The S&P 500 Index ($SPX) (SPY) today is up +0.27%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.12%.  June E-mini S&P futures (ESM25) are up +0.31%, and June E-mini Nasdaq futures (NQM25) are up +0.18%. 

Stock indexes today are trading higher on an easing of US-China trade tensions as representatives from both countries will meet for their first trade talks since President Trump imposed tariffs on US trading partners.  US Treasury Secretary Bessent and US Trade Representative Greer will travel to Switzerland for trade talks on Saturday and Sunday with Chinese Vice Premier He Lifeng.  Bessent said the talks focus on de-escalating the tariff standoff between the two countries.  He said the current tariff rates aren’t sustainable and are equivalent to a trade embargo.

Some negative corporate earnings results are limiting the upside in stocks.  Sarepta Therapeutics is down more than -16% after cutting its full-year total net product revenue forecast.  Also, Marvell Technology is down more than -10% after narrowing its first quarter 2026 guidance range.  In addition, Super Micro Computer is down more than -4% after reporting Q3 net sales below consensus and cutting its full-year net sales forecast.

US MBA mortgage applications rose +11.0% in the week ended May 2, with the purchase mortgage sub-index up +11.1% and the refinancing mortgage sub-index up +11.1%.  The average 30-year fixed rate mortgage fell -5 bp to 6.84% from 6.89% in the prior week.

The People’s Bank of China (PBOC) today enacted several easing measures in an attempt to boost liquidity in financial markets and bolster economic growth.  The PBOC cut the seven-day reverse repurchase rate by -10 bp to 1.4% from 1.5% and cut the reserve requirement ratio for major banks by -50 bp to 9.0% from 9.5%.

The FOMC will conclude its 2-day policy meeting today and is expected to keep its federal funds target range unchanged at 4.25%-4.50%.  Recent economic news has been better than expected, and tariff-linked inflation risks have increased, reducing expectations for a rate cut this week.  Swap markets are now pricing in three 25 bp Fed rate cuts by year-end, down from the four they had priced in a week ago. 

This week, the market will focus on tariffs and any changes to US trade policy.  Later today, the FOMC is expected to keep its federal funds target range unchanged at 4.25%-4.50%.  Post-FOMC comments today from Fed Chair Powell will also be studied for any clues as to the future of Fed policy.  Thursday brings weekly initial unemployment claims, Q1 nonfarm productivity (expected 0.7%), and Q1 unit labor costs (expected +5.2%).

The markets are discounting the chances at 2% for a -25 bp rate cut after the 2-day FOMC meeting that ends today.

Q1 earnings reporting season remains in progress.  According to data compiled by Bloomberg Intelligence, the market consensus is for Q1 year-over-year earnings growth of +6.7% for the S&P 500 stocks, down from expectations of +11.1% in early November.  So far, of the 365 companies in the S&P 500 companies that have reported quarterly results, 78% have beaten estimates.  Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.  

Overseas stock markets today are mixed.  The Euro Stoxx 50 is down -0.57%.  China’s Shanghai Composite rallied to a 1-month high and closed up +0.80%.  Japan’s Nikkei Stock 225 closed down -0.14%.

Interest Rates

June 10-year T-notes (ZNM25) are down -3 ticks.  The 10-year T-note yield is up +2.1 bp to 4.316%.  June T-notes are under pressure today due to reduced safe-haven demand as the US and China are set to meet for trade talks this weekend.  There is also some caution ahead of the results of the 2-day FOMC meeting later today.  T-note prices are seeing some underlying support from strength in European government bond prices. 

European government bond yields today are moving lower.  The 10-year German bund yield is down -3.7 bp to 2.503%. The 10-year UK gilt yield is down -4.1 bp to 4.473%.

Eurozone Mar retail sales fell -0.1% m/m, right on expectations and the first decline in 5 months.

German Mar factory orders rose +3.6% m/m, stronger than expectations of +1.3% m/m.

Swaps are discounting the chances at 96% for a -25 bp rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

Charles River Laboratories (CRL) is up more than +17% to lead gainers in the S&P 500 after announcing a strategic review to enhance long-term stockholder value and that it is entering into a cooperation agreement with Elliot Investment Management.   

Oscar Health (OSCR) is up more than +27% after reporting Q1 total revenue of $3.05 billion, well above the consensus of $2.86 billion.

Rockwell Automation (ROK) is up more than +12% after reporting Q2 adjusted EPS of $2.45, stronger than the consensus of $2.08, and boosted its full-year adjusted EPS forecast to $9.20-$10.20 from a previous forecast of $8.60-$9.80, above the consensus of $9.18. 

Walt Disney (DIS) is up more than +10% to lead gainers in the Dow Jones industrials after reporting Q2 adjusted EPS of $1.45, better than the consensus of $1.20, and forecast 2025 adjusted EPS of $5.75, above the consensus of $5.44.

Verisk Analytics (VRSK) is up more than +3% to lead gainers in the Nasdaq 100 after reporting Q1 adjusted EPS continuing operations of $1.73, better than the consensus of $1.68.

Advanced Micro Devices (AMD) is up more than +2% after reporting Q1 revenue of $7.44 billion, above the consensus of $7.12 billion, and forecast Q2 revenue of $7.1 billion-$7.7 billion, the midpoint above the consensus of $7.23 billion.

Electronic Arts (EA) is up more than +2% after forecasting 2026 net bookings of $7.6 billion to $8.0 billion, stronger than the consensus of $7.56 billion. 

Marvell Technology (MRVL) is down more than -10% to lead losers in the Nasdaq 100 after narrowing its first quarter 2026 guidance range to be about $1.875 billion within a range of plus or minus 2%, versus the prior range of plus or minus 5%.

Sarepta Therapeutics (SRPT) is down more than -15% after cutting its full-year total net product revenue forecast to $2.3 billion to $2.6 billion from a previous estimate of $2.9 billion to $3.1 billion. 

Entegris Inc (ENTG) is down more than -12% after forecasting Q2 sales of $735 million-$775 million, well below the consensus of $827.1 million.

Arista Networks (ANET) is down more than -7% after reporting Q1 adjusted gross margin of 64.1% versus 64.2% y/y. 

Super Micro Computer (SMCI) is down more than -4% after reporting Q3 net sales of $4.60 billion, below the consensus of $4.76 billion, and cutting its full-year net sales forecast to $21.8 billion to $22.6 billion from a previous forecast of $23.5 billion to $25.0 billion, weaker than the consensus of $23.11 billion. 

Uber Technologies (UBER) is down more than -4% after reporting Q1 gross bookings of $42.82 billion, weaker than the consensus of $43.14 billion.

Crowdstrike Holdings (CRWD) is down more than -4% after announcing plans to cut 5% of its workforce and expects about $36 million to $53 million in charges from the plan.

Earnings Reports (5/7/2025)

APA Corp (APA), Atmos Energy Corp (ATO), Axon Enterprise Inc (AXON), Bio-Techne Corp (TECH), Bunge Global SA (BG), CDW Corp/DE (CDW), Cencora Inc (COR), CF Industries Holdings Inc (CF), Charles River Laboratories International (CRL), Corteva Inc (CTVA), Dayforce Inc (DAY), Emerson Electric Co (EMR), Fortinet Inc (FTNT), Johnson Controls International (JCI), MarketAxess Holdings Inc (MKTX), NiSource Inc (NI), Occidental Petroleum Corp (OXY), Paycom Software Inc (PAYC), Rockwell Automation Inc (ROK), Skyworks Solutions Inc (SWKS), Texas Pacific Land Corp (TPL), Trimble Inc (TRMB), Uber Technologies Inc (UBER), Verisk Analytics Inc (VRSK), Vistra Corp (VST), Walt Disney Co/The (DIS).