CEO Jensen Huang’s announcement at a Computex conference in Taiwan regarding the rollout of the Blackwell Ultra chip next year and a next-generation AI chip platform called Rubin in 2026. Boeing (BA) saw a rise of nearly +4%, emerging as the top percentage gainer on the Dow, after a report from Shenzhen TV indicated the company’s resumption of deliveries of new aircraft to China. Conversely, Science Applications International (SAIC) plunged more than -11% after reporting in-line Q1 adjusted EPS and offering a soft FY25 revenue outlook. Energy stocks also experienced a downturn as the price of WTI crude dropped more than -3% to a 3-month low, with Diamondback Energy (FANG) and Devon Energy (DVN) sliding over -4%.
Economic data released on Monday painted a mixed picture. The U.S. ISM manufacturing index unexpectedly fell to 48.7 in May, below expectations of 49.8. Additionally, the U.S. May ISM prices paid sub-index slipped to 57.0, weaker than expectations of 60.0. U.S. construction spending also unexpectedly fell -0.1% m/m in April, below expectations of +0.2% m/m. However, the U.S. May S&P Global manufacturing PMI came in at 51.3, surpassing the estimated 50.9 and the previous 50.0 levels.
Jose Torres at Interactive Brokers noted, “Bad news may no longer be good news. In recent months, investors have cheered weaker-than-estimated data based on expectations that it could accelerate the start of the Fed’s policy loosening. Investors are now reacting to soft data with fear.”
Looking ahead, U.S. rate futures have priced in a 0% chance of a 25 basis point rate cut at June’s monetary policy meeting and a 16.5% chance of a 25 basis point rate cut at the July FOMC meeting.
Notable companies like Crowdstrike Holdings (CRWD), Ferguson (FERG), PVH (PVH), Hewlett Packard Enterprise (HPE), and Bath & Body Works (BBWI) are set to release their quarterly results today.
All eyes are focused on the U.S. JOLTs Job Openings data, with economists expecting the April JOLTs Job Openings to come in at 8.370M, compared to the previous figure of 8.488M. U.S. Factory Orders data will also be reported today, with economists forecasting this figure to stand at +0.7% m/m in April, compared to the previous number of +1.6% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.385%, down -0.32%.
Meanwhile, Euro Stoxx 50 futures are down -0.94% this morning as investors exercise caution ahead of the European Central Bank’s interest rate decision later this week. Energy stocks have underperformed, with crude oil prices continuing to fall amid oversupply concerns. BP Plc (BP-.LN) slid more than -3% after S&P Global downgraded the oil giant’s credit outlook to stable from positive on Monday.
In corporate news, Allianz Se (ALV.D.DX) fell over -2% after Citigroup downgraded the stock to Neutral from Buy.
In Germany, unemployment rate held steady at 5.9% for the sixth consecutive month in May, while the number of unemployed individuals increased by 25,000 in May, marking the 17th consecutive month of rising unemployment. Market participants are anticipating the ECB’s interest rate decision on Thursday, with a quarter-point reduction all but certain. Investors will focus on ECB President Christine Lagarde’s remarks concerning the next steps.
Additionally, today saw the release of Germany’s Unemployment Rate and Germany’s Unemployment Change data. The German May Unemployment Rate stood at 5.9%, in line with expectations, while the German May Unemployment Change came in at 25K, weaker than expectations of 7K.
In Asian markets, China’s Shanghai Composite Index (SHCOMP) closed up +0.41%, buoyed by signs of stability in the nation’s crisis-hit property sector. Real estate and pharmaceutical stocks outperformed, with analysts suggesting that recent top-level policy turnaround and support for individual firms are stabilizing the property sector. Japan’s Nikkei 225 Stock Index (NIK) closed down -0.22%, with financial and energy stocks leading the declines. Shares of several top automakers retreated after Japan’s transport ministry discovered irregularities in certification applications for certain models. The 10-year Japanese government bond yield dropped to a one-week low, while the yen strengthened against the dollar.
In pre-market trading, Annexon (ANNX) soared about +34% after announcing it would host a conference call and webcast to discuss GBS phase 3 data. FibroGen (FGEN) surged more than +15% following the company’s announcement of clinical updates on its drug candidates FG-3175 and FG-3165. Healthequity (HQY) climbed over +4% after reporting upbeat Q1 results and raising its full-year guidance. Maxeon Solar (MAXN) plunged more than -5% after Goldman Sachs double-downgraded the stock to Sell from Buy with a price target of $1.