Top 3 things you need to know about the market on Tuesday

1. Wall Street set to open mixed

Stock markets are set to reopen flat after the Memorial Day weekend, after President Donald Trump’s visit to Japan failed to provide any real clarity about what will come next in the U.S.’s trade dispute with China.

At 12:30 (GMT +3), the S&P 500 futures contract was down 3.6 points or 0.1%, the Dow futures contract was down 7 points, less than 0.1%, while the tech-heavy Nasdaq 100 futures contract was down 1.5 points, also effectively flat.

2. Bond yields hit 18-month low

The demand for safe-haven assets continues to grow. Yields on 10-year U.S. Treasury bonds hit 2.27% overnight, their lowest since October 2017, while the two-year yield, which is more closely tied to the Federal Reserve’s official interest rates, fell to 2.13%, equalling a 15-month low that it hit last week.

The trade dispute with China has encouraged investors to bet on the Federal Reserve cutting interest rates to support the economy. That thesis will be tested later in the day by the latest data on national house prices at 16:00 (GMT +3), and by the release of the Conference Board’s consumer confidence index at 17:00 (GMT +3).

3. Fiat Chrysler wants to merge with Renault

The global automotive industry could be on the verge of a major shake-up. Fiat Chrysler Automobiles  has proposed merging with France’s Renault , and the French group has said it will “study with interest the opportunity.”

On their own, the two companies would make the world’s third-largest auto group. But if Renault’s current strategic partners, Nissan  and Mitsubishi  joined the party, the new group would become the world's top group by sales, ahead of Toyota  and Volkswagen.

Both FCA and Renault rose over 10% on Monday, but have fallen back a little in early trading on Tuesday due to profit-taking.

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