CNBC Daily Open: The U.S. stock market could be a little too optimistic

The U.S. stock market appears a little too optimistic. All three major indexes climbed Wednesday, with the S&P 500 and Nasdaq Composite enjoying their third consecutive session in the green. The S&P, in fact, is around 2% away from its all-time high, which it reached in February.

That’s despite the shadow of U.S. President Donald Trump’s “reciprocal” tariffs still haunting the economy. As the 90-day tariff pause ticks down, America, so far, has just one deal, struck with the U.K., and an agreement with China that, while reaffirmed by both sides after two days of negotiations in London, is still preliminary and keeps tariffs at double-digit levels.

Corporations are seemingly bracing for economic fallout already. Layoffs have been accelerating this year. Google and Paramount on Tuesday joined Microsoft, Citigroup and Disney in announcing headcount cuts. (However, it should be noted that layoffs, rather perversely, tend to push up stock prices because they are a cost-cutting measure.)

And the bond market, the sterner sibling of the stock market, might put a check on investor enthusiasm. If there are unexpected results from U.S. inflation data and Treasury auctions on Wednesday and Thursday, yields could rise again, not only putting pressure on stocks, but also the broader economy in terms of higher borrowing costs.

The stock market, then, seems to be betting on more trade breakthroughs and favorable inflation data. But the bond market and CEOs might not be so sure about that.

U.S. and China reach trade framework
The U.S. and China have reached a consensus on trade, representatives from both sides said, following a second day of high-level talks in London, according to an NBC transcript. “We have reached a framework to implement the Geneva consensus and the call between the two presidents,” U.S. Commerce Secretary Howard Lutnick said. That echoed comments from the Chinese side, shared via a translator.

S&P 500 notches three-day win streak
U.S. stocks rose Wednesday. The S&P 500 advanced 0.55% and the Nasdaq Composite climbed 0.63%, the third day of gains for both indexes. The Dow Jones Industrial Average added 0.25%. The pan-European Stoxx 600 index closed mostly flat after struggling for direction most of the day. The U.K.’s FTSE 100 added 0.24%, an inch away from its record in March.

Shares of Tesla regain ground
Tesla shares rose 5.7% Tuesday to close at $326.09, leaving the stock about $6 short of where it was trading last Wednesday, when it sank 14% after CEO Elon Musk publicly feuded with Trump. The latest jump came after Musk shared a video on X showing that Tesla was testing driverless vehicles on the roads of Austin, Texas. Musk said Tuesday Tesla’s robotaxi service is “tentatively” set to launch in Austin on June 22.

Bond market in focus
The U.S. Bureau of Labor Statistics releases data on May’s consumer prices on Wednesday, then producer prices on Thursday. At the same time, the government will hold sales of long-duration Treasurys on the same days. Together, those results could have important implications for the direction of the economy and the reaction of the Federal Reserve and its approach to interest rate policy, reported CNBC’s Jeff Cox.

Fund houses warn of ‘capital outflows’
Trump’s “One Big Beautiful Bill Act” aims to penalize foreign-owned firms operating in the U.S. and that are from countries with “unfair foreign taxes” under a provision known as Section 899. The Investment Company Institute, which represents fund houses in the U.S., is lobbying Congress for an amendment, warning Section 899 could cause investors to “retreat quickly from US equities,” leading to “capital outflows.”  

Google offers buyouts
Google on Tuesday offered buyouts to employees in several divisions. Affected units include knowledge and information — which houses the company’s search, ads and commerce divisions — and central engineering units as well as marketing, research and communications teams, CNBC has learned. Google has done multiple buyout offers in a few units this year, making it a preferred strategy to reduce headcount.

[PRO] Tesla shares to drop 60%: Wells Fargo
Even though investors were enthused by the prospect of Tesla rolling out its robotaxi service in the future, Wells Fargo analysts think that feature won’t be able to offset the company’s weak sales that will trend “meaningfully weaker.” The bank expects Tesla’s shares to plunge around 63% from Tuesday’s close.