Opening Comment — Monday, June 02, 2025
DJIA: 42,270.07, up 54.34
S&P 500: 5,911.69, down 0.48
NASDAQ: 19,113.77, down 62.10
Stocks lower ahead of PMI data
Stock futures are lower Monday morning ahead of Federal Reserve (Fed) Chair Jerome Powell’s comments at a conference in Washington. Investors are also looking forward to today’s May manufacturing purchasing managers’ index (PMI) data release from the Institute for Supply Management (ISM) and a finalized reading from S&P Global. As of 7:19 AM ET, the Dow is decreasing 0.3%, while the S&P 500 is down 0.4%. The Nasdaq 100 is falling 0.5% relative to fair value on the GLOBEX.
U.S. equities were mixed on Friday as personal income growth came in higher-than-forecasted, while personal spending growth eased as projected. The Personal Consumption Expenditures Deflator, the Fed’s preferred gauge of inflation, came in as expected month-over-month (MOM) for both the headline and core measures, showing decelerations on annual bases. The finalized reading of May consumer sentiment from the University of Michigan was revised slightly higher, following downwardly revised one- and 5-10-year inflation expectations. The Dow was up 0.1%, while the tech-heavy Nasdaq Composite fell 0.3%. The S&P 500 was little changed with eight of 11 sectors finishing in positive territory. The Consumer Staples sector was the top performer, rising 1.2%, while the Energy sector was the bottom performer, falling 0.7%.
On the data front, the finalized reading of S&P Global’s manufacturing PMI for May is expected to remain unchanged from the prior reading of 52.3. The Institute for Supply Management’s May manufacturing PMI and prices paid component are expected to come in at 49.5 and 69.0, respectively, versus the prior month’s 48.7 and 69.8, respectively. Construction spending is projected to have risen 0.2% MOM in April, versus the prior month’s decrease of 0.5%.
Across the pond, European stocks are lower in mid-day trading as the eurozone’s finalized manufacturing PMIs for May remained steady while the U.K.’s was revised higher, with both remaining in contractionary territory. Meanwhile, British house prices unexpectedly rose in May and mortgage approvals slowed in April.
Overnight in Asia, stocks were mostly lower as China’s May manufacturing PMI rose in line with expectations, remaining in contractionary territory, as the country’s non-manufacturing PMI unexpectedly declined, though continues to remain in expansionary territory. Meanwhile, South Korea’s trade surplus unexpectedly widened in May, following exports registering a smaller-than-expected drop, while imports declined more than expected. The country’s manufacturing PMI from S&P Global for May rose but remains in contractionary territory. Australia’s Melbourne Institute inflation gauge recorded a MOM decline in May.
In FOREX trading, the dollar is lower ahead of the U.S PMI data. This week, there will be central bank meetings in Canada and India, scheduled to take place on Wednesday and Friday, respectively.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 3.6% higher at $62.99/barrel as geopolitical tensions outweighed a supply hike from the Organization of the Petroleum Exporting Countries and its allies, as Saudi Arabia aims to regain market share from overproducers and U.S. shale.
In the metals complex, gold is 1.8% higher at $3,348.60/ounce following a weakening dollar.