MARKET WRAP

Another day of small intraday volatility as a morning rally on the heels of a slightly better than expected CPI print and US/China news faded mid-day and left stocks in the red. The moves aren’t large but the past two days have seen two way volatility throughout the trading day. On the day SPX -0.3%, QQQ -0.4% and IWM -0.4%.

After a few quiet days volatility picked up elsewhere, with the US10YY lower to 4.42%, DXY lower, now $98.68 and Gold higher. Of special note, Oil was +4.5% to near $68 on Iran/US nuclear negotiations looking unlikely, and is now up more than 10% this month.

After hours: ORCL is up nearly +7% on earnings. SPY and QQQ higher than the close after hours.

• MRKT Call: Guy and Dan on the market reaction to CPI and the China/US news, plus Bessent/Fed rumors, the dollar, gold, crude and more.

• RiskReversal Pod: U.S./China, the CPI, a check in on interest rate projections, consumer data, and valuation metrics. Plus, the energy sector’s resurgence and earnings previews for Oracle and Adobe.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 declines as market comeback pauses while traders wait for more trade deals (CNBC)

• Inflation Rose to 2.4% in May, in Line With Expectations (WSJ)

• Trump Says China Will Supply Rare Earths in ‘Done’ Trade Deal (Bloomberg)

• Appeals Court Keeps Trump’s Sweeping Tariffs in Place for Now (WSJ)

• OpenAI taps Google in unprecedented cloud deal despite AI rivalry, sources say (Reuters)

• Google Expands Buyout Program in Push to Ramp Up AI Spending (WSJ)

• Nvidia’s Huang Sees Quantum Computing Reaching Inflection Point (Bloomberg)

• Nvidia Muscles Into GPU Cloud Market, Rankling New Rivals (The Information)

• JPMorgan’s Jamie Dimon warns U.S. economy could soon ‘deteriorate’ (CNBC)

WHAT’S NEXT?

Equities opened higher today after a slightly cooler-than-expected CPI print and encouraging, if incremental, headlines from the ongoing U.S.-China trade talks. But as flagged in yesterday’s note, the market was primed for a potential “sell the news” reaction—and that’s exactly what played out by midday, with major indexes fading off their highs.

Recent buying had been supported by a few key factors, including steady underlying demand, but also a noticeable short-covering bid from traders wary of getting caught in a squeeze on surprise trade deal headlines. Now, with today’s developments meeting expectations, and more importantly, unlikely to drastically change from here it may free up some market participants to lean more aggressively into profit taking or even short setups, no longer deterred by the risk of a sudden, market-moving tape bomb from the China/U.S. talks.

One other thing to note in the past two days has been the pickup in intraday vol. The closing prices are not indicative of the quick moves we’ve been seeing, both higher and lower throughout the day. That pickup may be temporary, and greatly influenced by the London talks as well as today’s CPI and tomorrow’s PPI, but with SPX 6000 acting as a magnet for now and potentially hiding some of these sharp but light liquidity intraday moves, it may makes sense to pay attention to what’s happening under the hood, and what it portends once the market decides to make a move away from 6k.

• Thursday

  • 8:30am - PPI

  • 8:30am - Initial Jobless Claims

  • After Hours: ADBE 7%, RH 14%

• Expected Moves:

  • SPX 0.7%

  • TLT 0.7%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: S&P 500 Nears All-Time High: What Happens Next?

• Analysis: S&P e-mini, Nasdaq e-mini, Crude, VLO, XOM, DXY, Gold, GOOGL, CHWY, LULU, SNAP, TLT, 

• John Butters’ FactSet Earnings Insight: The amount of companies citing inflation on their reports continues to decline.

• Your Questions Answered:

  • QQQ or VOO?

  • Google p/e a and market cap are the best of the Fateful 8, what say you?

Learn more about our sponsor, CME Group.

Watch RiskReversal Podcast’s newest episode: The Truth Behind the Latest Market Highs

Dan Nathan and Guy Adami host the Wednesday edition of the RiskReversal Podcast, focusing on multiple aspects of the financial markets. They discuss the importance and history of the morning market call, recent developments in U.S.-China trade relations, and their implications on the stock market. The hosts highlight the state of the energy sector and its unexpected resurgence. They also analyze inflation data, future interest rate projections, and the impact of geopolitical tensions on market stability. Noteworthy stock performances, including Oracle and Adobe, are examined in the context of the ongoing AI boom and market expectations. The episode delves into consumer data, valuation metrics, and the potential impact of economic policies on future market behavior.

Learn more about our sponsor Betterment and iConnections.

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