Stock Market Update

The stock market is on track for a flat start after yesterday's poor finish with futures on the S&P 500 trading two points below fair value.

An intraday rise in Treasury yields pressured the market on Wednesday and there is little relief on that front as Treasuries trade lower again, lifting the 30-yr yield (+4 bps to 5.13%) to a fresh high for the year.

In Washington, the House of Representatives passed the large reconciliation bill with just a single vote margin this morning.

The market will receive a handful of economic reports this morning, starting with the 8:30 ET release of weekly jobless claims (Briefing.com consensus 232,000; prior 229,000), followed by flash Manufacturing (prior 50.2) and Services (prior 50.8) PMI readings for May at 9:45 ET. The slate will be rounded out with the 10:00 ET release of Existing Home Sales for April (Briefing.com consensus 4.15 mln; prior 4.02 mln).

In U.S. corporate news:

• Advance Auto (AAP 40.87, +9.56, +30.5%): company beat Q1 expectations and reaffirmed its guidance for the year.
• Analog Devices (ADI 228.50, +6.28, +2.8%): company beat Q2 expectations and issued above-consensus guidance for Q3.
• Urban Outfitters (URBN 70.59, +10.99, +18.4%): company beat Q1 expectations.
• Snowflake (SNOW 196.98, +17.86, +10.0%): company beat Q1 expectations, issued above-consensus Q2 revenue guidance, and raised its FY26 revenue guidance.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region retreated on Thursday. Japan's Nikkei -0.8%, Hong Kong's Hang Seng -1.2%, China's Shanghai Composite -0.2%.
  • In economic data:
    • Japan's flash May Manufacturing PMI 49.0, as expected (last 48.7) and flash Services PMI 50.8 (last 52.4). March Core Machinery Orders 13.0% m/m (expected -1.5%; last 4.3%); 8.4% yr/yr (expected -2.2%; last 1.5%).
    • Singapore's Q1 GDP -0.6% qtr/qtr (expected -0.8%; last 0.5%); 3.9% yr/yr (expected 3.8%; last 5.0%).
    • India's flash May Manufacturing PMI 58.3 (expected 58.0; last 58.2) and flash Services PMI 61.2 (expected 58.3; last 58.7).
    • Hong Kong's April CPI -0.1% m/m (last 0.0%); 2.0% yr/yr (expected 1.4%; last 1.4%).
    • Australia's flash May Manufacturing PMI 51.7 (last 51.7) and flash Services PMI 50.5 (last 51.0).
  • In news:
    • Japan's Finance Minister Kato said that U.S. Treasury Secretary Bessent agreed that foreign exchange levels should be determined by the market, suggesting that currencies will not be part of trade negotiations with Japan.
    • More than half of Japanese companies reportedly want the Bank of Japan to pause its tightening campaign due to tariffs.
    • Standard & Poor's warned that New Zealand is at a risk of a downgrade due to high deficits.
• Major European indices trade in the red. Germany's DAX -0.9%, U.K.'s FTSE -0.8%, France's CAC -1.0%.
  • In economic data:
    • Eurozone's flash May Manufacturing PMI 48.4 (expected 49.2; last 49.0) and flash Services PMI 48.9 (expected 50.4; last 50.1).
    • Germany's flash May Manufacturing PMI 48.8, as expected (last 48.4) and flash Services PMI 47.2 (expected 49.6; last 49.0). May ifo Business Climate Index 87.5 (expected 87.4; last 86.9). May Current Assessment 86.1 (expected 86.8; last 86.4) and Business Expectations 88.9 (expected 88.0; last 87.4).
    • U.K.'s flash May Manufacturing PMI 45.1 (expected 46.2; last 45.4) and flash Services PMI 50.2 (expected 50.0; last 49.0). April Public Sector Net Borrowing GBP20.16 bln (expected GBP18.00 bln; last GBP14.14 bln). May CBI Industrial Trends Orders -30 (expected -24; last -26).
    • France's May Business Survey 97 (expected 99; last 100). Flash May Manufacturing PMI 49.5 (expected 48.9; last 48.7) and flash Services PMI 47.4 (expected 47.7; last 47.3).
  • In news:
    • Flash PMI data for May showed a deepening contraction in eurozone's manufacturing sector and an unexpected contraction in services.
    • France's Europe Minister Haddad urged the EU to radically cut red tape and unify its single market to enhance competitiveness.