Nvidia surged 3.5% pre-market, reaching a market capitalization of $3,332 trillion, the highest globally. Dell Technologies and Super Micro Computer also gained after Elon Musk mentioned their involvement in his startup xAI's supercomputer project. The S&P 500 futures rose 0.4%, Nasdaq futures climbed 0.5%, and Dow Jones futures increased by 0.1%.

Monetary policy and Fed cuts still very much on investors' minds. Investors are closely watching several economic indicators today, including weekly jobless claims, housing starts and permits for May, the Philadelphia Fed Manufacturing Index for June, and the Q1 international trade current account report.

Additionally, the Atlanta Fed Business Inflation Expectations report and the weekly EIA domestic oil inventories report are due.

And to top this up, Federal Reserve officials, including Minneapolis Fed President Neel Kashkari, Richmond Fed President Thomas Barkin, and San Francisco Fed President Mary Daly, are scheduled to speak, potentially providing insights into future monetary policy.

The UK is in the spotlight today with a Bank of England rate decision. It provided no clear indications of when it might start lowering interest rates. Seven out of nine Monetary Policy Committee members voted to maintain the bank rate at 5.25%. Economists were expecting rates to remain steady, although forecasts of a rate cut were a little more pronounced a few weeks ago. The country is heading towards general elections which should bring the Labour Party to power on July 4, and the latest inflation figures were not as favorable as expected. All the signs point to a delay in cutting rates, even if the British economy could do with some easing. Also today, the Swiss National Bank (SNB) cut its interest rate by 25 basis points to 1.25%, while Norway's Norges Bank left its rate unchanged at 4.5%.

After two sessions of rebound, Europe adopted a cautious stance yesterday, which makes sense in view of the electoral turmoil in France. In addition, the country is in the hot seat in Brussels, along with eight other EU Member States, for the uncontrolled slippage of its public finances.

Yesterday, the CAC40 lost 0.77%, falling back to 7570 points. The Paris index is now over 8% below its May 10 record. Elsewhere in Europe, a cautious pullback took hold, particularly in Frankfurt and Brussels. The Swiss SMI capitalized on its defensive pharmaceutical stocks to gain 0.1%. The UK's FTSE100 ended up 0.2%. London is the place to be for investors, especially those looking to escape the mess that could be brewing on the Continent.

In China, indices are back on their heels after yesterday's big rebound. The central bank set the yuan's daily reference rate at its lowest level in over six months, sending the currency lower. At the same time, things seem to be happening behind the scenes at the PBOC. In a speech, the head of China's central bank spoke of new monetary policy tools, including intervention in the sovereign bond market and the setting of a single short-term interest rate instead of the current system. These announcements were clearly not enough to keep the flame burning this morning. Finally, Brazil's central bank maintained its key rate at 10.5%, unanimously and in line with expectations, despite President Lula's insistent demands for further cuts.

Meanwhile, Japan ended the session at zero, while China resumed its downward trend on the mainland (-1%) and in Hong Kong (-0.6%). South Korea, Taiwan and India, on the other hand, are in the light green. Australia loses a few more points. Europe should attempt a bullish awakening, given the trend in leading indicators.

Economic highlights of the day

Today on the agenda we have the German producer price index, the Swiss and the UK’s central banks monetary policy rate decisions. In the U.S., we have building permits, housing starts, new jobless claims and the Philadelphia Fed's business outlook, as well as crude oil inventories. The full agenda is here. 

The dollar is up to EUR 0.9322 and GBP 0.7880. The ounce of gold is stable at USD 2,340. Oil is firm, with North Sea Brent at USD 85.30 a barrel and US light crude WTI at USD 80.75. The yield on 10-year US debt is holding steady at 4.25%. Bitcoin trades at USD 66,000.

In corporate news:

  • Nvidia gained 3.5% on Tuesday, becoming the world's highest-valued company on the stock market with a market capitalization of around $3,340 billion, signaling investor confidence in generative artificial intelligence (AI) as a dominant economic force in the coming years. The company's shares rose by 3.4% in pre-market trading.
  • Stocks in the same sector, such as Advanced Micro Devices, Marvell Technology, Micron Technology, and Arm Holdings, also saw gains on Tuesday.
  • Dell Technologies and Super Micro Computer are set to provide server racks for the supercomputer being developed by Elon Musk's AI startup xAI. Shares of Dell and Super Micro increased by 3.8% and 4.8%, respectively, in pre-market trading.
  • Carlyle - Oil and gas producer Energean has announced the sale of its assets in Egypt, Italy, and Croatia to the American investment fund for up to $945 million.
  • Honeywell has acquired Caes Systems for $1.9 billion to bolster its aerospace technology division.
  • Eli Lilly is taking legal action against six additional entities, including spas and wellness centers, for unauthorized sales of products containing tirzepatide, the active ingredient in its diabetes medication Mounjaro.
  • Paypal has recruited Srini Venkatesan, a leading technology executive from Walmart, as its new CTO to spearhead the company's advancements in artificial intelligence.
  • Bp is set to acquire Bunge's 50% share in the Brazilian sugar and ethanol joint venture BP Bunge Bioenergia in a transaction valued at $1.4 billion.
  • Hewlett Packard Enterprise and Juniper Networks - The UK's Competition Authority has initiated an investigation into whether Hewlett Packard Enterprise's proposed $14 billion acquisition of Juniper Networks could reduce competition. Shares of Hewlett Packard Enterprise rose by 2.5% in pre-market trading.
  • Boeing - Families of the victims from the 737 MAX accidents in 2018 and 2019 are urging the U.S. Justice Department to impose a fine of up to $24.78 billion on the aircraft manufacturer and to pursue criminal charges.
  • Ge Aerospace anticipates global supply chain challenges to persist into 2025, despite a production slowdown at Boeing.
  • Qualcomm has agreed to a $75 million settlement in a shareholder lawsuit alleging the company concealed anti-competitive sales and licensing practices.
  • Amazon is planning a 10 billion euro investment in Germany to meet the growing demand for its cloud services and retail products. Additionally, the company has been fined $5.9 million by a California labor regulator for not adequately informing employees about productivity quotas at two warehouses.
  • Kroger reported quarterly sales that exceeded expectations, driven by strong consumer demand for its value-priced offerings amidst ongoing inflation.

Analyst recommendations:

  • Adobe Inc.: Phillip Securities maintains a reduce recommendation with a price target raised from USD 465 to USD 480.
  • Ball Corporation: Wells Fargo maintains its equal weight recommendation and reduces the target price from USD 69 to USD 64.
  • Citigroup Inc.: Goldman Sachs maintains its buy recommendation and raises the target price from USD 71 to USD 72.
  • Constellation Brands, Inc.: JP Morgan maintains its overweight rating and reduces the target price from USD 296 to USD 291.
  • Dow Inc.: Jefferies remains at hold with a target price reduced from USD 60 to USD 55.
  • Enphase Energy, Inc.: JP Morgan maintains its overweight rating and reduces the target price from USD 128 to USD 124.
  • Freeport-Mcmoran Inc.: Citigroup maintains a neutral recommendation with a price target raised from USD 46 to USD 52.
  • Linde Plc: Jefferies maintains its buy recommendation and raises the target price from USD 485 to USD 523.
  • Meta Platforms, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 475 to USD 540.
  • Nextera Energy: JP Morgan maintains its overweight recommendation and raises the target price from USD 76 to USD 90.
  • Nike, Inc.: JP Morgan maintains its overweight recommendation and reduces the target price from USD 122 to USD 116.
  • On Holding Ag: TD Cowen maintains its buy recommendation and raises the target price from USD 40 to USD 48.
  • Paypal Holdings, Inc.: Zacks maintains a neutral recommendation with a price target reduced from USD 70 to USD 62.
  • Southwest Airlines Co.: Redburn Atlantic maintains its sell recommendation with a price target raised from USD 24 to USD 25.
  • Tesla, Inc.: RBC Capital maintains its outperform rating and reduces the target price from USD 293 to USD 227.
  • Veralto Corporation: TD Cowen initiates a hold recommendation with a target price of USD 95.
  • Ssp Group Plc: Berenberg downgrades to hold from buy with a price target reduced from GBX 280 to GBX 180.
  • Ivanhoe Mines Ltd.: Citigroup maintains its buy recommendation with a price target raised from CAD 15 to CAD 24.