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Stocks open mixed as focus turns to inflation data

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US stocks opened mixed on Tuesday, with techs serving as a bright spot while Wall Street kicked off a holiday-shortened week by focusing on a coming inflation report watched closely by the Federal Reserve.

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

The major gauges are regrouping after a volatile week as traders return from the Memorial Day break. Stocks have been buffeted back and forth by two impulses: fading optimism for rate cuts on one hand, and high hopes for AI on the other. The latter is led by Nvidia (NVDA), whose shares continued a post-earnings tear, gaining 3% in premarket trading.

Investors are now firmly back on inflation watch, counting down to the release of the Federal Reserve’s preferred PCE gauge on Friday. Fed officials have sent out a drumbeat of warnings that data must show real cooling in inflation to trigger a policy shift, with Neel Kashkari the latest to join them.

Read more: How does the labor market affect inflation?

Those comments, alongside hotter-than-expected economic prints and hawkish Fed minutes, have prompted traders to once again scale back bets on interest rate cuts this year. Data chasers will get updates on first quarter GDP and consumer confidence later this week that could prove catalysts.

In other individual movers, GameStop (GME) stocks soared over 20% in early trading. The games retailer on Friday said it had brought in not far off $1 billion from a share sale during the meme rally earlier in May. Meawnwhile, Apple (AAPL) rose following data showing iPhone sales in China jumped over 50% in April as retail partners cut prices.

Live3 updates

  • Dow falls, Nasdaq gains at open

    US stocks opened mixed on Tuesday, with tech 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) added roughly 0.4% after solid closing gains on Friday. The Dow Jones Industrial Average (^DJI) was the biggest laggard of the morning, slipping 0.3%.

  • Foot Locker isn’t out of the woods

    Foot Locker (FL) has had a horrendous 12 months.

    Poor financial performances have led to surprisingly poor outlooks, sending shares down 16% in the past year.

    The Street is bracing for another dreadful quarter from the sneaker and sportswa retailer when it reports Thursday morning.

    EvercoreISI analyst Michael Binetti says investors should expect a “very tough quarter.” The company could warn again for the full year.

    He points to several reasons why:

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

  • EvercoreISI’s take on Trump 2.0 tariffs

    We have started to see Wall Street crunch the numbers on the economic impact of the new tariffs that President Trump would be keen on implementing if he were to win a second term.

    Today EvercoreISI weighs in with its take:

    “Presidents rarely enact or implement the full entirety of any campaign idea and Trump in particular likes to use bold ideas as a launching off. Nevertheless, it is critical to understand what a dramatic starting point Trump has put forward as that has implications for where we could ultimately land. Taken at face value, the combination of the proposed 10% across-the-board tariff and the 60% China tariff would lead to an overall U.S. weighted average tariff rate of nearly 17%, the highest since the 1930s Smoot-Hawley era. On a static basis (i.e., not assuming any dynamic economic effects), tariffs would rise from 0.3% of GDP to 1.9% of GDP – an increase of more than $400 billion annually. Such a dramatic move would almost certainly lead to major retaliation by trading partners.”

    Are markets under-pricing a new Trump trade war?

    Are markets under-pricing a new Trump trade war? (EvercoreISI)

Read the full article here

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