Stock Market Update

Equity futures are slightly lower as the market digests a new round of earnings reports following yesterday's record-setting session for the S&P 500 and Nasdaq Composite.

Yesterday's action saw stocks get off to a hot start after some early earnings optimism, though selling activity in the late afternoon considerably thinned the major averages' gains.

Earnings are set to be the main driver of this week's action, with a broad swath of names reporting, including Alphabet (GOOG) and Tesla (TSLA). 

Trade developments have been relatively tame, with Bloomberg reporting that trade representatives from the U.S. and Japan met ahead of the August 1 tariff deadline. 

Separately, Reuters reports that the likelihood of a trade deal between the U.S. and India before the deadline has declined.

Economic data releases are light this week, with no releases today.

In corporate news:

• Coca-Cola (KO 69.90, -0.17, -0.2%) reports an EPS beat of $0.04 and revenues in line but lowers FY25 EPS below consensus. 
• DR Horton (DHI 139.50, +8.28, +6.3%) beat EPS by $0.47, and revenue of $9.23B was well ahead of consensus. Net orders and closings both came in strong. Management flagged ongoing affordability pressures but struck a constructive tone on demand stabilization.
• General Motors (GM 51.31, -1.90, -3.6%) beat EPS expectations by $0.09, with increased revenues. The $1.1B Q2 tariff hit is expected to rise in Q3, but GM reaffirmed full-year guidance and pledged to mitigate at least 30% of the $4–5B gross tariff impact.
• Lockheed Martin (LMT 430.85, -29.68, -6.4%) misses EPS expectations by $5.06, misses on revenues, and guides FY25 EPS below consensus with revenues in line. 
• Northrop Grumman (NOC 532.11, +16.82, +3.3%) beats EPS expectations by $1.31, with a 1.3% year-over-year rise in revenues. The company guided FY25 EPS and revenues in line. 
• NXP Semiconductors NV (NXPI 213.56, -14.71, -6.4%) beats EPS expectations by $0.04 with revenues in line; guided Q3 EPS in-line and revenues in line. 
• Phillip Morris International (PMI 173.99, -6.49, -3.6%) beats EPS expectations by $0.03 but misses on revenues and guides Q3 EPS and FY25 EPS below consensus. 
• Sherwin-Williams (SHW 330.11, -11.19, -3.3%) misses EPS expectations by $0.42, reports revenues in line, and guides FY25 EPS below consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note, while Japan's Nikkei (-0.1%) underperformed, logging a slim loss. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: +0.6%, India's Sensex: UNCH, South Korea's Kospi: -1.3%, Australia's ASX All Ordinaries: +0.2%

In news:

• China's COSCO is reportedly seeking veto rights in the Panama port deal that was made in March.
• The latest policy minutes from the Reserve Bank of Australia showed a majority view that inflation trends should be confirmed before additional easing is announced. Three out of nine policymakers opposed the central bank's pause in its rate cut campaign.

In economic data:

• South Korea's June PPI 0.1% m/m (last -0.4%); 0.5% yr/yr (last 0.3%)
• New Zealand's June trade surplus NZD142 mln (expected surplus of NZD1.02 bln; last surplus of NZD1.08 bln)

Major European indices trade on a mostly lower note. STOXX Europe 600: -0.6%, Germany's DAX: -1.0%, U.K.'s FTSE 100: UNCH, France's CAC 40: -0.8%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -0.1%. 

In news:

• There is growing speculation that British Chancellor Reeves will have to call for spending cuts or higher taxes in the Autumn budget statement despite a prior pledge that taxes will not be raised.
• The Bank of England's project to launch a digital pound could be terminated due to increasing resistance from the public.
• The European Central Bank's lending survey for Q2 showed steady bank lending conditions and rising loan demand from households.

In economic data: 

• U.K.'s June Public Sector Net Borrowing GBP20.68 bln (expected GBP17.4 bln; last GBP17.44 bln) and June Public Sector Net Cash Requirements -GBP16.108 bln (prior GBP20.959 bln)