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Exchange-Traded Funds, Equity Futures Rise Pre-Bell Tuesday Amid Renewed Hopes Around Middle East Peace Deal

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The broad market exchange-traded fund SPDR S&P 500 ETF Trust (SPY) was up 0.7% and the actively traded Invesco QQQ Trust (QQQ) was 1% higher in Tuesday's premarket activity amid renewed hopes of peace between the US and Iran after President Trump said talks are "proceeding nicely."

US stock futures were higher, with S&P 500 Index futures up 0.7%, Dow Jones Industrial Average futures advancing 0.6%, and Nasdaq futures gaining 1% before the start of regular trading.

The Chicago Federal Reserve Bank's monthly National Activity Index rebounded to a reading of 0.14 in April from minus 0.15 in March, compared with expectations for a smaller gain to minus 0.03 in survey of analysts compiled by Bloomberg as of 7:30 am ET.

The Philadelphia Federal Reserve Bank's monthly nonmanufacturing activity index declined to minus 23.6 in May from minus 16.5 in the previous month, compared with the expectations for an increase to minus 13 in a survey compiled by Bloomberg, indicating more widespread contraction in the sector.

The Case-Shiller National Home Price index rose by 0.7% in March before seasonal adjustment following a 0.3% increase in February.

Consumer confidence data for May is due at 10 am ET.

The Dallas Fed's manufacturing reading for May will be released at 10:30 am ET.

In premarket activity, bitcoin was down by 0.1%. Among cryptocurrency ETFs, the cryptocurrency fund ProShares Bitcoin Strategy ETF (BITO) was 1.8% higher, Ether ETF (EETH) advanced 2.9%, and Bitcoin & Ether Market Cap Weight ETF (BETH) retreated by 0.4%.

Power Play:

Industrial

The State Street Industrial Select Sector SPDR ETF (XLI) advanced 0.7%, while the Vanguard Industrials Index Fund (VIS) lost 0.03%, and the iShares US Industrials ETF (IYJ) was flat.

Elbit Systems (ESLT) stock was up more than 10% before the opening bell after the company reported higher Q1 non-GAAP earnings and revenue.

Winners and Losers:

Financial

The State Street Financial Select Sector SPDR ETF (XLF) advanced 0.4%. Direxion Daily Financial Bull 3X Shares (FAS) was up 1.2%, while its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), was 1.1% lower.

FinVolution (FINV) shares were up more than 5% pre-bell after the company reported higher-than-expected Q1 adjusted earnings and net revenue.

Consumer

The State Street Consumer Staples Select Sector SPDR ETF (XLP) was up 0.1% and the Vanguard Consumer Staples Index Fund ETF Shares (VDC) gained by 0.02%. The iShares US Consumer Staples ETF (IYK) was down 0.6%. The State Street Consumer Discretionary Select Sector SPDR ETF (XLY) increased by 0.6%. The VanEck Retail ETF (RTH) was inactive, while the State Street SPDR S&P Retail ETF (XRT) was 0.3% higher.

Ferrari (RACE) shares were down more than 3% pre-bell a day after the company said it has launched a new all-electric Luce sports car, expanding its lineup with a dedicated electric platform.

Technology

The State Street Technology Select Sector SPDR ETF (XLK) increased by 1.5%, and the iShares US Technology ETF (IYW) was 1.2% higher, while the iShares Expanded Tech Sector ETF (IGM) was up 1.5%. Among semiconductor ETFs, the State Street SPDR S&P Semiconductor ETF (XSD) gained by 4.1%, while the iShares Semiconductor ETF (SOXX) rose by 2.8%.

WeRide (WRD) shares were up more than 1% in premarket activity after the company said it will operate its autonomous Robobus at the Roland-Garros for a third consecutive year with Renault Group.

Energy

The iShares US Energy ETF (IYE) was flat, while the State Street Energy Select Sector SPDR ETF (XLE) was down by 1.2%.

Eni (E) stock was down more than 2% before the opening bell a day after falling 1.4% at the prior close. The company and its partners, Petroci and Vitol, approved the final investment decision for Cote d'Ivoire's Baleine Phase 3 project, advancing development of the country's largest hydrocarbon discovery.

Health Care

The State Street Health Care Select Sector SPDR ETF (XLV) advanced 0.4%, the Vanguard Health Care Index Fund (VHT) was up 0.6%, while the iShares US Healthcare ETF (IYH) gained by 0.9%. The iShares Biotechnology ETF (IBB) was 0.4% higher.

Eli Lilly (LLY) stock was up more than 1% premarket after the company said it agreed to acquire Curevo, LimmaTech Biologics and Vaccine in deals worth up to nearly $3.83 billion in total.

Commodities

Front-month US West Texas Intermediate crude oil advanced by 1.2% to $97.49 per barrel on the New York Mercantile Exchange. Natural gas was down 1.2% at $2.98 per 1 million British Thermal Units. The United States Oil Fund (USO) retreated by 0.7%, while the United States Natural Gas Fund (UNG) was 0.9% lower.

Gold futures for July retreated by 0.5% to $4,521.20 an ounce on the Comex. Silver futures declined by 0.8% to $76.09 an ounce. SPDR Gold Shares (GLD) was down by 0.4%, and the iShares Silver Trust (SLV) fell by 1.3%.

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Commodities

UKMTO Reports External Explosion Off Oman Coast

An external explosion has been reported about 60 nautical miles east of Muscat, Oman, the UK Maritime Trade Operations Centre said on Tuesday.The explosion occurred near the portside and close to the waterline, as reported by a vessel.The vessel and the crew have been reported safe, although there has been some discharge of bunker fuel into the sea, the UKMTO said.Further investigations are on, UKMTO said.

Commodities

Biofuels Update: Chicago Soybean Complex, Malaysian Palm Oil Diverge

Major biofuel feedstocks were mixed on Tuesday, as the Chicago soybean complex eased on ample supply availability, while Malaysian palm oil firmed following a rise in crude oil prices.The July soybean contract on the Chicago Board of Trade edged lower by 0.48% to $11.91 per bushel in early trade, and the July soybean oil contract inched down 0.31% to 73.75 cents per pound.South American supply in the global market is expected to increase as Brazil's soybean harvest concluded, according to price reporting agency MySteel.Brazilian soybean exports are projected at 16.1 million metric tons in May, up versus 14.2 mmt a year earlier, based on estimates by trade association Anec.In Argentina, the government may reportedly cut soybean export duties from January 2027, subject to tax revenues and continuation of the current administration. Export duties for wheat and barley will be reduced to 5.5% from 7.5% beginning in June.In the US, progress in soybean planting remained higher at 67% through the week ended May 17, compared with last year's pace of 63% and the five-year average of 53%. Updated data will be released by the agriculture department on Tuesday.With these factors buoying global supplies, MySteel expects Chicago soybeans "to trade in a range-bound pattern between $11.70 per bushel and $12.10 per bushel."In Asia, Malaysian palm oil futures tracked gains in crude oil prices following US military strikes on Iran, but slowing exports partially offset increases.The Bursa Malaysia Derivatives' June crude palm oil contract recovered 0.43% to 4,429 Malaysian ringgit ($1,119.71) per metric ton on Tuesday. The July palm oil contract rose 0.45% to 4,466 ringgit/mt.Indonesia's move to centralize exports of palm oil and other commodities to a state-backed agency, which is planned for implementation beginning September, may provide a temporary boost to Malaysia's export market, hence supporting prices."Crude oil and geopolitical risks, together with Indonesia's export policy, were the core variables driving (vegetable) oil price increases," MySteel said.The new export policy could further reduce Indonesian shipments of palm oil, which have already seen a drop in March to 2.17 million metric tons from 2.88 mmt a year earlier, according to industry association data, cited by Trading Economics.Indonesian Palm Oil Association chairman Eddy Martono, as cited by Jakarta Globe, cautioned that the new system, if not managed properly, may disrupt long-established export markets and trading networks.Uncertainties in export mechanisms have also impacted farmers, as palm oil fresh fruit bunch prices fell to around 1,000 Indonesian rupiah ($0.06) per kilogram from 2,800 rupiah/kg, after traders, mills, and companies withheld purchases and temporarily halted sales, according to a palm oil farmer association cited by Reuters.The government reportedly argued that the centralized system will enhance oversight of shipments, preventing state revenue leakages of around $150 billion annually.In Malaysia, declining Malaysian shipments weighed on prices, after cargo surveyors reportedly estimated a 14.5% to 18.0% month-over-month decline in export volumes for the May 1-25 period.A possible US-Iran peace deal could pressure palm oil prices going forward due to decreasing appeal of biofuels, Phillip Capital said.The market will be closed on Wednesday for Eid holiday.In the US, ethanol prices also rose, with June contract on the NYMEX up 0.74% to about $2.04 per gallon on Friday.

Commodities

Market Chatter: Singapore Diplomat Expects Large-Scale Investment Imminent in Renewables

Singapore's chief climate diplomat Ravi Menon expects fresh, large-scale investment in the renewables sector, with concerns related to energy security and supply chain expected to boost demand and revenue, Bloomberg reported Tuesday.The rising worldwide demand for clean energy industry inputs is expected to result in an increase in prices in the future, unless the industry capacity manages to catch up, Menon told Bloomberg News.Considering the expectations of rise in demand and prices, investment by institutional investors and hedge funds must have already made its way into the sector, said Menon, who served as the chief of the Monetary Authority of Singapore for over 12 years before retiring in 2024.The ongoing energy supply crisis resulting from the Iran war has led to a surge in demand for renewables, with countries heavily reliant on fossil fuels eyeing energy independence, the report said. Countries like South Korea and the Philippines are looking to speed up such projects, it added.A longer-term shift back to coal, a strategy adopted by several Asian countries including India to combat power shortages, could however dent the progress of renewables, Menon said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)