Pre-Market Analysis 11 May 2025

Market Overview and Sentiment News

U.S. stock futures rose sharply ahead of the cash session after Reuters reported that negotiators had made “substantial progress” in U.S.-China trade talks in Geneva, lifting S&P 500 futures by 1.1% and Nasdaq-100 futures by 1.4%. Investors welcomed the “constructive and candid” tone from both sides as Chinese Vice Premier He Lifeng and Treasury Secretary Scott Bessent agreed to launch a new economic dialogue forum to address lingering tariff disputes. Market attention now turns to April’s CPI and PPI data due at 8:30 AM ET, expected to show a 0.3% month-over-month rise in consumer prices and a 0.1% gain in producer costs, which could shape Fed rate outlooks. Bond markets reflected the growing risk appetite, with the 10-year Treasury yield easing four basis points to 3.87% amid positioning for potential Fed guidance post-inflation prints. Commodity futures were mixed: gold extended gains to a six-week high on safe-haven demand, while WTI crude oil jumped over 2% to $61.10 per barrel amid optimism around reduced tariffs. Sector rotation was evident in U.S. equity futures, as technology paused on mixed earnings outlooks, but energy and financial contracts outperformed on rising oil prices and steeper curves. Asian stocks closed higher—Shanghai Composite up 0.5% on easing export tariffs—while European futures were mixed, with FTSE futures up 0.2% and DAX futures down 0.1% amid divergent PMI readings. Market breadth remained positive, with NYSE advancers outnumbering decliners by 1.2-to-1, and the U.S. dollar index strengthened to 104.05 on rate differentials and improved risk sentiment. Traders are advised to monitor VWAP and 20-period EMA levels for intraday bias and to size positions prudently ahead of today’s data-driven volatility risks.

Technical Analysis Insight

• ES (E-mini S&P 500 futures): Trading near 5,754 with 1-hour RSI ~68 and a recent bullish MACD cross; price is above the 20- and 50-period EMAs, suggesting continuation toward 5,780 if momentum holds.
• NQ (E-mini NASDAQ 100 futures): Currently around 20,503, with 1-hour RSI ~71 signaling overbought conditions but MACD histogram expanding, pointing to sustained tech strength—watch for a pullback to the 20 EMA near 20,450 as support.
• RTY (E-mini Russell 2000 futures): Sitting at 2,067, 1-hour RSI ~72 indicates heavy buying; price has cleared the 1,970 pivot and is riding the 20 EMA—expect a test of 2,090 resistance with corrective dips to the 50 EMA near 2,040.
• YM (E-mini Dow futures): Holding 41,750, 1-hour RSI ~63 and MACD rising above signal line; price is above both EMAs and VWAP, suggesting a bullish bias targeting 42,000, with intraday support at 41,600.

Technical Summary: Equity futures across ES, NQ, RTY, and YM are exhibiting strong upward momentum into Monday, driven by bullish MACD crossings and RSI readings above 60. While NQ and RTY show overbought signals, pullbacks to respective 20- or 50-period EMAs offer favorable re-entry points. Key levels to watch are ES 5,780, NQ 20,550, RTY 2,090, and YM 42,000 for continuation setups, with stops placed just below the EMAs to manage risk.

Foundational Analysis

Heading into Monday’s open, equity futures are driven by a mix of macroeconomic data, corporate earnings, and monetary policy expectations. Here’s the foundational backdrop for each contract:

• ES (E-mini S&P 500 futures): S&P 500 companies are reporting mixed Q1 earnings, with technology and consumer discretionary names showing stronger-than-expected revenue growth, while financials face margin pressure from rising interest rates. April’s ISM Manufacturing index came in at 55.4, signaling continued expansion and supporting broad market sentiment.
• NQ (E-mini NASDAQ 100 futures): Tech-heavy NASDAQ faces headwinds from higher bond yields, but continued AI-driven capex from major firms underpins a bullish narrative. U.S. nonfarm payrolls on Friday showed 275,000 jobs added, reinforcing Fed tightening odds yet sustaining tech sector earnings outlook.
• RTY (E-mini Russell 2000 futures): Small-cap stocks have lagged larger peers due to their higher sensitivity to domestic economic growth and tighter financial conditions. However, positive retail sales data for April (+0.9% MoM) and strong small-business sentiment surveys suggest potential catch-up in small-cap performance.
• YM (E-mini Dow futures): Industrials and financial blue-chips in the Dow are benefiting from infrastructure spending forecasts and higher yield curves. March durable goods orders surprised to the upside (+1.2% MoM), adding momentum to cyclicals and underpinning Dow futures strength.

Overall, supportive economic readings and resilient corporate results should provide a tailwind to equity futures, though near-term volatility may spike around key data releases and Fed speakers.

Upcoming Economic Events

• Tuesday, May 13 — Consumer Price Index (CPI):Bullish if CPI is at or below 0.3% MoM, signaling easing inflation pressures; Bearish if CPI exceeds 0.3%, pressuring equity futures.
• Wednesday, May 14 — Producer Price Index (PPI):Bullish if PPI is at or below 0.1%, indicating contained wholesale costs; Bearish if PPI surpasses expectations, signaling upstream inflationary pressure.
• Wednesday, May 14 — FOMC Minutes:Bullish if minutes reveal dovish commentary or caution on further rate hikes; Bearish if minutes emphasize a hawkish bias, reinforcing a tightening outlook.
• Thursday, May 15 — Retail Sales:Bullish if April retail sales exceed +0.9% MoM, reflecting robust consumer demand; Bearish if below consensus, suggesting slowing spending.
• Thursday, May 15 — U. of Michigan Consumer Sentiment:Bullish if May survey beats expectations, indicating confident consumers; Bearish if it misses, pointing to a weaker spending outlook.
• Friday, May 16 — Housing Starts & Industrial Production:Bullish if housing starts top 1.38 M and industrial production rises > 0.2%, signaling economic strength; Bearish if below forecasts, indicating cooling activity.

Traders should monitor these events for increased volatility and directional cues in ES, NQ, RTY, and YM futures heading into next week.

Key Takeaways

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