Tariff Tensions & Oil Jolt: Your June 02 Equity Futures Playbook
Market Overview and Sentiment News
- Tariff Resurgence Spooks Futures: U.S. stock index futures slipped as President Trump announced a doubling of steel and aluminum tariffs to 50% starting Wednesday, reigniting trade-war fears amid recent optimism over moderating tariffs.
- Tech Sector Mixed Signals: While Nvidia and Tesla initially gained on strong earnings, broader large-cap and growth stocks faced profit-taking pressures after tariff announcements, adding to choppy session risks for ES and NQ.
- Oil Prices Spike Despite Production Hike: West Texas Intermediate jumped over 3% despite OPEC+ increasing output by 411,000 barrels per day for July, as geopolitical concerns, including Ukraine tensions, continue to override supply expectations and lift energy-linked equity futures.
- Bond Yields & Dollar Reaction: U.S. 10-year Treasury yields eased to 3.45% after the tariff news sent the dollar lower, offering relief for rate-sensitive sectors like RTY and YM.
- Fed Speeches & Data on Watch: Investors are closely watching upcoming Fed speeches by Logan and Goolsbee, along with key manufacturing PMI readings and Friday’s nonfarm payrolls, to gauge policy direction and manage two-way volatility.
Impact: Renewed tariff uncertainty and an oil-driven rally have created a choppy premarket environment for equity futures. Traders should anticipate sharp intraday swings—leaning into disciplined VWAP-based entries on both sides while closely monitoring Fed commentary and economic releases for directional cues.
Technical Analysis Insight
Data as of 07:00 AM ET on June 02, 2025
- YM (E-mini Dow Jones 30): Price extended up near 42,175 before retracing to around 42,090, where it has been holding just above the VWAP line (~42,092). The MACD histogram is contracting and the RSI sits near 50, indicating momentum is slowing. For today’s session, consider looking for disciplined long entries on a clean bounce above VWAP, placing protective stops just beneath 42,050.
- ES (E-mini S&P 500): After a brief run to approximately 5,898, ES pulled back to roughly 5,884 and is consolidating near the VWAP (~5,886). The fading MACD swing and an RSI reading near 51 suggest upside follow-through may be limited until buyers step in decisively. Lean toward buying dips into VWAP support, with stops under 5,880 to contain risk.
- NQ (E-mini NASDAQ 100): NQ spiked to about 21,280 before fading back to VWAP territory at roughly 21,220 (VWAP ~21,224). The MACD is contracting and RSI is sitting near 54, signaling that the recent rally is losing some steam. Target long entries on a clean rebound off VWAP, using tight stops below 21,200 to manage risk.
- RTY (E-mini Russell 2000): RTY pushed up toward ~2,070 and then slipped back to around 2,057, now hovering at VWAP (~2,058). The MACD remains above zero but is flattening, while RSI is near 52—suggesting momentum is moderating. A practical approach is to look for fade entries into VWAP support, with stops just under 2,055.
Today’s Technical Take: Early-session rallies across the board were met with selling that brought prices back to VWAP. With momentum indicators cooling on YM, ES, NQ, and RTY, the high-probability edge is to trade disciplined bounces off VWAP—or fade into VWAP if price runs ahead of itself. In all cases, keep stops snug and lean into clear directional confirmation before sizing up.
Foundational Analysis
- Resurgent Trade Risks: The reimposition of higher steel and aluminum tariffs intensifies U.S.-China tensions and elevates global trade-war concerns, potentially pressuring cyclical and industrial sectors.
- Fed Policy Uncertainty: With Fed officials speaking this week and key PMI data due, uncertainty over the Fed’s next move persists—higher Treasury demand could cap yield spikes, influencing equity futures’ two-way volatility.
- Energy Complex Influence: A 3% jump in oil prices—despite OPEC+ production hikes—underscores the impact of geopolitical supply risks (Ukraine); higher energy prices may support energy equities but add cost pressures for other sectors.
- Tech Earnings Divergence: Mixed results from mega-cap tech show bright spots (AI earnings beats) but also profit-taking from elevated valuations; this divergence can drive sector-specific rotations in NQ and ES.
- Market Structure & Sentiment: VWAP and volume-profile levels remain critical anchors amid heightened volatility, as traders seek to gauge short-term directional bias against key technical thresholds.
Economic and Trading Events This Week
| Event | Details | Buy Scenario | Sell Scenario |
|---|---|---|---|
| Monday 09:45 AM ET – S&P Global Manufacturing PMI Final (May) | Consensus 52.3 (Prior 50.2). Measures the final manufacturing activity level. | Print above 52.3 – constructive for ES & NQ, look for long entries on dips into VWAP. | Print below 52.3 – likely fade early ES & NQ rallies, consider short into resistance. |
| Monday 10:00 AM ET – ISM Manufacturing PMI (May) | Consensus 49.0 (Prior 48.7). A sub-50 print indicates contraction in U.S. manufacturing. | Print above 49.0 – signals stabilization, buy YM & ES dips into VWAP support. | Print below 49.0 – signals further contraction, sell rallies in YM & ES. |
| Monday 10:00 AM ET – Construction Spending MoM (Apr) | Consensus +0.1% (Prior –0.5%). Reflects monthly change in total construction outlays. | Print above +0.1% – supports cyclical sectors, buy YM & ES on dips toward VWAP. | Print below 0% – hints at weakness, sell ES & YM on early strength. |
| Monday 10:00 AM ET – ISM New Orders (May) | Consensus 48.0 (Prior 47.2). Tracks incoming orders and future manufacturing demand. | Print above 48.0 – indicates firming demand, buy ES & RTY dips into VWAP. | Print below 48.0 – signals softening demand, sell ES & RTY rallies. |
| Monday 10:00 AM ET – ISM Manufacturing Prices (May) | Consensus 71.0 (Prior 69.8). Measures input price pressures for manufacturing. | Print below 71.0 – eases inflation concerns, buy YM & RTY on dips. | Print above 71.0 – raises inflation fears, sell NQ & ES on rallies. |
| Monday 10:15 AM ET & 12:45 PM ET – Fed Speeches (Logan, Goolsbee) | Speeches for potential clues on Fed policy. Look for hawkish/dovish tone. | Dovish tone – buy RTY & YM dips into VWAP. | Hawkish tone – sell ES & NQ on strength beyond Bollinger Bands. |
| Monday 11:30 AM ET – 3-Month & 6-Month Bill Auctions | Measures Treasury demand. Lower yields indicate strong demand. | Strong auction (lower yields) – buy futures on dips, especially YM & ES. | Weak auction (higher yields) – sell rallies in rate-sensitive futures. |
| Tuesday 08:55 AM ET – Redbook YoY (week ending May 31) | Tracks retail sales growth on a YoY basis. | Print above +6.1% – strong consumer demand, buy consumer-linked futures (e.g., ES, RTY) on dips. | Print below +6.1% – weak retail trends, sell ES & RTY rallies. |
| Tuesday 10:00 AM ET – JOLTs Job Openings (Apr) | Consensus 7.05M (Prior 7.192M). Gauges labor market tightness. | Print above 7.05M – tight labor market, buy ES & YM on dips (risk-on). | Print below 7.05M – easing labor tightness, sell futures on rallies (risk-off). |
| Tuesday 10:00 AM ET – Factory Orders MoM (Apr) | Consensus –2.2% (Prior +3.4%). Reflects change in factory orders. | Print above –2.2% – better-than-expected, buy YM & ES dips. | Print below –2.2% – signals manufacturing softness, sell YM & ES rallies. |
| Tuesday 10:00 AM ET – Factory Orders ex Transportation MoM (Apr) | Consensus +0.3% (Prior –0.4%). Strips volatile transportation orders. | Print above +0.3% – underlying demand firm, buy futures on dips (ES, YM). | Print below +0.3% – underlying weakness, sell rallies (ES, YM). |
| Tuesday 10:10 AM ET – RCM/TIPP Economic Optimism Index (June) | Consensus 48.3 (Prior 47.9). Gauges consumer/business outlook. | Print above 48.3 – improved sentiment, buy ES & NQ on dips. | Print below 48.3 – souring sentiment, sell rallies (ES, NQ). |
| Tuesday 04:30 PM ET – API Crude Oil Stock Change (week ending May 30) | Expected draw > –4.236M barrels. Larger draws tighten supply. | Actual draw > –4.236M – bullish energy complex, buy energy-linked futures (CL) and RTY energy names on dips. | Actual build or smaller draw – bearish energy, sell energy-linked futures (CL) and RTY energy on rallies. |
| Wednesday 08:15 AM ET – ADP Employment Change (May) | Consensus +70K (Prior +62K). Private payrolls indicator. | Print above 70K – stronger jobs, buy equity futures (ES, YM) on dips. | Print below 70K – weaker jobs, sell futures on rallies (ES, YM). |
| Wednesday 08:30 AM ET – Fed Bostic Speech | Comments on policy outlook; watch for rate-path clues. | Dovish tone – buy rate-sensitive futures (RTY, YM) on dips. | Hawkish tone – sell ES & NQ on strength. |
| Wednesday 09:45 AM ET – S&P Global Composite & Services PMI Final (May) | Composite consensus 52.1 (Prior 50.6); Services consensus 52.3 (Prior 50.8). | Both prints above consensus – buy ES & NQ on dips for continuation. | Either print below consensus – sell ES & NQ rallies. |
| Wednesday 10:00 AM ET – ISM Services PMI (May) | Consensus 52.0 (Prior 51.6). Measures service sector activity. | Print above 52.0 – buy ES & NQ dips into VWAP. | Print below 52.0 – sell ES & NQ rallies. |
| Wednesday 10:30 AM ET – EIA Crude Oil Stocks Change (week ending May 30) | Monitor for large draws vs. builds in crude inventories. | Draw larger than expected – buy CL and energy-linked futures on dips; may lift broader equity futures. | Build or smaller draw – sell CL and energy futures; may pressure equity futures on rallies. |
| Wednesday 02:00 PM ET – Fed Beige Book Release | Regional Fed insights on economic conditions. | Dovish commentary – buy ES & YM on dips. | Hawkish commentary – sell ES & YM on strength. |
| Thursday 07:30 AM ET – Challenger Job Cuts (May) | Consensus 120K (Prior 105.441K). Tracks announced layoffs. | Print below 120K – labor market resilient, buy equity futures on dips. | Print above 120K – rising layoffs, sell ES & RTY rallies. |
| Thursday 08:30 AM ET – Balance of Trade (Apr) | Consensus –$66.6B (Prior –$140.5B). Measures net exports. | Smaller deficit (better than –$66.6B) – buy ES & YM on dips. | Larger deficit (worse than –$66.6B) – sell ES & YM on strength. |
Today's Strategy for Scalpers and What to Watch For
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- Tariff-Driven Fade Entries: Fade early spikes in YM and ES on tariff headlines—target 2–4 tick retracements into VWAP support for low-risk long entries.
- Oil-Linked Scalps: With oil up over 3%, look for energy futures strength (CL) to influence sector ETFs; consider short-term long scalps in RTY energy names on VWAP pullbacks.
- Tech Micro-Reversals: Scalping NQ on short-term mean reversion after earnings-driven swings; use tight stops just beyond VWAP and mid-Bollinger lines.
- Fed Reaction Trades: Monitor Logan and Goolsbee speeches—be ready to fade any knee-jerk moves beyond Bollinger Bands, especially in ES and YM.
What Could Happen After Market Open
- Early Sell-Off into VWAP: Tariff news may trigger an immediate drop in YM and ES toward VWAP levels—watch 42,092 on YM and 5,886 on ES as potential pivot points.
- Oil-Fueled Energy Surge: Energy contracts may rally with delayed follow-through, potentially pulling broader equity futures higher if oil-driven risk appetite holds.
- Tech Follow-Through Check: If NQ fails to hold above VWAP around 21,224, further profit-taking may surface; conversely, a clean VWAP reclaim could fuel momentum into mid-morning.
- Fed Speech Volatility: Any hawkish remarks from Logan or Goolsbee could spark quick reversals; use midline Bollinger Band on ES as a reference for stop placement.
Summary
Today’s session opens with tariffs back in focus as President Trump’s announcement to double steel and aluminum rates to 50% rekindles trade-war fears and drags futures lower toward VWAP support. Oil’s unexpected 3% surge—despite OPEC+ production hikes—adds fuel to energy-linked equity futures, creating a bifurcated market where cyclical and tech sectors may diverge. Bond yields eased as the dollar softened, offering relief for rate-sensitive YM and RTY; however, Fed speeches by Logan and Goolsbee and key PMI data remain critical catalysts for two-sided volatility. Traders should anchor entries to VWAP and volume-profile levels, fade knee-jerk moves beyond Bollinger Bands, and maintain tight risk controls—remaining nimble around Fed commentary and economic releases to capture short-term scalping opportunities.
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