The stock market remains poised for a mostly higher opening amid continued AI-related enthusiasm and a sizable batch of economic data.

Total retail sales increased 0.5% month-over-month in April (Briefing.com consensus: 0.4%) following a downwardly revised 1.6% increase (from 1.7%) in March. Excluding autos, retail sales rose 0.7% month-over-month (Briefing.com consensus: 0.4%) after increasing 1.9% in March.

The key takeaway from the report is that solid spending activity was seen across most retail categories in April, which is when consumers were digesting the gas price shock from the Iran war. Excluding auto and gasoline station sales, retail sales were up 0.5% month-over-month.

Initial jobless claims for the week ending May 9 increased by 12,000 to 211,000 (Briefing.com consensus: 208,000). Continuing jobless claims for the week ending May 2 increased by 24,000 to 1.782 million.

The key takeaway from the report is that, even though initial and continuing jobless claims were up in the latest week, neither has risen to a level that would ring alarm bells about a serious deterioration in the labor market.

There were some inflation alarm bells ringing in the import-export price index, however.

Import prices were up 1.9% month-over-month, leaving them up 4.2% year-over-year. Excluding fuel, import prices rose 0.8% month-over-month and were up 2.9% year-over-year. Export prices jumped 3.3% month-over-month, leaving them up 8.8% year-over-year. Excluding agricultural products, export prices advanced 3.4% month-over-month and were up 9.3% year-over-year.

The S&P 500 futures currently trade 23 points above fair value.

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with Japan's Nikkei (-1.0%) hitting a fresh record before reversing while South Korea's Kospi (+1.8%) finished at a fresh record high. The U.S. delegation led by President Trump met with Chinese leadership today. Today's discussions were reportedly pleasant with the two sides aiming to build a constructive relationship of strategic stability. Japan sold 30-yr JGBs to solid demand and a Bank of Japan policymaker said that a rate hike should happen as quickly as possible. South Korea's President Lee requested a bilateral currency swap line with the U.S. Treasury.

• In economic data:
  • China's April New Loans -CNY10.0 bln (expected CNY320.0 bln; last CNY2.99 trln), April Outstanding Loan Growth 5.6% yr/yr (expected 5.8%; last 5.8%), and April Total Social Financing CNY620.0 bln (expected CNY1.50 trln; last CNY5.23 trln)
  • Japan's April M2 Money Stock 2.3% yr/yr (expected 1.9%; last 2.0%)
  • India's April WPI Inflation 8.30% yr/yr (expected 4.40%; last 3.88%)

---Equity Markets---

• Japan's Nikkei: -1.0%
• Hong Kong's Hang Seng: UNCH
• China's Shanghai Composite: -1.5%
• India's Sensex: +1.1%
• South Korea's Kospi: +1.8%
• Australia's ASX All Ordinaries: +0.1%

Major European indices trade in positive territory while several smaller markets are closed for Ascension Day. Reports from the U.K. indicate that Prime Minister Starmer could face an imminent leadership challenge. It is unclear if Chancellor Reeves would maintain her post in the event of a leadership change. European Central Bank policymaker Kazaks said that the full impact of the Iran war on inflation is not visible yet and that the situation is a bit worse than the ECB's baseline scenario.

• In economic data:
  • U.K.'s Q1 GDP 0.6% qtr/qtr, as expected (last 0.2%); 1.1% yr/yr (expected 0.8%; last 1.0%). March GDP 0.3% m/m (expected -0.1%; last 0.4%), March Industrial Production -0.2% m/m, as expected (last 0.3%); 0.0% yr/yr (expected 0.2%; last -0.5%). March Manufacturing Production 1.2% m/m (expected -0.1%; last -0.2%); 1.2% yr/yr (expected 0.0%; last -0.8%). March trade deficit GBP27.22 bln (expected deficit of GBP19.80 bln; last deficit of GBP22.80 bln). Q1 Business Investment 0.7% qtr/qtr (expected 1.1%; last -2.9%); -1.8% yr/yr (last 1.8%)
  • Spain's April CPI 0.4% m/m, as expected (last 1.2%); 3.2% yr/yr, as expected (last 3.4%). April Core CPI 2.8% yr/yr, as expected (last 2.9%)

---Equity Markets---

• STOXX Europe 600: +0.6%
• Germany's DAX: +1.4%
• U.K.'s FTSE 100: +0.4%
• France's CAC 40: +0.8%
• Italy's FTSE MIB: +0.9%
• Spain's IBEX 35: +0.8%

The S&P 500 futures currently trade 28 points above fair value.

Just released, Total retail sales increased 0.5% month-over-month in April (Briefing.com consensus: 0.4%), following a downwardly revised 1.6% increase (from 1.7%) in March.

Excluding autos, retail sales increased 0.7% (Briefing.com consensus: 0.4%) following a 1.9% increase in March.

Initial jobless claims for the week ending May 9 increased by 12,000 to 211,000 (Briefing.com consensus: 208,000) from a downwardly revised level of 199,000 (from 200,000).

Continuing jobless claims for the week ending May 2 increased by 24,000 to 1.782 million, from the downwardly revised prior level of 1.758 million (from 1.766 million).

Import prices increased 1.9% in April, following an upwardly revised 0.9% increase in March (from 0.8%).

Excluding oil, import prices increased 0.8%, following a downwardly revised 0.2% increase in March (from 0.6%).

Export Prices surged 3.3% in April, following a downwardly revised previous increase of 1.5% (from 1.6%).

Excluding agriculture, export prices increased 3.4%, following a downwardly revised 1.6% increase in March (from 1.7%).

Equity futures point to a higher opening this morning following an eventful day for the stock market that saw the S&P 500 and Nasdaq Composite notch fresh record highs. Stocks opened to broad losses after another hotter inflation reading, though a rebound in mega-cap and semiconductor stocks largely outweighed the losses at the index level. However, breadth was weaker, and the DJIA finished slightly lower for the day.

The Dow is set to open higher this morning, which is due in part to a sharp premarket gain from Cisco (CSCO 117.40, +15.53, +15.2%) after an impressive beat-and-raise earnings report.

Elsewhere, Cerebras Systems (CBRS) adds to the AI enthusiasm after pricing its IPO at $185 per share, well above the revised $150-$160 dollar range.

On the geopolitical front, the summit between President Trump and Chinese President Xi has yet to deliver any surprises, with both leaders agreeing the Strait of Hormuz should remain a free waterway.

The market has a full slate of economic data on the calendar this morning, which includes weekly initial jobless claims data (Briefing.com consensus 208K) and the Retail Sales report for April (Briefing.com consensus 0.4%).

In corporate news:

• Biogen (BIIB 216.70, +12.17, +6.0%) trades higher in the premarket after announcing compelling topline results from the Phase 2 CELIA study evaluating diranersen - the first study to show reduction in tau pathology and cognitive benefit in patients with early Alzheimer's Disease.
• Cisco (CSCO 117.40, +15.53, +15.2%) beat EPS expectations by $0.03, beat revenue expectations, and guided Q4 EPS and revenues well above consensus.
• NVIDIA (NVDA 230.10, +4.27, +1.9%) H200 chip sales were approved by the U.S. government for ten Chinese companies.

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with Japan's Nikkei (-1.0%) hitting a fresh record before reversing while South Korea's Kospi (+1.8%) finished at a fresh record high. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -1.5%, India's Sensex: +1.1%, South Korea's Kospi: +1.8%, Australia's ASX All Ordinaries: +0.1%.

In news:

• The U.S. delegation led by President Trump met with Chinese leadership today.
• Today's discussions were reportedly pleasant with the two sides aiming to build a constructive relationship of strategic stability.
• Japan sold 30-yr JGBs to solid demand and a Bank of Japan policymaker said that a rate hike should happen as quickly as possible.
• South Korea's President Lee requested a bilateral currency swap line with the U.S. Treasury.

In economic data:

• China's April New Loans -CNY10.0 bln (expected CNY320.0 bln; last CNY2.99 trln), April Outstanding Loan Growth 5.6% yr/yr (expected 5.8%; last 5.8%), and April Total Social Financing CNY620.0 bln (expected CNY1.50 trln; last CNY5.23 trln)
• Japan's April M2 Money Stock 2.3% yr/yr (expected 1.9%; last 2.0%)
• India's April WPI Inflation 8.30% yr/yr (expected 4.40%; last 3.88%)

Major European indices trade in positive territory while several smaller markets are closed for Ascension Day. STOXX Europe 600: +0.7%, Germany's DAX: +1.6%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +1.0%, Italy's FTSE MIB: +1.1%, Spain's IBEX 35: +1.0%.

In news:

• Reports from the U.K. indicate that Prime Minister Starmer could face an imminent leadership challenge.
• It is unclear if Chancellor Reeves would maintain her post in the event of a leadership change.
• European Central Bank policymaker Kazaks said that the full impact of the Iran war on inflation is not visible yet and that the situation is a bit worse than the ECB's baseline scenario.

In economic data:

• U.K.'s Q1 GDP 0.6% qtr/qtr, as expected (last 0.2%); 1.1% yr/yr (expected 0.8%; last 1.0%). March GDP 0.3% m/m (expected -0.1%; last 0.4%), March Industrial Production -0.2% m/m, as expected (last 0.3%); 0.0% yr/yr (expected 0.2%; last -0.5%). March Manufacturing Production 1.2% m/m (expected -0.1%; last -0.2%); 1.2% yr/yr (expected 0.0%; last -0.8%). March trade deficit GBP27.22 bln (expected deficit of GBP19.80 bln; last deficit of GBP22.80 bln). Q1 Business Investment 0.7% qtr/qtr (expected 1.1%; last -2.9%); -1.8% yr/yr (last 1.8%)
• Spain's April CPI 0.4% m/m, as expected (last 1.2%); 3.2% yr/yr, as expected (last 3.4%). April Core CPI 2.8% yr/yr, as expected (last 2.9%)

[BRIEFING.COM] The major averages finished mostly higher today as a rebound across mega-cap and tech names pushed the S&P 500 (+0.6%) and Nasdaq Composite (+1.2%) to fresh record highs, while mixed strength in the broader market following another hotter-than-expected inflation reading kept the DJIA (-0.1%) modestly lower.

Stocks opened lower following the release of the April PPI report, as both headline PPI (1.4%; Briefing.com consensus 0.4%) and core PPI (1.0%; Briefing.com consensus 0.3%) came in hotter than expected. The year-over-year readings also accelerated, with headline PPI rising to 6.0% from 4.3% in March and core PPI increasing to 5.2% from 4.0%, reviving concerns that the Fed may need to keep policy restrictive for longer.

There was some upward pressure on longer-dated treasuries, and rate-sensitive pockets of the market generally lagged, but it did not take long for buyers to step in on yesterday's weakness across the tech stocks.

Semiconductors were primed for a rally after yesterday's retreat, and the PHLX Semiconductor Index (+2.6%) handily recovered its losses and extended higher. onsemi (ON 115.71, +11.60, +11.14%) was one of the best-performing S&P 500 components, while NVIDIA (NVDA 225.83, +5.05, +2.29%) provided solid leadership after Bloomberg reported that CEO Jensen Huang will join President Trump on his trip to China.

Elsewhere in the information technology sector (+1.0%), Apple (AAPL 298.87, +4.07, +1.38%) traded to new all-time highs, while software names finished mostly lower.

Mega-cap leadership extended beyond the technology sector, with Alphabet (GOOG 399.06, +15.24, +3.97%) and Meta Platforms (META 616.63, +13.63, +2.26%) pushing the communication services sector (+2.7%) to the top of the leaderboard, while strength in Amazon (AMZN 270.13, +4.31, +1.62%) and Tesla (TSLA 445.17, +11.72, +2.70%) outweighed broad weakness in the consumer discretionary sector (+0.8%).

The Vanguard Mega Cap Growth ETF finished 1.0% higher, and the market-weighted S&P 500 (+0.6%) decidedly outperformed the S&P 500 Equal Weighted Index (-0.4%).

Elsewhere in the consumer discretionary sector, Ford Motor (F 13.58, +1.60, +13.30%) finished as the top-performing S&P 500 component following positive analyst commentary from Morgan Stanley around the company's new energy storage business.

Gains across the broader market were generally more modest, though the health care sector (+0.7%) meaningfully expanded upon yesterday's gains.

Meanwhile, four S&P 500 sectors finished lower. The rate-sensitive utilities (-1.3%) and real estate (-0.9%) sectors were among the worst-performers amid rising Treasury yields, while the financials sector (-1.1%) faced broad weakness and underperformance across financial services names.

Headlines surrounding the U.S.-Iran conflict were relatively muted today as President Trump arrived in Beijing for a summit with Chinese President Xi Jinping, where the leaders are expected to discuss tariffs, the Iran war, and Taiwan over the coming days. Crude oil futures settled today's session $1.29 lower (-1.3%) at $101.01 per barrel. 

Ultimately, strong leadership from mega-cap and AI-linked tech names was enough to push the major indices to fresh record highs, with investors largely brushing off the hotter inflation data and firmer rate backdrop. Even with participation still fairly narrow, the market's largest components continue to do the heavy lifting and keep the broader uptrend intact.

Longer-dated U.S. Treasuries recorded their third consecutive day of losses, while the short end resisted even though the market received a much hotter-than-expected PPI report for April. The U.S. Treasury sold $25 bln in 30-year bonds to weak demand, but the market held its ground after the auction. The 2-year note yield settled down one basis point to 3.99%, the 10-year note yield settled up two basis points to 4.48%, and the 30-year note yield settled up two basis points to 5.05%.

• Russell 2000: +14.6% YTD
• Nasdaq Composite: +13.6% YTD
• S&P Mid Cap 400: +10.6% YTD
• S&P 500: +8.8% YTD
• DJIA: +3.4% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications 1.7%; Prior -4.4%
• April PPI 1.4% (Briefing.com consensus 0.4%); Prior was revised to 0.7% from 0.5%, April Core PPI 1.0% (Briefing.com consensus 0.3%); Prior was revised to 0.2% from 0.1%
  • The key takeaway from the report is that the surge in producer prices in April wasn't just energy-related. That surge accounted for the bulk of the 2.0% increase in the index for final demand goods, but two-thirds of the "broad-based advance" in the index for final demand services was attributed to a 2.7% increase in margins for final demand trade services.