S&P 500 Jumps 2% as Earnings Season Kicks Off

Also, two-year T-note, silver, natural gas and Japanese yen futures

1. S&P 500 E-mini futures (/ES): +2.18% 
2. 2-year T-note futures (/ZT): -0.08% 
3. Silver futures (/SI): +1.2% 
4. Natural gas futures (/NG): -2.42% 
5. Japanese yen futures (/6J): -0.19% 

It’s a turnaround Tuesday in markets, with a reversal of fortune for most major asset classes. Whereas yesterday weakened stocks, bonds and the U.S. dollar in favor of gold and Bitcoin, today’s action is seeing the opposite transpire. News flow has been light, although there have been reports of a U.S.-Indian trade deal that could see companies like Amazon (AMZN) and Walmart (WMT) gain tariff-free access to the world’s largest population. Earnings flow dominates the calendar starting today, with Tesla (TSLA) reporting after hours. 

Stocks’ weakness that occurred yesterday has not found any additional follow-up today. The S&P 500 is up over 2% as traders are seeing the weakness that transpired in thin trading volumes at the start of the week as an opportunity to return to the market at more favorable prices. The Trump-Powell standoff appears to be a bridge to nowhere, with some market observers noting that Powell is gone by May 2026, one way or the other. After touching 35.75 on Monday, the spot VIX is back down to 30.49. 

Bonds are stabilizing at the long-end of the curve, an important development in the context of surging concern over the United States’ reliability as a global counterparty—for both trade deals and in financial markets. The reduction in term premium gives risk assets breathing room otherwise. For now, there’s no evidence to support the assertion that foreigners are jettisoning Treasuries; recent auctions have shown strong demand from abroad. To this end, there is a two-year note (/ZTM5) auction later today. 

Gold prices (/GCM5) have had an astounding run, but after a sharp intraday reversal, one can’t help but one wonder if it’s “too far, too fast.” Indeed, gold prices are now more than 25% above their 200-SMA, a unique occurrence in history that has typically been a sign of weakness to come: one-week, two-week and one-month returns are negative thereafter. This may give some breathing room to silver (/SIK5) to step into the spotlight, which has been relatively out of favor (see: gold/silver ratio above 100) during the Trump tariff turmoil. 

Natural gas prices (/NGM5) are a textbook example of the real economic consequences of tariffs remaining in place. The United States is the world’s largest producers of liquefied natural gas, and abrupt trade barriers leave the domestic market awash in supply in the short-term. A double top carved out in 1Q’25 sees potential losses below 2.8 in the short-term. 

One of the clearer signs of relaxation across asset classes is the U.S. dollar is no longer bleeding out across the board. The two biggest beneficiaries of the greenback deleveraging have been the euro (/6EM5) and the Japanese yen (/6JM5), which are among the loss leaders in today’s session. A light macroeconomic calendar keeps FX markets trapped in the gravitational well of tariff headlines. 

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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