Morning in New York: May consumer price statistics will set the course of trading

Daily review and forecast of events on the US stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Investors will have to evaluate the results of the two-day negotiations between the USA and China, which ended the day before. The parties agreed on a plan to restore the trade truce and implement the Geneva Agreement, which provides for the reduction of mutual duties. The U.S. promised to ease restrictions on exports to China of a number of technological solutions, components for airplanes, as well as certain types of semiconductors. China has pledged to accelerate supplies of rare earth metals critical to the U.S. auto and defense industries. Negotiators called the dialog frank and substantive. A draft of the agreement reached has been sent to the leaders of the two countries for approval. Despite the lack of details, the progress announced by the parties is perceived by the market as a signal to de-escalate the conflict, but the investment community is cautiously awaiting the reaction of Donald Trump and Xi Jinping.

The key event on the macroeconomic calendar today will be the publication of Consumer Price Index (CPI) data for May. The consensus expects the overall indicator to rise by 0.2% mom and the core indicator to rise by 0.3% mom. Freedom Broker's model assumes a rise in these indicators by 0.19% and 0.27%, respectively. The impact of new import duties on the May inflation statistics will be minimal: their effect will start to show up in the June reports. Of the CPI components, the transportation component deserves special attention. A short-term price increase is possible here due to higher transportation costs. The dynamics of housing prices can partially offset the pressure on overall inflation. The balance of risks on the indicator remains mixed.

Before the main session opens, Victoria's Secret (VSCO) and Chewy (CHWY) will report quarterly results. At the post-market, Oracle (ORCL) will release its results.

Futures on US stock indices are trading slightly down. We assess the balance of risks for the current session as neutral with increased volatility amid contradictory signals from trade negotiations and expected release of CPI statistics. We focus on S&P 500 movements in the range of 5960-6100 points (from -1.3% to +1% to Tuesday's closing level).

- Quotes of GitLab (GTLB) collapsed by more than 12% in the post-market following the release of its quarterly report. Although the company's revenue increased by 33%, investors were disappointed by its conservative profit forecast for the current quarter. Additional pressure on the stock came from higher operating losses and management comments about a decline in customer activity.

- The securities of GameStop (GME) fell nearly 4% amid the release of weak results for the reported quarter. The company said it acquired 4,710 bitcoins between May 3 and June 10, 2025.

- Ilon Musk announced Tesla's (TSLA) plan to launch a robotaxi service in parts of Austin on June 22. This is seen by the market as an important step in the commercialization of autonomous driving.

- General Motors (GM) announced a $4 billion investment to expand capacity at three plants in the United States. Investors saw this decision as an attempt to mitigate the effects of the White House's 25% duties on any imported cars.

June 10 trading on U.S. stock exchanges ended in the plus. S&P 500 rose by 0.55%, Nasdaq 100 rose by 0.66%, Dow Jones added 0.25%, Russell 2000 rose by 0.56%. In the focus of attention remained the securities of large technology companies. Quotes Tesla (TSLA: +5.67%) continued to recover amid Trump's statements in support of Starlink and wishing success to Musk. Alphabet (GOOGL: +1.43%) went up after reports of Google Cloud's connection to OpenAI's infrastructure as part of a strategy to diversify away from dependence on Microsoft. Ten of the 11 sectors included in the broad market index closed in the plus. Energy companies (XLE: +1.78%) were the leaders, while industrials (XLI: -0.44%) were the outsiders.

The news about the end of trade negotiations between the U.S. and China appeared after the closing of the main session, so it did not affect the dynamics of stock indices.

The NFIB's small business sentiment assessment rose from 95.8 to 98.8 points in May, exceeding forecasts and breaking a four-month decline.

The $58 billion offering of three-year tri-jeris came with a slight deviation of yields from expectations, indicating stable demand from investors ahead of more important auctions - today for the «ten-years» and tomorrow for the «thirty-years».

A separate topic was speculation around the upcoming change of the Fed's head. According to Bloomberg, Treasury Secretary Scott Bessent, former Fed Board of Governors member Kevin Warsh, National Economic Council Director Kevin Hassett, current Fed Board of Governors member Christopher Waller and former World Bank President David Malpass are among the main candidates considered for the post. The White House has denied reports of Bessent's nomination, but active discussions in the context of expected changes in monetary policy after Trump's election victory continue.

- Shares of Novo Nordisk (NVO: +5.1%) rose on FT reports of acquisition of a stake in it by activist fund Parvus seeking to influence the CEO change process. Investors saw the news as a potential impetus for changes in corporate strategy.

- The collapse of the quotations of J. M. Smucker (SJM: -15.6%) was a reaction to weak organic sales growth as well as negative earnings and free cash flow guidance for fiscal 2026. Hostess write-downs, lower inventory at retailers, and tariff risks put additional pressure on the stock.