Stocks closed lower yesterday, retaining the majority of the sharp gains made on Tuesday.

As you know, stocks soared on Tuesday after President Trump said he would extend the deadline for a trade deal with the EU until July 9^th, rather than June 1^st. That reversed concerns from last Friday when President Trump said he was "recommending a straight 50% tariff on the European Union," citing that he was not happy with how talks were going. But over the weekend, the President of the European Commission, Ursula von der Leyen, phoned President Trump and asked for an extension saying, "to reach a good deal, we would need the time until July 9." The President obliged and stocks soared on the news.

President Trump, on Friday, also said he was considering a 25% tariff on iPhones not made in the U.S. No word on if that will be rescinded or modified.

Stocks traded in a relatively narrow range for most of the day yesterday, waiting for Nvidia's after-market earnings.

After the close, they posted a negative EPS surprise of -4.71%, and a positive sales surprise of 2.67%. That translated to a quarterly EPS growth rate of 39.7% vs. this time last year, and a sales growth of 69.2%. They noted that data center revenue was up 10% from last quarter and 73% from last year at this time. They were off -0.51% in the regular session before earnings, but were up 5% in after-hours trading following earnings.

Today we'll hear from retailers Best Buy, Kohl's and Burlington Stores before the open, and Costco and Ulta Beauty after the close.

In other news yesterday, it was reported that President Trump told U.S. companies that sell software used to make semiconductors to stop selling to China. This builds on restrictions imposed in 2022 that limited chip software sold in China.

Yesterday's MBA Mortgage Applications were down by -1.2% w/w with purchases up 2.7% and refi's down -7.1%.

And the Richmond Fed Manufacturing Index improved to -9 vs. last month's -13.

We also got the FOMC Minutes from their last meeting on May 6-7. Nothing that we didn't already know. The Fed continued to express concerns that tariffs could raise inflation. The Minutes said, "almost all participants commented on the risk that inflation could prove to be more persistent than expected." They also worried over the risk of recession.

For now, according to the latest reports, inflation continues to tick lower. The labor market has been strong. The economy has been resilient. And earnings continue to impress.

The next FOMC meeting is scheduled for June 17-18. At the moment, the CME's FedWatch tool has only a 2.2% likelihood of a rate cut. You have to go all the way out to the September 17 meeting (bypassing July's meeting), until you get a >50% probability of a rate cut (September currently stands at 58.7%).

On today's economic report docket, we'll get Weekly Jobless Claims, the Corporate Profits report, the Pending Homes Sales Index, and the second estimate for Q1 GDP (consensus is for no change from the first estimate of -0.3%).

We'll also hear from Fed policymakers Thomas Barkin, Austan Goolsbee, Adriana Kugler, Mary Daly and Lorie Logan as they speak at their respective engagements throughout the day.

We're 2 days into the week with 2 more days to go. But all of the indexes are in the green for the week, so far.

And little bit of good news either on tariffs, or the economy, or earnings could help keep it that way.

See you tomorrow,