Good morning. Stocks extended their rebound Thursday as softer inflation and slowing retail sales boosted hopes for rate cuts later this year. The S&P 500 continued its climb, posting gains for the sixth time in seven sessions and topping 5,900 intraday. Bond yields eased after peaking in the morning, helping lift interest-rate-sensitive sectors.

Trade remained relatively quiet, but the market is eyeing this weekend’s tariff negotiations with China and potential Middle East energy deals. Meanwhile, eyes turn to Washington as President Trump is expected to propose new tax cuts soon. Option expiration looms today, with a record $2.8 trillion in exposure rolling off.

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Warren Buffett’s Berkshire Hathaway cut exposure to large banks while adding to Constellation Energy, holding steady on Apple. Analysts note the move reflects cautious positioning amid rate uncertainty.
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Tech’s Tightening Grip on Washington
The WSJ reports on Silicon Valley's growing influence in U.S. policy circles as tech giants navigate AI regulation, trade issues, and antitrust scrutiny.
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Options Expiration Could Test Rally’s Strength
MarketWatch highlights how today’s record May options expiration—totaling $2.8T in exposure—could trigger volatility and challenge the market’s recent gains.
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Burry Bets Against Nvidia, Chinese Stocks
Michael Burry’s Scion Asset Management has taken new bearish positions against Nvidia and Chinese equities, raising eyebrows as markets continue to rally.
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Trump’s Iran Nuclear Deal Could Shift Oil Markets
MarketWatch explores how a potential Trump-led nuclear agreement with Iran could alter global oil supply dynamics and pressure crude prices.
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China Praises Trade Talks Progress
CNBC reports China called U.S. trade discussions “constructive” as Trump hinted at a call with President Xi, providing a boost to market sentiment.
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Investors Weigh U.S. Economy After Mixed Data
CNBC details how investors are reassessing growth expectations following softer retail sales, steady jobless claims, and falling bond yields.
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Trump Prioritizes Deals Over Rights in Saudi Policy
Bloomberg covers Trump’s latest remarks emphasizing economic partnerships over human rights issues in U.S.-Saudi relations, including AI and energy investments.
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U.S. equity markets closed mostly higher Thursday, with the S&P 500 climbing 0.7% as cooling producer inflation and weaker retail sales signaled a potential easing path for the Fed. Utilities and real estate led gains, while growth sectors like consumer discretionary lagged. Bond yields fell sharply after morning highs, with the 10-year Treasury closing at 4.45% and the 2-year slipping below 4%.

Producer price index (PPI) inflation surprised to the downside, with headline PPI falling 0.5% in April versus an expected 0.2% gain. Core PPI also contracted, reinforcing the narrative of easing inflation pressures. Retail sales grew just 0.1% in April, below forecasts, suggesting a consumer slowdown. Still, labor market data remained stable with weekly jobless claims unchanged at 229,000.

In earnings, Cisco and Walmart both topped expectations, though Walmart warned of price hikes due to tariffs. The broader Q1 earnings season remains strong, with 92% of S&P 500 companies reported and earnings growth pacing 13% year-over-year.

Markets are now digesting heavy economic data, with options expiration today expected to drive volatility. For the week, the S&P 500 is up nearly 6%, while the Nasdaq has surged 9.5% month-to-date on renewed AI momentum.

Markets are pressing higher on softer inflation and resilient earnings, even as consumer spending shows signs of cooling. Tariff de-escalation talks and today’s options expiration will likely set the tone into next week. With bond yields easing, rotation into defensive sectors has accelerated, but tech and AI momentum remains strong. Near-term volatility remains a risk, but fundamentals continue to support a constructive view on equities through 2025.