Mixed Trading on S&P 500 as Tech Firm Earnings Reports Loom

Also, 10-year T-note, gold, crude oil and Japanese yen futures

1. S&P 500 E-mini futures (/ES): -0.1% 
2. 10-year T-note futures (/ZN): 0% 
3. Gold futures (/GC): +0.26% 
4. Crude oil futures (/CL): -1.13% 
5. Japanese yen futures (/6J): +0.36% 

Another weekend of confounding tariff headlines from the White House has done little to stir markets at the start of the new week. Traders may be overlooking tariffs, if only temporarily, in favor of earnings announcements and macro reports coming out over the next few days. But the brutal reality of the trade war is lurking, with data from shipping tracker Port Optimizer showing the number of freighters scheduled to arrive from China in the U.S. ports of Long Beach and Los Angeles is down 44% for the week of May 4 to 10. 

S&P 500 futures (/ESM5) rose this morning to start the week as last week’s improved market sentiment holds up ahead of a packed week of earnings reports. Treasury Secretary Scott Bessent said progress is being made on trade and that a deal with India could come soon. Microsoft (MSFT), Meta Platforms (META), Amazon (AMZN) and Apple (AAPL) will report earnings later this week. Domino’s Pizza (DPZ) fell nearly 3% in pre-market trading after the company posted weak same-store sales. Tomorrow morning, SoFi (SOFI), PayPal (PYPL) and UPS (UPS) will report earnings. 

10-year T-note futures (/ZNM5) were slightly lower after coming off a second winning week, dropping about 0.16% in early trading. Bond yields have been pushed lower recently as investors’ fears over the trade war and its potential affect on inflation have eased. Still, yields remain up from their March levels and the vibe in the Treasury market remains defensive. Traders are looking ahead to the jobs report due week as earnings roll in. Meanwhile, it will be a light week for Treasury auctions. 

Gold prices trimmed early losses to trade slightly positive this morning as U.S. trading kicked off. Profit takers came into the market last week as political and trade tensions cooled. This week’s data on inflation and jobs will be closely watched by gold traders. The metal remains poised for more gains if the Federal Reserve cuts rates later this year. Silver prices (/SIN5) lagged, and copper (/HGN5) rose 0.3% early today. 

Like with the rest of the market, crude oil prices hinge on the ongoing trade talks, or lack of them, as investors await certainty on how this will all play out. Oil futures (/CLM5) were slightly lower, about 0.14%, this morning. Prices maintained above the 62 handle most of last week following the deep selloff from earlier this month. OPEC+ meets next week, and analysts expect the group to extend the rollback on voluntary production cuts for a second month. The talks between the U.S. and Iran continue in Oman this week, as traders remain cautiously optimistic that a deal can be hashed out. 

The U.S. dollar was slightly weaker vs. most of its major peers at the start of the week. Japanese yen futures (/6JM5) rose about 0.3% in early trading following a pullback last week. The dollar’s status has come into question amid the turmoil in the market that has resulted from the U.S. trade war, and until investors get more clarity on the outcomes, the dollar could continue to face significant headwinds. The Bank of Japan (BOJ) is expected to keep rates steady later this week. Traders expect that the BOJ will hike rates later this year, but the slowdown in global growth could push those hikes farther out in time. Still, the yen may continue to climb, as foreign traders remain wary of U.S. assets for now. 

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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