MARKET WRAP

A slight pullback for equities today following yesterday’s sharp rally. There was a release of the Fed minutes, but that wasn’t a huge market mover. Stocks did react negatively to a headline on chip designs being banned from China. We’ll see if that survives a TACO cycle. After the close Nvidia beat. The stock is up about +3%, with the potentially more market moving conference call to come.

In regular hours, SPX was -0.6%, QQQ -0.5% and IWM -1%. The 10Y yield ticked higher to 4.48%. The dollar rally followed through from yesterday and DXY is just shy of $100. Oil was higher, gold slightly lower.

After hours: Nvidia beat on earnings and revenue, while its data center business reported YOY growth over 73%. The stock is up about +3% after hours. QQQ is up about 0.4%. Conference call to come.

• MRKT Call: Guy and Dan discuss the recent range bound market vs tariff news, a preview of NVDA and MRVL into earnings, and a look at recent changes in consumer confidence.

• RiskReversal Pod: Gene Munster joins Dan to discuss OpenAI / Jony Ive, non screen AI devices, Tesla vs BYD, and Google’s recent search innovations.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow closes more than 200 points lower Wednesday ahead of Nvidia earnings (CNBC)

• Trump orders US chip designers to stop selling to China (FT)

• Fed worried it could face ‘difficult tradeoffs’ if tariffs reaggravate inflation, minutes show (CNBC)

• Asia’s $7.5 Trillion Bet on US Assets Is Suddenly Unravelling (Bloomberg)

• Japan Bonds Draw Weak Demand as Rise in Superlong Yields Sparks Concern (WSJ)

• Trump Bristles at ‘TACO Trade’ That Bets On Him Backing Down (Bloomberg)

• Elon Musk says he's "disappointed" by Trump's "big, beautiful bill" and what it means for DOGE (CBS)

• GM Invests in V-8 Engines as It Backpedals on EVs (WSJ)

• Luxury Brands Are Paying for Over-the-Top Price Hikes (WSJ)

• Dick’s Sporting Goods stands by full-year guidance - even with tariffs looming (CNBC)

• Macy’s cuts profit outlook as tariffs, promotions hit its business (CNBC)

• Abercrombie & Fitch soars more than 15% even as retailer slashes profit outlook due to tariffs (CNBC)

WHAT’S NEXT?

The release of the FOMC minutes came and went without much impact — just as expected by the options market. Investors were largely in wait-and-see mode, with most of the attention squarely focused on Nvidia's earnings report due out tomorrow.

Since the sharp gap higher on May 12th, sparked by the de-escalation in U.S.-China trade tensions, the S&P 500 has been stuck in a tight but choppy range — roughly 3% top to bottom. While we've seen plenty of intraday volatility within that range, none of the moves have been particularly decisive. That indecision may persist until we get closer to early July, when the current round of trade war pause deadlines approaches.

Options markets seem to agree. SPX options and VIX futures are both pricing in a relatively gradual climb in volatility as we head into the summer. Importantly, they’re not flashing too much on early July risk  — expectations for a major spike around the tariff deadlines remain fairly indecipherable in future pricing. That said, if recent history is any guide, it's often the weeks leading up to those key dates where volatility begins to stir. This version would be whether enough progress is made to avoid higher tariffs kicking in. If we get to mid June (just two weeks away) and there aren’t more definitive signs of progress, market vol is likely to begin to pick up. For now, stocks are in a bit of a holding pattern.

Tomorrow is a potential market moving GDP print as well as a slew of retail earnings including Costco, as well as chipmaker Marvell after the close.

Thursday May 29th

• Pre-Market: BBY 8%, KSS 14%

• 8:30am - GDP

• 10am - Pending Home Sales

• After Hours: COST 3.5%, MRVL 10%, AMBA 11%, ZS 6%, GAP 11%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Nvidia Earnings Preview

• Analysis: SPX, US10YY, TLT, TOL, LEN, DXY, AVGO, MRVL, TSLA

• Earnings Preview: NVDA, MRVL

• Call of the Day: AVGO upgrade

• Chart of the Day: Goldman on social media bullish divergence from investor confidence numbers.

• John Butters / FactSet Earnings Report: EPS estimate declines largest since 2023, all 11 sectors declined with Energy the worst.

• Your Questions Answered:

  • Thoughts on MS?

  • Comments on TSLA bots doing chores, safe to say those are working in TSLA factories right now?

Learn more about our sponsor, CME Group.

Watch RiskReversal Podcast’s newest episode: Nvidia Q1 Earnings Preview with Gene Munster

Dan Nathan and Gene Munster, managing partner at Deep Water Asset Management, discuss NVIDIA's upcoming earnings report, the company's AI hardware advantage, and the broader spending on AI. They also delve into OpenAI's significant acquihire of Jony Ive, the potential for future non-screen devices, and the market's reaction to these developments. The conversation touches on Google's search innovations post-IO and the implications for their growth. The duo also evaluate Tesla's challenges amid price wars with BYD and the impact on their delivery numbers and market share. The episode is an in-depth look at current tech trends, market sentiment, and long-term investment strategies.

Timecodes 0:00 - NVDA 13:00 - AAPL 19:45 - Trade Impacts 24:50 - OpenAI x Jony Ive 31:20 - Google I/O 34:30 - TSLA

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