The Day Ahead: Can Markets Steady Today as Budget and Yield Fears Persist?

Market Overview

U.S. equity futures are edging higher early Thursday following a sharp sell-off in the prior session. S&P 500 and Nasdaq 100 futures are up 0.14% and 0.18% respectively, while Dow futures are flat.

Wednesday’s session saw heavy downside pressure, with the Dow shedding over 800 points and the S&P 500 dropping 1.6% as Treasury yields spiked on renewed deficit concerns. The driver remains the contentious U.S. budget bill, now stalled due to internal GOP divisions over SALT deductions.

The budget bill’s potential to add trillions to the national deficit stoked fears of resurgent inflation, pushing yields to multi-month highs. This macro backdrop continues to weigh on sentiment and is the key risk catalyst into today’s session.

Key Economic Releases

Traders will be closely watching several economic reports due Thursday:

• Weekly jobless claims (Week ending May 17) – 12:30 GMT
• S&P Global Flash Manufacturing PMI (May) – 13:45 GMT
• S&P Global Flash Services PMI (May) – 13:45 GMT
• Existing Home Sales (April) – 14:00 GMT

The PMI prints are particularly relevant as traders assess the impact of tariffs and rising rates on economic resilience. Jobless claims will also provide an updated read on labor market tightness.

Notable Earnings

Before the bell, watch for:

• Ralph Lauren (RL) – Expected EPS: $2.02
• Analog Devices (ADI) – Expected EPS: $1.69
• BJ’s Wholesale (BJ) – Expected EPS: $0.92

After the bell, key reports include:

• Intuit (INTU) – Expected EPS: $10.90
• Workday (WDAY) – Expected EPS: $2.01
• Ross Stores (ROST) – Expected EPS: $1.44

These names could influence both consumer discretionary and tech sentiment, with INTU and WDAY especially in focus for Nasdaq-watchers.

Central Bank Activity

At 18:00 GMT, New York Fed President John Williams is scheduled to speak. Markets will be listening for any commentary on inflation and deficit implications for future rate policy. With bond markets jittery, even indirect Fed signals could move yields and risk assets.

Commodities, Crypto, and Bonds

Gold rallied to a two-week high at $3,340.53, supported by a weaker dollar and defensive flows amid debt concerns.

Meanwhile, Bitcoin surged past $111,000, hitting a fresh record as institutional interest and favorable U.S. regulatory signals offset equity market stress.

Yields remain elevated: the 10-year trades at 4.59% and the 30-year has breached 5.09%, a level not seen since October 2023. Soft demand in Wednesday’s 20-year auction underscored fading appetite for U.S. debt.

Technical Outlook

The S&P 500 futures chart shows price action pulling back from the recent 5,993.50 high, now hovering near 5,868, just below the 200-day SMA at 5,885.71. The short-term support zone lies near 5,837.25, followed by a deeper pivot at 5,611.2 (50-day SMA). Rejection at the 200-day may signal a deeper retracement, while reclaiming 5,993.50 would open the door to the 6,236.50 resistance.

Outlook

Today’s session hinges on debt-ceiling rhetoric, Treasury yield moves, and key macro prints. With resistance from yields, fragile sentiment, and major earnings still ahead, markets may remain reactive and headline-driven. Traders should watch for yield stabilization and any shift in budget bill negotiations.

More Information in our Economic Calendar.