The S&P 500 Index ($SPX) (SPY) today is down -0.23%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.16%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.39%.  June E-mini S&P futures (ESM25) are down -0.22%, and June E-mini Nasdaq futures (NQM25) are down -0.38%. 

Stock indexes today are under pressure as bond yields climb on concern the Fed will take a wait-and-see approach before cutting interest rates.  The 10-year T-note yield today is up +4 bp at 4.49%.  On Monday, Fed Vice Chair Jefferson and New York Fed President Williams said that they want to wait for more information before deciding on the future of interest rates and that it "may take months" to better understand tariffs and other policies from the Trump administration and the outlook for the economy.  Stocks are also being weighed down by a negative carryover from last Friday when Moody's Ratings stripped the US of its top credit rating.

The markets this week will focus on any tariff news or signing of any new trade deals.  Starting today, G-7 finance ministers and central bank governors will meet in Braniff, Canada, through Thursday.  On Thursday, weekly initial unemployment claims are expected to climb +1,000 to 230,00. Also, the May S&P manufacturing PMI is expected to fall -0.3 to 49.9.  Finally, on Thursday, Apr existing home sales are expected to climb +2.0% m/m to 4.10 million.  On Friday, Apr new home sales are expected to fall -4.7% m/m to 690,000.

The markets are discounting the chances at 5% for a -25 bp rate cut at the next FOMC meeting on June 17-18.

Q1 earnings reporting season is winding down.  So far, over 85% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest since Q2 of 2024.  Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season.  Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.  

Overseas stock markets today are higher.  The Euro Stoxx 50 is up +0.47%.  China's Shanghai Composite closed up +0.38%.  Japan's Nikkei Stock 225 closed up +0.08%.

Interest Rates

June 10-year T-notes (ZNM25) today are down -3 ticks.  The 10-year T-note yield is up +4.4 bp to 4.491%.  June T-notes today are under pressure on negative carryover from weakness in European government bonds.  T-notes are also pressured by negative carryover from last Friday when Moody's Ratings downgraded the US government's credit rating from Aaa to Aa1, which may prompt investors to demand higher yields to hold Treasuries.    

European government bond yields today are moving higher.  The 10-year German bund yield rebounded from a 1-week low of 2.555% and is up +2.4 bp at 2.612%.  The 10-year UK gilt yield is up +3.9 bp to 4.703%.

German Apr PPI fell -0.9% y/y, weaker than expectations of -0.6% y/y and the biggest decline in 6 months.

ECB Governing Council member Knot said he "can't rule out" another ECB interest rate cut in June, but it's "too early" to make decisions without seeing fresh quarterly forecasts.

ECB Governing Council member Wunsch said the Eurozone economy may need interest rates at "mildly supportive" levels to ensure inflation doesn't fall below target after a series of shocks.

Swaps are discounting the chances at 94% for a -25 bp rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

Cruise line and casino stocks are sliding today.  Norwegian Cruise Line Holdings (NCLH) is down more than -2%.  Also, Carnival (CCL), Royal Caribbean Cruises Ltd (RCL), Las Vegas Sands (LVS), MGM Resorts International (MGM), Wynn Resorts (WYNN), and Caesars Entertainment (CZR) are down more than -1%. 

Chip stocks are under pressure today and are weighing on the broader market.  Marvell Technology (MRVL) is down more than -2% to lead losers in the Nasdaq 100.  Also, Nvidia (NVDA) is down more than -1% to lead losers in the Dow Jones Industrials.  In addition, Advanced Micro Devices (AMD) is down -0.84%, ASML Holding NV (ASML) is down -0.76%, ARM Holdings Plc (ARM) is down -0.72%, and GlobalFoundries (GFS) and Qualcomm (QCOM) are down -0.50%. 

AES Corp (AES) is down more than -2% to lead losers in the S&P 500 after Jeffries downgraded the stock to underperform from hold with a price target of $9.

Trip.com (TCOM) is down more than -6% after reporting Q1 gross profit of 11.13 billion yuan, below the consensus of 11.17 billion yuan.

Viking Holdings Ltd (VIK) is down more than -4% after reporting a Q1 net loss of -$105.5 million, -79% y/y. 

Ryman Hospitality Properties (RHP) is down more than -2% after announcing an underwritten registered public offering of 2.3 million shares of its common stock.

Nutanix (NTNX) is down more than -2% after Raymond James downgraded the stock to market perform from outperform.

Amer Sports (AS) is up more than +17% after reporting Q1 revenue of $1.47 billion, better than the consensus of $1.38 billion, and raised its full-year revenue forecast to up +15% to +17% from a previous estimate of +135 to +15%.

Pegasystems Inc (PEGA) is up more than +5% after S&P Dow Jones Indices announced the company will replace Nordstrom in the S&P Midcap 400 Index before the start of trading on May 22. 

Deckers Outdoor Corp (DECK) is up more than +3% after TD Cowen raised its price target on the stock to $175 from $150.

Air Lease (AL) is up more than +2% after Citigroup upgraded the stock to buy from neutral with a price target of $68.

Pfizer (PFE) is up more than +1% after entering into a license agreement with 3SBio to develop and manufacture a bispecific antibody cancer drug in China. 

Dollar Tree (DLTR) is up more than +2% after BWG Global upgraded the stock to positive from mixed.

Earnings Reports (5/20/2025)

Amer Sports Inc (AS), Eagle Materials Inc (EXP), Home Depot Inc/The (HD), Keysight Technologies Inc (KEYS), Palo Alto Networks Inc (PANW), Toll Brothers Inc (TOL), XP Inc (XP).