Futures Indices
Dow Futures: -0.1%
S&P 500 Futures: -0.1%
Nasdaq 100 Futures: -0.1%
US 10-Year Yield: 4.49% (+1 bp)
Inflation in the spotlight! While waiting for CPI figures and a Sino-American trade deal, markets are moving cautiously, despite the excitement sparked by Jensen Huang’s comments on quantum.
Market Environment
US indices are taking a breather this Wednesday as investors wait for the key inflation (CPI) report and clarifications on the US-China trade deal.
Why is this important?
The CPI numbers expected today will directly influence expectations regarding Fed monetary policy. Consensus forecasts a 0.2% increase in May (same as April), or 2.5% year-on-year. A surprise could reignite volatility.
As for China, both powers have agreed in principle to renew a trade truce and possibly lift restrictions on rare earths. But the market remains skeptical due to the lack of details.
"There may be some disappointment this morning as we do not yet have a more ambitious announcement," notes Jim Reid (Deutsche Bank).
Also noteworthy:
The federal appeals court upholds the tariffs imposed by Donald Trump.
UBS warns of declining quality in inflation data compiled by the Bureau of Labor Statistics.
Stocks to Watch
Quantum Computing Stocks Up
Following enthusiastic statements from Jensen Huang (Nvidia CEO) about a “tipping point” in the quantum sector:
- Quantum Computing Inc. (QUBT): +8.3%
- Rigetti Computing (RGTI): +4.5%
- IonQ (IONQ): +3.6%
- Arqit Quantum (ARQQ): +2.7%
- D-Wave Quantum (QBTS): +2.7%
Chewy (CHWY): -7.2%
Despite better-than-expected Q1 results, cautious annual forecasts weighed on the stock.
Etsy (ETSY): -3.7%
The group announced the issuance of $650M in convertible bonds, part of which will be used for share buybacks.
Rating Changes
Upgrades
- Micron Technology (MU) → Raised to hold (GF Securities), target raised from $74 to $116
- MongoDB (MDB) → Raised to buy (Daiwa), target from $202 to $275
- Insmed (INSM) → Maintained at outperform (Evercore), target from $90 to $110
- RTX Corporation (RTX) → Maintained at buy (Vertical Research), target from $127 to $153
Neutral
- Hexcel (HXL) → Maintained at hold (Vertical Research), target from $50 to $62
- DocuSign (DOCU) → Maintained at outperform (Daiwa), but target lowered from $108 to $85
- GitLab (GTLB) → Maintained at buy (BTIG), target reduced from $86 to $67
- Palantir (PLTR) → Maintained at underperform (Mizuho), target raised from $94 to $116
- Casey's General Stores (CASY) → Maintained at buy (Deutsche Bank), target from $452 to $561
Downgrades
- Arista Networks (ANET) → Downgraded to neutral (BNP Paribas Exane), target reduced from $109 to $106
- Bill Holdings (BILL) → Downgraded to equalweight (Morgan Stanley), target from $60 to $55
- Etsy (ETSY) → Downgraded to sell (Arete Research), but target raised from $40 to $43
Conclusion & Key Events
To watch today:
- US Consumer Price Index (CPI) release at 2:30pm
- Possible developments in the US-China trade deal
- Monitoring US long-term rates (10Y at 4.49%)
Expected volatility in:
- Tech sector (CPI + monetary policy expectations)
- Consumer stocks (CPI + tariffs)
- Quantum sector (bullish momentum from Nvidia comments)
To register
Have a great session everyone
Sylvain Mouilhaud: Equity Coach
