Stock Market Update

The S&P 500 futures are down 20 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 122 points and are trading 0.7% below fair value, and the Dow Jones Industrial Average futures are down 57 points and are trading 0.2% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are lower, along with Treasury yields. The 10-yr note yield is down three basis points to 3.81%. The 2-yr note yield is down four basis points to 3.85%.

The early action looks similar to yesterday's session, which featured a chip stock-led slide and a drop in market rates on growth concerns following soft data. In recent economic news, the final August Services PMI reading for the eurozone, China's Caixin Services PMI for August, and Japan's Services PMI all showed below-consensus growth.

Today's data for the US include the weekly MBA Mortgage Applications Index, which jumped 1.6% after last week's 0.5% increase. The July Trade Balance is released at 8:30 ET, July Factory Orders and July JOLTS Job Openings are released at 10:00 ET.

In corporate news:

• NVIDIA (NVDA 106.01, -2.01, -1.9%): down ahead of the open after receiving DOJ subpoena in escalating antitrust probe, according to Bloomberg
• Salesforce (CRM 246.63, -1.43, -0.6%): to acquire Tenyx, a developer of AI-powered voice agents; financial details not disclosed
• Dick's Sporting Goods (DKS 234.90, +2.78, +1.2%): beats by $0.51, reports revs in-line; raises FY25 EPS and comparable sales guidance, guides revenue below consensus
• Dollar Tree (DLTR 72.35, -9.30, -11.4%): misses by $0.37, misses on revs; guides Q3 EPS below consensus, revs in-line; guides FY25 EPS below consensus, revs below consensus
• Hormel Foods (HRL 31.73, -1.41, -4.3%): beats by $0.01, misses on revs; guides FY24 EPS in-line, revs below consensus
• Zscaler (ZS 161.82, -31.37, -16.2%): beats by $0.18, beats on revs; guides Q1 EPS below consensus, revs above consensus; guides FY25 EPS below consensus, revs in-line
• GitLab (GTLB 50.40, +5.72, +12.8%): beats by $0.05, beats on revs; guides Q3 EPS above consensus, revs in-line; guides FY25 EPS above consensus, revs above consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a lower note. Japan's Nikkei: -4.2%, Hong Kong's Hang Seng: -1.1%, China's Shanghai Composite: -0.7%, India's Sensex: -0.3%, South Korea's Kospi: -3.2%, Australia's ASX All Ordinaries: -2.0%.
  • In economic data:
    • China's August Caixin Services PMI 51.6 (expected 51.9; last 52.1)
    • Japan's August Services PMI 53.7 (expected 54.0; last 53.7)
    • Hong Kong's August Manufacturing PMI 49.4 (last 49.5)
    • India's August Services PMI 60.9 (expected 60.4; last 60.3)
    • Australia's Q2 GDP 0.2% qtr/qtr, as expected (last 0.2%); 1.0% yr/yr, as expected (last 1.3%). August Services PMI 52.5 (expected 52.2; last 50.4). August AIG Construction Index -38.1 (last -23.2) and AIG Manufacturing Index -30.8 (last -19.5)
  • In news:
    • Japan's Nikkei (-4.2%) leading the slide as it fell to its lowest level in nearly three weeks. Chipmakers were at the forefront of the selling, making for a continuation of the trend seen during the U.S. session.
    • China's Caixin Services PMI for August showed a larger than expected deceleration in the pace of growth (51.6; expected 51.9) while Japan's Services PMI also showed below-consensus growth (53.7; expected 54.0).
    • Australia's stats agency observed that, excluding the coronavirus pandemic, growth in Q2 was the slowest in more than 30 years.
    • The secretary general of Japan's LDP entered the leadership race to replace outgoing Prime Minister Kishida.
• Major European indices trade in the red. STOXX Europe 600: -1.0%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.9%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -0.6%.
  • In economic data:
    • Eurozone's July PPI 0.8% m/m (expected 0.3%; last 0.6%); -2.1% yr/yr (expected -2.5%; last -3.3%). August Services PMI 52.9 (expected 53.3; last 51.9)
    • Germany's August Services PMI 51.2 (expected 51.4; last 52.5)
    • U.K.'s August Services PMI 53.7 (expected 53.3; last 52.5)
    • France's August Services PMI 55.0, as expected (last 50.1)
    • Italy's August Services PMI 51.4 (expected 52.5; last 51.7)
    • Spain's August Services PMI 54.6 (expected 54.8; last 53.9)
  • In news:
    • The final August Services PMI reading for the eurozone showed below-consensus growth (52.9; expected 53.3) while the U.K.'s reading (53.7; expected 53.3) exceeded expectations.
    • A couple European Central Bank policymakers have spoken in favor of a rate cut in September while two other officials said that policy is not on a pre-set path.
    • Germany's Kiel Institute for the World Economy lowered its domestic growth forecast for 2024 to 0.1% from 0.2% while the outlook for 2025 was reduced to 0.5% from 1.1%.