MARKET WRAP

Equities came roaring back today, with SPX up +2% following the quick trade war de-escalation between the US and EU.  If one were trying to get equities back to highs following the recent rally stall, shaking out some investors only to turn around with a ‘PSYCH!’ is a good way to do that (more on that trading dynamic below). On the day, SPX +2.1%, QQQ +2.4%, and IWM +2.5%. 

Elsewhere the big story continues to be the the 10Y yield, which has now retreated back to 4.45%. DXY was higher, now $99.60. Gold and Oil were both lower. Tomorrow is Nvidia earnings (due at about 4:20 eastern). The expected move in the stock is about 6.5%.

After hours: OKTA is down by -11% (vs an 11% expected move), BOX is higher by +11% (vs an 8% expected move). SPY closed well and is following through a tad after hours.

• MRKT Call: Discussion of the quick reversal on the EU tariff news, treasuries, Japan, Nvidia and more.

• RiskReversal Pod: Dan and Guy discuss Tesla, and BYD. Preview the upcoming economic data, Fed minutes, GDP, and PCE, plus a look at NVDA into earnings.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow climbs more than 700 points on EU tariff delay, consumer confidence surge (⁠CNBC⁠)

• Global Bonds Rally as Japan Looks to Stabilize Its Debt Market (⁠Bloomberg⁠)

• Investors Pile Into ETFs at Record Pace Despite Market Turmoil (⁠WSJ⁠)

• All eyes on China restrictions as Nvidia gets set to report results ⁠(CNBC)⁠

• Xi Mulls New Made-in-China Plan Despite US Call to Rebalance (⁠Bloomberg⁠)

• Tesla shares climb as Musk pledges to be ‘super focused’ on companies ahead of Starship launch ⁠(CNBC)⁠

• India’s iPhone exports to the U.S. soared an estimated 76%. But Trump, Beijing won’t make further growth easy (⁠CNBC⁠)

• Apple to Debut Dedicated Gaming App Within Days of Switch 2’s Arrival ⁠(Bloomberg)

WHAT’S NEXT?

Today’s rally not only erased all the selling sparked by the late week escalation — it pushed the SPX higher than it was before the Apple/EU tweets hit.

This kind of move is classic in a volatile news driven market. When negative news breaks, it often forces some investors to sell — whether out of fear, profit taking, or just uncertainty. But when that same story suddenly flips, it creates a powerful dynamic: many who sold scramble to get back in, competing with fresh buyers. That combination — new demand plus re-buying — tends to supercharge the bullish reaction, just like we saw today. Stocks tend to need downdrafts to shake the tree before their next leg higher and this is the type of quick news cycle turnaround that almost looks purposely created to do just that. 

Today’s move puts SPX less than 1% from the mid march V reversal high and just 4% from the February all time highs. Tomorrow is FOMC minutes and Nvidia earnings. SPX options are clear on what’s the larger potential catalyst with 18IV for Thursday (on options that capture NVDA’s print) as opposed to just 15IV for tomorrow’s options that capture the FOMC minutes, but not Nvidia. (NVDA reports around 4:20 eastern tomorrow). 

Wednesday May 28th:

• Pre-market: DKS 6%, ANF 12%, M 8%

• 2pm - FOMC Minutes

• After hours: NVDA 6.5%, CRM 7%, AI 12%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Markets Rally On EU Tariff Pause

• Analysis: SPX, US10YY, JPY, DXY, NVDA, WDAY, PDD, CRWV, NVO, LLY 

• Earnings Preview: NVDA

• Call of the Day: Citi upgrades DELL

• Call of the Day 2: Barclay’s downgrades CRWV

• Your Questions Answered:

  • Did you see FHFA director Pulte’s call for Powell to lower rates?

  • Buy or fade uranium rally?

Learn more about our sponsor, FactSet.

Watch RiskReversal Podcast’s newest episode: All Eyes On $NVDA

Dan Nathan and Guy Adami kick off the RiskReversal podcast with discussions on the merits of a four-day work week and housekeeping announcements including upcoming guest appearances. The episode covers a range of topics including recent market movements, the impact of geopolitical events on the market, and specific company performances like Nvidia, Salesforce, Tesla, and BYD. Economic data, including the upcoming Fed minutes, GDP, and the PCE inflation reading, is also discussed. The hosts explore the complexities of the bond market, the role of the US dollar, and the geopolitical landscape with a focus on the Ukraine conflict and China. They also touch on gold and Bitcoin's performance in the current market scenario.

Timecodes: 0:00 - Intro / 4:30 - Weekend gap / 12:30 - NVDA / 16:00 - CRM 22:15 - BYD vs TSLA / 27:00 - Geopolitics & Data

Learn more about our sponsor Current and RBC Capital Markets.

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