Stock Market Update

The stock market is seeking a higher start with futures on the S&P 500 trading 13 points above fair value.

Equity futures hold modest gains after a night that saw gains across Asian equity markets, followed by a more subdued, but generally upbeat showing in Europe.

The market received final May Services PMI readings from major economies with most coming in ahead of expectations, though the reading for the eurozone (49.7; prior 50.1) pointed to a small contraction in activity.

Investors will also receive the final S&P Global U.S. Services PMI (prior 50.8) at 9:45 ET. That release will be preceded by the 8:15 ET release of the ADP Employment Change report for May (Briefing.com consensus 115,000; prior 62,000), and it will be followed by the ISM Services Index (Briefing.com consensus 52.0%; prior 51.6%) at 10:00 ET.

Reported earlier, the weekly MBA Mortgage Index fell 3.9% to follow last week's 1.2% decrease. The Purchase Index was down 4.4% while the Refinance Index fell 3.5%.

Treasuries are tracking a largely flat start with slight relative weakness up front. The 2-yr yield is up one basis point at 3.97% while the 10-yr yield is flat at 4.46%.

In U.S. corporate news:

• CrowdStrike (CRWD 455.92, -32.84, -6.7%): beat Q1 EPS expectations, issued above-consensus guidance for Q2, raised its EPS guidance for FY26, and announced a $1 bln buyback. Stock received downgrades from BofA Securities, Canaccord Genuity, and Evercore ISI.
• Guidewire Software (GWRE 251.40, +33.22, +15.2%): beat Q3 expectations and issued above-consensus revenue guidance for Q4.
• Hewlett Packard Enterprise (HPE 18.82, +1.13, +6.4%): beat Q2 expectations, issued in-line guidance for Q3, and raised the low end of its EPS guidance for FY25.
• Wells Fargo (WFC 77.88, +2.23, +3.0%): bank is no longer subject to asset growth restrictions imposed by the Fed.

Reviewing overnight developments:

• Asian markets ended higher. Japan's Nikkei +0.8%, Hong Kong's Hang Seng +0.6%, China's Shanghai Composite +0.4%.
  • In economic data:
    • Japan's May Services PMI 51.0 (expected 50.8; last 52.4)
    • South Korea's May CPI -0.1% m/m (expected 0.1%; last 0.1%); 1.9% yr/yr (expected 2.1%; last 2.1%)
    • India's May Services PMI 58.8 (expected 61.2; last 58.7)
    • Hong Kong's May Manufacturing PMI 49.0 (last 48.3)
    • Australia's Q1 GDP 0.2% qtr/qtr (expected 0.4%; last 0.6%); 1.3% yr/yr (expected 1.5%; last 1.3%). May Services PMI 50.6 (expected 50.5; last 51.0). May AIG Construction Index -6.4 (last -7.9) and AIG Manufacturing Index -23.5 (last -26.5).
  • In news:
    • Lee Jae-myung, South Korea's opposition candidate, who was seen as a front-runner, won the country's presidential election.
    • China Securities Journal reported that the People's Bank of China is fine-tuning liquidity levels to meet mid-year needs.
    • Nikkei reported that Japan is forming a think tank in response to President Trump's tariff agenda.
• Major European indices trade in the green. Germany's DAX +0.7%, U.K.'s FTSE +0.3%, France's CAC +0.7%.
  • In economic data:
    • Eurozone's May Services PMI 49.7 (expected 48.9; last 50.1)
    • Germany's May Services PMI 47.1 (expected 47.2; last 49.0)
    • U.K.'s May Services PMI 50.9 (expected 50.2; last 49.0)
    • France's May Services PMI 48.9 (expected 47.4; last 47.3)
    • Italy's May Services PMI 53.2 (expected 52.1; last 52.9)
    • Spain's May Services PMI 51.3 (expected 52.8; last 53.4) and April Industrial Production 0.6% yr/yr (last 0.9%)
  • In news:
    • Airbus has been boosted by speculation that China is preparing a big aircraft order.
    • Germany's government approved a EUR46 bln corporate tax relief plan.