- U.S. markets regained more ground yesterday and global stocks were mixed today prior to the opening bell in New York. Analysts are bullish as the macro data continues to suggest fertile territory for stocks. U.S. inflation came in lower than expected at 2.3% and JPMorgan walked back its forecast on the chances of an upcoming recession.
Markets in Asia and Europe were all over the place this morning—Europe was down in early trading as were the major indexes in Japan and India—but China and South Korea rose, following a good day for U.S. stocks on Tuesday.
The S&P 500 closed up 0.72% yesterday, putting it back in positive territory by 0.084% for the year to date. S&P futures were marginally down prior to the opening bell.
The macro data continues to look good for equities. U.S. inflation came in lower than expected, at 2.3%. That suggests Fed chair Jerome Powell may be tempted to lower interest rates sooner than previously thought, which would boost stocks.
JPMorgan also lowered its prediction on the possibility of a recession in the U.S. The bank now believes the chance is “below 50%” after the pause in the trade war between the U.S. and China was announced. The bank previously put the chance of a recession at 60%.
Wall Street is currently up to its armpits in bullish research notes.
At Goldman Sachs, Peter Oppenheimer and his team told clients that equities were out of their bear market status. “Our view remains that we are not likely to experience a structural bear market. While valuations of equities, particularly in the US, are high, they have been largely reflective of strong fundamentals and so there has not been a bubble …The announcement of a 90-day pause in the retaliatory tariffs imposed in April, which will leave the US and China with 2025 tariff increases of +30pp and +15pp, respectively, is much better than we had expected.”
President Trump’s trip to Saudi Arabia led to a raft of AI-driven trade deals, and that boosted tech stocks. Nvidia was up 5.6% and Palantir was up 8%. Coinbase rose an extraordinary 24% on news that it would be included in the S&P 500, replacing Discover Financial.
“We believe the market opportunity in Saudi Arabia could over time add another $1 trillion to the broader global AI market in the coming years and this dynamic is not being priced into the market and tech names in our view,” Wedbush’s Daniel Ives and his team told their clients.
Here’s a snapshot of the action prior to the opening bell in New York.
- The S&P 500 rose 0.72% yesterday, meaning it is now back in the green by 0.084% for the year to date.
- S&P futures were down nearly 1% this morning, premarket.
- Coinbase rose 24% on news that it would be included in the S&P 500, which receives a vast amount of default institutional and retail buying.
- It was a strong day for other tech stocks, too. Nvidia was up 5.6% and Palantir was up 8%.
- Asia was mixed today, with the main indexes in China and India on the rise but Japan and South Korea both declined.
- The Stoxx Europe 600 was down 0.2% in early trading.
