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Stocks open mixed as focus turns to inflation data

U.S. stocks opened mixed on Tuesday, with the technology sector serving as a bright spot, as Wall Street kicked off a shortened holiday week by focusing on an upcoming inflation report closely watched by the Federal Reserve.

The benchmark S&P 500 (^GSPC) rose about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.4% after solid closing gains on Friday. The Dow Jones Industrial Average (^DJI), which lists fewer technology names, fell 0.3%.

Major indicators are regrouping after a volatile week as traders return from the Memorial Day break. Stocks have been swayed by two impulses: on the one hand, declining optimism about interest rate cuts and on the other, high expectations of AI. The latter is led by Nvidia (NVDA), whose shares continued to decline 3% in premarket trading following the earnings beat.

Investors are now keeping a heavy eye on inflation and counting down to the release of the Federal Reserve’s preferred PCE measure on Friday. Fed officials have issued a slew of warnings that the numbers must indicate a real cooling in inflation to trigger a policy change, with Neel Kashkari the latest to join them.

Read more: What influence does the labor market have on inflation?

These comments, along with better-than-expected economic developments and hawkish Fed minutes, have prompted traders to again scale back their bets on rate cuts this year. Data chasers will get updates on first-quarter GDP and consumer confidence later this week, which could be a catalyst.

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Among other individual movers, GameStop (GME) shares rose more than 20% in early trading. The games retailer said Friday it had raised not far from $1 billion from a stock sale during the meme rally earlier in May. Meanwhile, Apple (AAPL) rose on data showing iPhone sales in China rose more than 50% in April as retail partners cut prices.

Live4 updates

  • Consumer confidence is recovering for the first time in three months

    Consumer confidence unexpectedly rose in May.

    The Conference Board’s latest index reading was 102, up from 97.5 in April and higher than the 96 economists surveyed by Bloomberg expected. The May result ended three months of declines for the index.

    “Consumers’ assessment of current business conditions was slightly less positive than last month,” Dana Peterson, chief economist for the Conference Board, said in the news release. “However, the strong labor market continued to reinforce consumers’ overall assessment of the current situation. Views of current labor market conditions improved in May, as fewer respondents said jobs were ‘hard to get’.”

    Peterson added: “Fewer consumers expected a deterioration in future business conditions, job availability and income, resulting in an increase in the expectations index.”

  • Dow falls, Nasdaq gains at open

    US stocks opened mixed on Tuesday, with technology serving as a bright spot ahead of a critical inflation report due later this week.

    The benchmark S&P 500 (^GSPC) climbed about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.4% after solid closing gains on Friday. The Dow Jones Industrial Average (^DJI) was the biggest laggard of the morning, falling 0.3%.

  • Foot Locker isn’t out of the woods yet

    Foot Locker (FL) has had a terrible twelve months.

    Poor financial performance has led to a surprisingly poor outlook, sending shares down 16% over the past year.

    The Street is preparing for another terrible quarter from the sneaker and sportswa retailer on Thursday morning.

    EvercoreISI analyst Michael Binetti says investors can expect a “very difficult quarter.” The company could warn again for the entire year.

    He points to several reasons why:

    “In addition to the pressure on low-income consumers, we believe key product launches such as Air Max DN underperformed, and the recent Jordan 4 Industrial Blue is selling below MSRP ($185 vs. $215 MSRP) in the resale channel.”

  • EvercoreISI’s take on Trump 2.0 tariffs

    We see Wall Street starting to crunch the numbers on the economic impact of the new tariffs that President Trump would like to implement if he were to win a second term.

    Today EvercoreISI weighs in with its opinion:

    “Presidents rarely implement or execute the entire campaign idea, and Trump in particular likes to use bold ideas as a launch pad. Nevertheless, it is crucial to understand the dramatic premise Trump has put forward, as it has implications for where we are going. Ultimately, the combination of the proposed 10% overall rate and China’s 60% rate could lead to an overall U.S. weighted average rate of nearly 17%, the highest since the 1930s. On a static basis (that is, without assuming any dynamic economic effects), rates would rise from 0.3% of GDP to 1.9% of GDP – an increase of over $400 billion per year in major retaliation trading partners.”

    Are markets undervaluing a new Trump trade war?Are markets undervaluing a new Trump trade war?

    Are the markets underestimating a new trade war from Trump? (EvercoreISI)

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