June S&P 500 E-Mini futures (ESM25) are down -0.33%, and June Nasdaq 100 E-Mini futures (NQM25) are down -0.49% this morning, pointing to a pause in the recent rally on Wall Street, while investors await further comments from Federal Reserve officials and an earnings report from home improvement chain Home Depot.

In yesterday’s trading session, Wall Street’s main stock indexes ended slightly higher. UnitedHealth Group (UNH) surged over +8% and was the top percentage gainer on the S&P 500 and Dow on signs of insider buying after an SEC filing revealed that CEO Stephen Hemsley and CFO John Rex purchased about $30 million worth of shares last Friday. Also, recently beaten-down pharmaceutical stocks advanced, with Moderna (MRNA) climbing more than +6% and Gilead Sciences (GILD) rising over +3% to lead gainers in the Nasdaq 100. In addition, Take-Two Interactive Software (TTWO) gained more than +3% after Morgan Stanley raised its price target on the stock to $265 from $210. On the bearish side, chip stocks lost ground, with Arm Holdings (ARM) sliding over -2% to lead losers in the Nasdaq 100 and Advanced Micro Devices (AMD) falling more than -2%.

Economic data released on Monday showed that the Conference Board’s leading economic index for the U.S. slid -1.0% m/m in April, weaker than expectations of -0.7% m/m and the largest decline in over two years.

Fed Vice Chair Philip Jefferson said on Monday that the central bank must make sure any price increases stemming from policy changes in Washington don’t trigger a persistent rise in inflation, adding that monetary policy is in a “very good place.” Also, New York Fed President John Williams suggested that policymakers may hold off on cutting interest rates until at least September as they navigate an uncertain economic outlook. “It’s not going to be that in June we’re going to understand what’s happening here, or in July. It’s going to be a process of collecting data, getting a better picture, and watching things as they develop,” Williams said. In addition, Atlanta Fed President Raphael Bostic said, “Given the trajectory of our two mandates, our two charges, I worry a lot about the inflation side, and mainly because we’re seeing expectations move in a troublesome way,” repeating his expectation for one interest rate cut this year. Finally, Minneapolis Fed President Neel Kashkari stated that there is currently significant uncertainty in the economy.

U.S. rate futures have priced in a 91.4% probability of no rate change and an 8.6% chance of a 25 basis point rate cut at the conclusion of the Fed’s June meeting.

Meanwhile, JPMorgan CEO Jamie Dimon said Monday that he doesn’t believe the full impact of tariffs has yet passed through to the broader economy. He cautioned that the stock market could plunge as companies contend with added costs for supplies.

Today, investors will focus on speeches from Fed officials Barkin, Bostic, Collins, Kugler, Daly, and Musalem.

Market participants will also look forward to earnings reports from home improvement chain Home Depot (HD) and cybersecurity firm Palo Alto Networks (PANW).

The U.S. economic data slate is empty on Tuesday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.436%, down -0.87%.

The Euro Stoxx 50 Index is up +0.31% this morning, with attention remaining on U.S. tariff policy, geopolitical developments, and the health of the global economy. Utilities and telecom stocks led the gains on Tuesday. Also, shares of renewable energy companies surged after the Trump administration lifted a month-old stop-work order on a major offshore wind project slated for development off the coast of New York. Data from the Federal Statistical Office released on Tuesday showed that Germany’s annual producer prices dropped in April at the fastest pace in six months. Separately, data showed that the Eurozone’s current account surplus jumped in March on higher goods exports, possibly tied to U.S. companies accelerating imports ahead of impending tariffs. Meanwhile, investors continue to keep an eye on U.S. tariff policy, with President Donald Trump’s reciprocal tariffs scheduled to take effect again in early July. On the geopolitical front, President Trump said following his Monday call with Russian President Putin that Russia and Ukraine would begin ceasefire talks immediately. In corporate news, UBS Group AG (UBSG.Z.IX) fell over -2% after Bloomberg reported that the lender was expected to lose the initial phase of a dispute with the Swiss government regarding proposals requiring it to hold additional capital.

Germany’s PPI and Eurozone’s Current Account data were released today.

The German April PPI arrived at -0.6% m/m and -0.9% y/y, weaker than expectations of -0.3% m/m and -0.6% y/y. 

Eurozone March Current Account stood at 50.9B euros, stronger than expectations of 35.9B euros.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.38%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.08%. 

China’s Shanghai Composite Index closed higher today as sentiment improved after the country cut key lending rates for the first time since October. Healthcare and consumer stocks led the gains on Tuesday. China lowered benchmark lending rates by 10 basis points on Tuesday, following an earlier policy rate cut by the nation’s central bank this month aimed at stimulating domestic demand. The one-year loan prime rate was cut to 3.0%, while the five-year rate was trimmed to 3.5%, according to the People’s Bank of China. Also on Tuesday, China’s four largest state-owned banks announced they would reduce deposit rates by up to 25 basis points. Still, Capital Economics’ Zichun Huang said that the Chinese central bank’s monetary policy easing is likely to offer only marginal benefits. “Modest rate cuts alone are unlikely to meaningfully boost loan demand or wider economic activity,” the economist noted. Meanwhile, Li Chao, spokesperson for the National Development and Reform Commission, said at a Tuesday press conference that the majority of China’s job and economic stabilization policies will be enacted by the end of June, and the country will intensify efforts to attract foreign investment. In other news, Nomura on Monday raised its 2025 China growth forecast to 4.5% from 4% as the firm became more optimistic about the economy’s outlook. In corporate news, 3SBIO soared over +32% in Hong Kong after the biotech company entered into a licensing agreement with U.S. pharmaceutical giant Pfizer. Also, Chinese battery giant Contemporary Amperex Technology’s shares jumped more than +16% on their Hong Kong debut.

Japan’s Nikkei 225 Stock Index gave up most of its early gains and closed slightly higher today. Electronics and bank stocks outperformed on Tuesday. At the same time, utilities and real estate stocks slumped. The Japanese currency extended gains on Tuesday after Finance Minister Katsunobu Kato said he is arranging a bilateral meeting with U.S. Treasury Secretary Scott Bessent this week to discuss issues, including currency matters. A stronger yen typically pressures exporter shares by diminishing the value of overseas earnings when converted back into Japanese currency. Meanwhile, investors remain focused on the outcome of U.S. trade negotiations with Japan after a trade deal with China earlier this month raised expectations. Japan’s top trade negotiator, Ryosei Akazawa, said on Tuesday that Tokyo’s position remains unchanged in seeking the removal of U.S. tariffs in bilateral trade negotiations. He added that Tokyo would not hurry to finalize a trade deal if it risks undermining the country’s interests. Japan’s Kyodo news agency reported on Tuesday that Akazawa is set to travel to Washington this week to participate in the third round of talks, which could begin on Friday. In corporate news, Seven Bank jumped more than +9% after Nikkei Business reported that Seven & i Holdings intends to sell a partial stake in the company to trading house Itochu, with an announcement expected as soon as May 30th. Investor focus now shifts to Japan’s April trade data, scheduled for release on Wednesday, which will provide insights into the impact of U.S. President Donald Trump’s trade war. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.75% to 24.21.

Pre-Market U.S. Stock Movers

KLA Corp. (KLAC) fell over -1% in pre-market trading after Deutsche Bank downgraded the stock to Hold from Buy.

MongoDB (MDB) dropped over -2% in pre-market trading after Loop Capital downgraded the stock to Hold from Buy.

The AES Corporation (AES) slid more than -1% in pre-market trading after Jefferies downgraded the stock to Underperform from Hold with a price target of $9.

Asana (ASAN) slumped over -4% in pre-market trading after Morgan Stanley downgraded the stock to Underweight from Equal Weight with an unchanged price target of $14.

Pegasystems (PEGA) climbed more than +7% in pre-market trading after S&P Dow Jones Indices announced that the company would join the S&P MidCap 400 Index, effective May 22nd.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - May 20th

Home Depot (HD), Palo Alto Networks (PANW), Keysight Technologies (KEYS), Viking Holdings (VIK), Elbit Systems (ESLT), Amer Sports (AS), ZTO Express Cayman (ZTO), Huazhu (HTHT), Toll Brothers (TOL), Nebius NV (NBIS), Eagle Materials (EXP), Vipshop (VIPS), Bilibili (BILI), Pony Ai (PONY), Modine Manufacturing (MOD), GDS Holdings (GDS), Champion Homes (SKY), FinVolution Group (FINV), IHS Holding (IHS), Tuya (TUYA), ViaSat (VSAT), Evolv Technologies Holdings (EVLV), Hovnanian Enterprises (HOV).