The major indices started the day in the green, gave up most of those gains, and the Dow briefly dipped into negative territory as U.S. Treasury yields slipped again.   The benchmark 10-year is now down to 2.251%.  

Then around 12:30, stocks turned around on comments from the Federal Reserve Vice Chairman Richard Clarida.  While “The U.S. economy is in a very good place, with the unemployment rate near a 50-year low, inflationary pressures muted, expected inflation stable, and GDP growth solid and projected to remain so,”  the central bank is prepared to consider interest-rate cuts should economic data signal a greater risk of a slowdown than is currently expected. 

Clarida added an important caveat, “If the incoming data were to show a persistent shortfall in inflation below our 2% objective, or were it to indicate that global economic and financial developments present a material downside risk to our baseline outlook, then these are developments that the committee would take into account in assessing the appropriate stance for monetary policy.”  

The most important part in my opinion of Clarida’s statement, is the persistent lack of inflation.  Remember, the market sold off when Jay Powell said this phenomenon was "transient."

Yet, today, we saw the PCE deflator revised to 0.4% from 0.6%.

Crude oil dipped to $57.70 per barrel, despite a slight decrease in crude inventories, which were down 0.3 million barrels from the previous week, amid continued growth concerns.  Overall, U.S Crude oil inventories are about 5% above the five-year average for this time of year, at 476.5 million barrel.  Gasoline inventories increased by 2.2 million barrels, 1% above the five-year average and Distillates decreased by 1.6 million barrels and are about 5% below the five-year average for this time of year.

Energy is the worst performing sector down 0.94%. 

There has been lots of economic data out today.   

• Initial Jobless Claims: Rose by 3,000 to 215,000 in the week ended May 25. A better gauge, the 4-week moving average fell by 3,750 to 216,750.  Despite the increase, labor markets remain tight. Continuing claims declined by 26,000 to 1,657,000, while the 4-week moving for continuing claims dropped by 3,500 to 1,672,500.
• Mortgages: The 30-year fixed-rate mortgage averaged 3.99% in the week of May 30, was down from 4.06%, a 16-month low. The 15-year fixed-rate mortgage averaged is 3.46%, down from 3.51%. Rates have been dropping along with the broader bond market on concerns about the U.S. - China trade war and overall global growth slowing. 
• Pending Home Sales:  According to the National Association of Realtors (NAR), Pending Home Sales fell 1.5% in April, and 2% lower than a year ago. The consensus was for a 0.5% increase. The NAR’s index tracks home-contract signings.  April is the 16th-straight month of annual declines. The Midwest was the only region with an increase in April, up 1.3%. Pending sales were down 1.8% in the Northeast, 2.5% in the South, and 1.8% in the West. 
• Trade:  The U.S. trade deficit "advanced" look at goods in April rose slightly to a seasonally adjusted $72.1 billion from $71.9 billion. Wholesale inventories climbed by 0.7% and retail inventories grew by 0.5% in April. Exports fell 4.2% and imports dropped by 2.7% in April, compared to a year ago, exports have dropped 3.6% and imports have fallen 0.9%.