USD gains, stocks stall as markets shrug off Fed optimism [Video]

Yesterday was one of those days where we needed to fit a narrative to the market moves as the moves weren’t triggered by meaningful data or comments. Appetite in US stocks remains supported by robust earnings and Fed optimism, but the earnings expectations look somehow inflated, while the Fed optimism is fragile and data-dependent – meaning that the market could be lacking enough confidence to send these indices to fresh record highs before we have more detail on the US inflation update that is due next week. Today, investors will be closely watching the $42 billion US 10-year bond auction and listen to what the Fed’s Lisa Cook has to say.

Disney tumbled 10% after giving a weak subscriber outlook, Tesla fell nearly 4% on news that shipments from its Shanghai factory tanked 18% in April. Nvidia retreated 1.72%. Apple saw limited enthusiasm to their AI-friendly iPads.

In the FX, the US dollar rebounded on a third day as FX traders somehow shrugged off the post-FOMC optimism that was certainly overdone. The EURUSD retreated to 1.0740, the USDJPY threw itself back above the 155 level, gold remained bid above the $2300 per ounce on news that the People’s Bank of China (PBoC) continued buying gold for the 18th straight month and US oil extended losses below its 100-DMA.