Stock futures edged higher on Wednesday, while bond yields also inched higher after a four-day slide on recent data offering evidence that the economy is slowing.

Traders will be keen to see if data over the coming days supports this narrative, particularly regarding the jobs market.

The ADP jobs report, due at 8.15 ET, will be in focus ahead of this week's big labor-market readout, Friday's nonfarm payrolls.

Overseas Markets

Indian stocks regained some ground. The BSE Sensex climbed 2.5% after falling sharply Tuesday following election results that showed a tight win for Prime Minister Modi.

European stocks rose, while Japan's Nikkei 225 fell almost 1%.

Premarket Movers

CrowdStrike was up about 7% after it reported a surge in quarterly revenue.

Guidewire Software raised its outlook for the year after posting better-than-expected quarterly results. Shares climbed almost 8%.

Hewlett Packard Enterprise results topped forecasts, with sales of AI servers doubling to over $900 million in the quarter. The stock rose almost 15%.

Elon Musk confirmed that many Nvidia chips initially intended for Tesla's electric-vehicle production were diverted to social-media company X due to logistical challenges. Tesla stock edged up premarket.

Watch For:

ADP National Employment Report for May; ISM Report on Business Services PMI for May; EIA Weekly Petroleum Status Report; Bank of Canada rate decision; Earnings from Campbell Soup, Dollar Tree, Lululemon Athletica, Victoria's Secret; Walmart full year 2024 AGM webcast

Today's Top Headlines/Must Reads:

- Job Openings Point to Cooling in Labor Market Ahead of Friday's Payrolls

- The Stock Market Has an Inflation Problem. More Losses Could Be Ahead.

- Americans Have More Investment Income Than Ever Before



The calling of a surprise U.K. general election has proved positive for sterling, which was the best performing G10 currency in May, Ebury said.

Investors have taken last month's announcement of the July 4 election "firmly in their stride" due to the prospect of a Labour Party majority, Ebury said.

A Labour government is viewed as the most market-friendly outcome given the damage caused by former Conservative leader Liz Truss's fiscal plans, Labour's move to the political centre, the limited room for fiscal manoeuvre, and Labour's promise of no increases to income tax and national insurance, it added.


The massive stock of U.S. sovereign debt relative to GDP hanging over advanced economies should eventually cause yield curves to steepen as investors continue to demand more compensation for holding longer-dated bonds, Pimco said.

"There is evidence--for example, forward inflation-indexed yields or estimates of the Treasury term premium--to suggest that markets have already priced in some of this adjustment, even before central banks start to cut rates," it said.

A slowdown in the U.S. economy could cause yields to fall, with rate-cut expectations prompting shorter-dated yields to fall the most, leading the yield curve--which is currently inverted--to steepen. The curve may also steepen on heavy supply, Pimco added.


Oil prices edged higher but remained under pressure amid bearish sentiment in the market following OPEC+'s decision to gradually phase out voluntary output cuts and a reported build in U.S. crude inventories.

According to ING, the scale of the oil selloff is overdone. "While the market has been disappointed that OPEC+ will gradually unwind cuts, it is important to remember that this is only from October."

"Our balance sheet continues to show a tightening in the oil market over the third quarter."

Meanwhile, reports citing data from the American Petroleum Institute said U.S. crude oil stocks and gasoline and distillate inventories rose in the week ended May 31, adding to concerns over demand in the top consumer.

Commerzbank said the oil market doesn't appear convinced by the production decisions made recently by OPEC+.

The recent oil price weakness suggests that "market participants doubt that OPEC+ will be able to gradually reduce its voluntary production cuts without risking oversupply."

OPEC+ appear to be counting on a significant revival in oil demand, but if the voluntary production cuts are withdrawn as announced, there will be a noticeable oversupply next year based on the IEA's forecasts, it added. "How demand for oil will develop in the coming quarters is therefore likely to be crucial."


Base metals were lower with gold rising slightly, as investors await Friday's nonfarm payroll data, which should provide some clarity around the Fed's pathway to monetary policy easing.

Copper fell slightly, leading the way for other base metals lower, Sucden Financial said.

Copper is testing the $10,000 a ton boundary on a building appetite for lower prices and higher LME stocks, but it isn't slipping significantly as caution remains about the future path of prices, it added.


Macroeconomic concerns and geopolitical risks are expected to help push gold prices to $2,800/ounce over the next two years, according to UBS.

"This puts us circa 10% above forward gold prices and up to 37% above lagging consensus estimates," it said, arguing a structural shift in prices is underway.

UBS lifted its 2025 gold-price forecast by 21% to $2,700/oz and its 2026 projection by 34% to $2,775/oz. Its 2027 forecast was raised by 30% to $2,600/oz and the bank now expects a long-term real price of $1,950/oz, 11% higher than previously envisaged.


Elon Musk Confirms Diverting Nvidia AI Chips Away From Tesla

Elon Musk confirmed that many Nvidia chips initially intended for Tesla's electric-vehicle production were diverted to X due to logistical challenges.

"Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse," the Tesla chief executive said in a post on X on Tuesday.

TSMC-Backed Vanguard Plans $7.8 Billion JV to Build Chip Plant

Vanguard International Semiconductor and NXP Semiconductors plan to build a $7.8 billion chip manufacturing plant in Singapore to meet growing demand in the region.

Taiwan-based Vanguard, which is partially owned by Taiwan Semiconductor Manufacturing Co., and Dutch chip maker NXP will set up a joint venture and build a new 300 mm semiconductor wafer manufacturing facility in Singapore, the two companies said Wednesday in a statement. Construction is slated to start in the second half of 2024.

Dollar Tree Explores Sale of Family Dollar

Dollar Tree is working with financial advisers to conduct a strategic review of its Family Dollar business.

X CEO Linda Yaccarino Loses Top Lieutenant

X Corp. Chief Executive Linda Yaccarino's right-hand man and head of business operations, Joe Benarroch, is leaving the company, according to people familiar with the matter.

Benarroch has been one of Yaccarino's most trusted advisers for years. The two previously worked together at Comcast's NBCUniversal, where Yaccarino oversaw the media giant's ad business. Soon after Yaccarino joined the social-media platform-then known as Twitter-in 2023, she tapped Benarroch to be part of her team.

New Texas Stock Exchange Takes Aim at New York's Dominance

A group backed by Wall Street heavyweights BlackRock and Citadel Securities is planning to start a new national stock exchange in Texas, aiming to take on what they see as onerous regulation at the New York Stock Exchange and Nasdaq.

The Texas Stock Exchange, which has raised approximately $120 million from individuals and large investment firms, plans to file registration documents with the Securities and Exchange Commission later this year, CEO James Lee told The Wall Street Journal. The goal is to begin facilitating trades in 2025 and host its first listing in 2026.

U.S. and Europe Are on the Same Economic Track After All

The U.S. economy grew more rapidly than its eurozone counterpart last year. But the two are converging, and central bank policy is likely to follow.

The U.S., which opened up faster than other countries from lockdown during the coronavirus outbreak and provided more financial support for households, quickly recovered from the knock to growth caused by the pandemic and delivered a surprisingly strong expansion in 2023.

For Lawmakers Along the Southern Border, Immigration Policy Hits Home

SUNLAND PARK, N.M.-A small piece of America's border troubles played out last week on the path to a 29-foot mountaintop statue of Jesus.

Democratic Rep. Gabe Vasquez, hiking up Mount Cristo Rey, pointed out the long stretch of wall along the Mexico border below. The temperature topped 97 degrees, sun reflecting off the light-colored rocks. He said this was a spot where Republicans claimed migrants were illegally crossing into the country "24/7." But no one was there. "We're on that same trail right now."

Israel and Hezbollah Move Closer to Full-Scale War

Israel and Hezbollah are moving closer to a full-scale war after months of escalating hostilities with the Lebanese militant group, adding pressure on Israel's government to secure its northern border.

Hezbollah, a U.S.-designated terrorist organization closely aligned with Iran, opened a battle front with Israel on Oct. 8, a day after the deadly Hamas-led raid inside Israel sparked the current war in Gaza.

Behind Closed Doors, Biden Shows Signs of Slipping

WASHINGTON-When President Biden met with congressional leaders in the West Wing in January to negotiate a Ukraine funding deal, he spoke so softly at times that some participants struggled to hear him, according to five people familiar with the meeting. He read from notes to make obvious points, paused for extended periods and sometimes closed his eyes for so long that some in the room wondered whether he had tuned out.

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06-05-24 0630ET