Stock Market Update

U.S. equity futures trade lower across the board after Moody's announced a downgrade to the U.S. credit rating (to Aa1 from Aaa) on Friday evening. The S&P 500 futures trade 70 points below fair value.

The downgrade from Moody's is returning the spotlight to the U.S. fiscal standing, though Treasury Secretary Bessent downplayed the significance of the move, saying that ratings actions are a lagging indicator.

U.S. Treasuries are starting the week on a lower note with longer tenors leading the weakness. The 10-yr yield is up 12 basis points at 4.56% while the 2-yr yield is up five basis points at 4.03%.

Today's economic data will be limited to the 10:00 ET release of April Leading Indicators (Briefing.com consensus -0.7%; prior -0.7%).

In corporate news:

• UnitedHealth (UNH 308.36, +16.45, +5.6%): showing early strength after recent weakness. TD Cowen downgraded the stock to Hold from Buy with a $308 target.
• NVIDIA (NVDA 131.46, -3.94, -2.9%): CEO Huang delivered keynote speech at Computex 2025 in Taiwan.
• CoreWeave (CRVW 76.80, -3.50, -4.4%): company intends to offer $1.50 bln of senior notes due 2030 in a private offering.
• Alibaba (BABA 120.89, -2.57, -2.1%): Trump administration looking into possibility that the company's AI will be used by Apple (AAPL 208.00, -3.26, -1.5%) iPhones.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly lower note. Japan's Nikkei -0.7%, Hong Kong's Hang Seng -0.1%, China's Shanghai Composite UNCH.
  • In economic data:
    • China's April Industrial Production 6.1% yr/yr (expected 5.7%; last 7.7%), April Retail Sales 5.1% yr/yr (expected 6.0%; last 5.9%), and April Fixed Asset Investment 4.0% yr/yr (expected 4.4%; last 4.2%). April House Prices -4.0% yr/yr (last -4.5%) and April Unemployment Rate 5.1% (expected 5.2%; last 5.2%)
    • New Zealand's Q1 Input PPI 2.9% qtr/qtr (expected 0.2%; last -0.9%) and Output PPI 2.1% qtr/qtr (expected 0.1%; last -0.1%)
  • In news:
    • There was some speculation that the People's Bank of China could lower its loan prime rate tomorrow.
    • Japan's Prime Minister Ishiba repeated that current tariff levels are unacceptable and that he is looking for a "win-win" trade agreement with the U.S. The comments were made ahead of this week's visit to Washington by Japan's top trade negotiator.
• Major European indices trade on a lower note. STOXX Europe 600 -0.6%, Germany's DAX -0.1%, U.K.'s FTSE -0.6%, France's CAC -0.7%.
  • In economic data:
    • Eurozone's April CPI 0.6% m/m, as expected (last 0.6%); 2.2% yr/yr, as expected (last 2.2%). April Core CPI 1.0% m/m, as expected (last 1.0%); 2.7% yr/yr, as expected (last 2.4%)
    • Spain's March trade deficit EUR5.48 bln (last deficit of EUR3.42 bln)
  • In news:
    • The European Commission lowered its 2025 growth forecast for the eurozone to 0.9% from 1.3% while the outlook for 2026 was cut to 1.4% from 1.6%.