True to its winning form since April 7, the stock market overcame an early loss yesterday with the help from the mega-cap stocks. The gains for the major indices came on relatively light volume, yet the more important element is that there was no strong conviction on the part of sellers.
The stock market, which has logged huge gains since the April 7 lows, remained the picture of resilience. The equity futures are soft this morning, but they aren’t bowing either to any material selling pressure.
Currently, the S&P 500 futures are down eight points and are trading 0.1% below fair value, the Nasdaq 100 futures are down two points and are trading in line with fair value, and the Dow Jones Industrial Average futures are down 82 points and are trading 0.2% below fair value.
There might be an undercurrent of growth concerns holding buyers back, along with concerns about valuations and a seeming sense of complacency, given that any negative developments continue to get shrugged off.
Some of the growth concerns have percolated with China’s Caixin Manufacturing PMI for May shrinking to its lowest level (48.3) since 2022 and the OECD cutting its 2025 global GDP growth forecast to 2.9% from 3.1% and its U.S. growth forecast to 1.6% from 2.2%.
Those developments, a successful 10-yr Japanese government bond sale, and a friendly May CPI print (1.9% yr/yr) for the eurozone contributed to some overnight buying interest in the Treasury market that took the 10-yr note yield to 4.41% and the 30-yr bond yield to 4.93%. They currently sit at 4.43% and 4.96%, respectively, down from yesterday’s settlement levels of 4.46% and 5.00%.
There hasn’t been much corporate news of note to move things along this morning, although some of the more prominent headlines in that arena include Meta Platforms (META) inking a 20-yr agreement with Constellation Energy (CEG) to provide nuclear energy and Dollar General (DG) pleasing with its earnings results and guidance.
Today’s economic calendar is limited to the April Factory Orders Report (Briefing.com consensus -3.1%; prior 4.3%) and the April JOLTS – Job Openings Report (prior 7.192M). Both will be released at 10:00 a.m. ET.
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Originally Posted June 3, 2025 – Little conviction in early going
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