U.S. Futures & World Markets

Stocks are flat premarket as semiconductor stocks look to rebound from yesterday's slide. They finished well off the session lows, so a bounce today would be a follow-through from that late-day reversal.

Inflation fears reemerged after Tuesday's data showed hotter-than-expected numbers. The bond market has started to react — the 10-year Treasury yield sits just shy of 4.5%, getting closer to a level that could be a problem for stocks.

Iran headlines will take a backseat to President Trump's visit to China. The FT reports Trump will discuss U.S. arms sales to Taiwan with President Xi during the summit.

Consumer stocks have been weak, and there is clearly anxiety around the health of the consumer. Goldman's Rich Privorotsky summed it up well:

"Reality is that the oil shock is creeping into the equity market, it is just getting drowned out by semi fever."

Rich Privorotsky — Goldman Sachs
S&P Futures vs. Fair Value: Flat  |  10-Year Yield: 4.46%

CORE Headlines

Charts & Data

The Fed should not be cutting rates. Charlie Bilello: "Monetary policy should be restrictive until the 13% additional inflation we've had since January 2020 above the 2% trendline is erased. There's no point in having a 2% inflation target if you're not going to adhere to it."

April CPI: not a kind print for the inflation-is-transitory camp. Nick Timiraos via Daily Chartbook: "Core services excluding housing was +0.45% month-over-month, the 3rd highest since January 2025. On a 12-month basis, the 3.3% reading is the highest since February 2025. The optimistic story that recent firming would be tariff-led and therefore transitory isn't supported by this data."

The real inflation hit. Geiger Capital: "Friendly reminder: if your income has not risen by at least 30% since COVID hit, you are now poorer — and that is using the government's own data. The real number is likely 40%+."

Semis today vs. dot-com: not the same. Phil Rosen: "Micron trades at 9x earnings today while Qualcomm traded at 146x during the dot-com bubble. This chart should end the comparisons between 2026 and 2000."

Labor market stable. ADP via Daily Chartbook: "For the four weeks ending April 25, U.S. private employers added an average of 33,000 jobs a week. Job growth remains stable." Supportive backdrop for consumer spending, even with gas prices elevated.

No signs of a credit cycle. Torsten Slok, Apollo: "Default rates are falling, distressed exchanges are declining, and the number of liability management exercises are declining. The bottom line is that the economy is strong and there are no signs of a full-blown credit cycle."

Silver at all-time highs — but multiple swings at resistance. Nautilus Research: "Multiple swings at or around all-time highs may not be a good sign." Worth watching for a resolution.

Goldman Risk Appetite at 5-year high. Cullen Morgan, Goldman Sachs via Daily Chartbook: "The GS Risk Appetite Indicator is now at its highest level in over five years, and one of the highest readings on record." When everyone is bullish, the incremental buyer is harder to find.

Investor risk appetite improving but still below pre-war levels. S&P Global via Daily Chartbook: "Investor risk appetite improves for the second month in May, though remains subdued compared to pre-war levels. The improved mood reflects growing optimism on corporate profits and the US economy outlook."

Leveraged ETF rebalancing has been a massive tailwind. Charlie McElligott, Nomura via Daily Chartbook: "Over the past month, leveraged ETF rebalancing flows have exploded higher with roughly $115B of total buying — Tech alone accounted for ~$46.9B, semis another ~$43.8B, and Mag7 exposure added ~$13.2B." This is mechanical buying, not fundamental conviction.

NDX spot and vol positively correlated — historically signals a pullback. Cullen Morgan, Goldman Sachs via Daily Chartbook: "Over the last 20 sessions, NDX spot and 1-month upside vol have been positively correlated. Historically, this has signaled a short-term pullback." The streak of NDX spot and vol moving in tandem every session for five consecutive days is tied for the longest on record.

Narrow leadership hard to interpret. HBM Strategies via Daily Chartbook: "This type of extreme narrow leadership barely existed in earlier decades, so most signals are clustered in the post-2020 market regime. Interesting data point, but hard to draw strong conclusions from only a handful of occurrences."

S&P back at its long-term trend channel support. Deutsche Bank via Daily Chartbook: "The S&P 500 has rallied back to the lower bound of its trend channel in place since October 2022. If buyers defend this level, the index should begin to grind higher from here."

Interesting Reads

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.