June S&P 500 E-Mini futures (ESM25) are up +0.59%, and June Nasdaq 100 E-Mini futures (NQM25) are up +1.02% this morning as positive signals from the first round of U.S.-Japan trade talks boosted sentiment.

U.S. President Donald Trump said there was “big progress” in talks to secure a deal for Japan. This fueled optimism that deals can be struck to avoid higher tariffs on U.S. trading partners.

“The trajectory of U.S.-Japan trade talks will continue to be closely monitored, not just for their bilateral implications, but also as a potential framework for how the U.S. may approach trade relationships with other allies,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management.

Futures linked to the tech-heavy Nasdaq 100 outperformed as U.S. chip stocks gained ground in pre-market trading after the world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co., reported better-than-expected Q1 profit and provided an upbeat Q2 sales forecast.

Investors now look ahead to a fresh batch of U.S. economic data and an earnings report from streaming giant Netflix.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed lower. Nvidia (NVDA) sank over -6% and was the top percentage loser on the Dow after the Trump administration barred the company from selling its H20 chip in China. Also, J.B. Hunt Transport Services (JBHT) slid more than -7% and was the top percentage loser on the S&P 500 after the transportation and logistics company logged lower Q1 profit and revenue. In addition, Advanced Micro Devices (AMD) slumped over -7% and was the top percentage loser on the Nasdaq 100 after the company said it expects to face charges of up to $800 million after the U.S. government limited exports of its MI308 chip to China. On the bullish side, Travelers Cos. (TRV) rose more than +1% and was the top percentage gainer on the Dow after the insurer posted better-than-expected Q1 core EPS.

Economic data released on Wednesday showed that U.S. retail sales jumped +1.4% m/m in March, stronger than expectations of +1.3% m/m. Also, U.S. March core retail sales, which exclude motor vehicles and parts, rose +0.5% m/m, stronger than expectations of +0.4% m/m. In addition, U.S. industrial production fell -0.3% m/m in March, weaker than expectations of -0.2% m/m, while manufacturing production rose +0.3% m/m, in line with expectations.

Fed Chair Jerome Powell said on Wednesday that the central bank needs to make sure tariffs do not lead to a more persistent rise in inflation. “Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said. The Fed chair reiterated that policymakers are in no hurry to cut interest rates when he said, “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.” Also, Cleveland Fed President Beth Hammack said there is a strong rationale for policymakers to keep interest rates steady until more clarity emerges on how tariffs and other policy changes will affect the U.S. economy.

“Many had assumed that the Fed would prioritize the labor side of the mandate if forced to choose, but he suggested that price stability is necessary to maintain a healthy labor market,” said Adam Phillips, managing director of investments at EP Wealth Advisors.

U.S. rate futures have priced in an 86.5% chance of no rate change and a 13.5% chance of a 25 basis point rate cut at the May FOMC meeting.

First-quarter corporate earnings season picks up pace, and investors look forward to new reports from prominent companies today, including Netflix (NFLX), UnitedHealth Group (UNH), Charles Schwab (SCHW), and DR Horton (DHI). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year.

On the economic data front, investors will focus on the U.S. Philadelphia Fed Manufacturing Index, which is set to be released in a couple of hours. Economists, on average, forecast that the April Philly Fed manufacturing index will stand at 2.2, compared to last month’s value of 12.5.

Investors will also focus on U.S. Initial Jobless Claims data. Economists expect this figure to be 225K, compared to last week’s number of 223K.

U.S. Building Permits (preliminary) and Housing Starts data will be released today as well. Economists expect March Building Permits to be 1.450M and Housing Starts to be 1.420M, compared to the prior figures of 1.459M and 1.501M, respectively.

Meanwhile, the U.S. stock markets will be closed tomorrow in observance of Good Friday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.314%, up +0.82%.

The Euro Stoxx 50 Index is down -0.55% this morning as investors digest fresh corporate earnings reports and await the European Central Bank’s monetary policy decision. Luxury stocks underperformed on Thursday, while energy stocks gained ground. Data from the Federal Statistical Office released on Thursday showed that Germany’s annual producer prices unexpectedly fell in March. Meanwhile, investors are awaiting the ECB’s interest rate decision later in the session, with the central bank widely expected to lower the deposit rate by another 25 basis points to 2.25% as U.S. tariffs continue to threaten growth. On the trade front, optimism increased after U.S. President Donald Trump asserted “big progress” in trade talks with Japan. In corporate news, Hermes Intl (RMS.FP) fell over -2% after the Birkin bag maker posted weaker-than-expected Q1 sales. At the same time, Siemens Energy AG (ENR.D.DX) surged more than +10% after the German energy group boosted its full-year guidance.

Germany’s PPI data was released today.

The German March PPI came in at -0.7% m/m and -0.2% y/y, weaker than expectations of -0.1% m/m and +0.4% y/y. 

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.13%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.35%.

China’s Shanghai Composite Index closed slightly higher today, with investors staying alert for any new developments in U.S.-China trade tensions. Property stocks outperformed on Thursday. At the same time, automobile stocks slumped. China’s foreign ministry stated on Thursday that the country will disregard any continued attempts by the U.S. to engage in the “tariff numbers game,” following the White House’s declaration that China is subject to tariffs of up to 245% due to its retaliatory actions. Also, reports emerged that the U.S. is leveraging tariff negotiations to pressure allies to curb China’s economic influence. Ting Lu, chief China economist at Nomura, said, “U.S. and China are stuck in an unprecedented, and expensive, game of chicken, and it seems both sides are unwilling to back down,” expecting tensions to “worsen significantly.” Meanwhile, Bloomberg News reported on Wednesday that China wants the Trump administration to take several steps before agreeing to trade talks, including demonstrating more respect by curbing disparaging comments from cabinet members. In other news, Goldman Sachs noted that in an “extreme scenario” of financial decoupling between the world’s two largest economies, U.S. investors could be forced to divest roughly $800 billion of Chinese equities. In corporate news, Anhui Guofeng New Materials jumped about +10% after beginning trial production at a high-end functional polypropylene film plant. Investor focus is now on Monday’s press conference, where regulators are anticipated to unveil their plan for “expanding opening-up of the service sector.”

Japan’s Nikkei 225 Stock Index closed higher today as investors reacted positively to the initial round of trade talks between the U.S. and Japan. Heavy industry and energy stocks led the gains on Thursday. The benchmark index also got a boost from technology stocks in the final hour after TSMC posted better-than-expected Q1 profit. Data from the Ministry of Finance released on Thursday showed that Japan’s exports rose for a sixth consecutive month in March, though the growth slowed significantly as worries about U.S. President Trump’s tariffs began to impact global trade. Meanwhile, Bank of Japan Governor Kazuo Ueda told parliament on Thursday that Trump’s tariffs might impact Japan’s economy through multiple channels, including trade activity and financial market volatility. Also, BOJ board member Junko Nakagawa cautioned that U.S. trade policy represents one of the largest threats to Japan’s economic outlook. Japan’s top negotiator, Ryosei Akazawa, stated on Wednesday that the U.S. and Japan began tariff negotiations with the goal of reaching a deal as soon as possible. Akazawa added that preparations are being made for the second round of talks to be held later this month. Trump said there was “big progress” in talks to secure a deal for Japan to avoid higher tariffs. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -8.81% to 32.10.

The Japanese March Trade Balance arrived at 544.1B yen, stronger than expectations of 485.3B yen.

The Japanese March Exports stood at +3.9% y/y, weaker than expectations of +4.5% y/y.

The Japanese March Imports came in at +2.0% y/y, weaker than expectations of +3.1% y/y.

Pre-Market U.S. Stock Movers

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose over +3% in pre-market trading after the world’s biggest contract chipmaker reported better-than-expected Q1 profit and provided an upbeat Q2 sales forecast. As a result, U.S. chip stocks gained ground in pre-market trading, with Marvell Technology (MRVL), Nvidia (NVDA), and GlobalFoundries (GFS) rising more than +1%.

UnitedHealth Group (UNH) plummeted about -20% in pre-market trading after the managed care giant posted downbeat Q1 results and cut its FY25 adjusted EPS guidance.

Hertz (HTZ) surged over +16% in pre-market trading, extending yesterday’s gains after activist hedge-fund manager Bill Ackman disclosed a massive stake in the company.

Intuit (INTU) gained about +1% in pre-market trading after Scotiabank upgraded the stock to Outperform from Sector Perform with a $700 price target.

Alcoa Corp. (AA) fell more than -2% in pre-market trading after reporting weaker-than-expected Q1 revenue.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - April 17th

UnitedHealth (UNH), Netflix (NFLX), Charles Schwab (SCHW), Truist Financial Corp (TFC), DR Horton (DHI), State Street (STT), Fifth Third (FITB), Huntington Bancshares (HBAN), Regions Financial (RF), Snap-On (SNA), KeyCorp (KEY), Ally Financial Inc (ALLY), Badger Meter (BMI), Texas Capital (TCBI), Independent Bank (INDB), ManpowerGroup (MAN), Forestar (FOR), Insteel Industries (IIIN), Acme United (ACU), Hooker Furniture (HOFT).