Stock Market Update

Equity futures are hovering near unchanged levels as the market awaits the Employment Situation Report at 08:30 ET.

The market largely looked past yesterday's ADP Employment Change Report for June showed a loss of 33,000 jobs from private-sector payrolls, but the more comprehensive report today will no doubt stir the markets, given the report's rate cut implications.

The House voted 219-213 on a procedural motion that advances "One Big Beautiful Bill" to a final House vote, which is expected shortly. House Speaker Mike Johnson says, "we have the votes." However, leadership from both sides of the aisle are allowed to speak as long as they want in floor debate, which could push back timing of the vote.

Bloomberg reported this morning that President Trump has rescinded its restrictions on the export of chip design software to China as a part of the ongoing trade deal between the two nations. The initial ban on semiconductor sales to China was a retaliatory measure for China halting the export of rare earth materials to the U.S. in May.

The market will receive a big batch of data today, headlined by the Employment Situation Report for June (Briefing.com consensus 120,000; prior 139,000) at 8:30 ET. May Trade Balance (Briefing.com consensus -$70.5 bln) and weekly Initial Claims (Briefing.com consensus 240,000; prior 236,000) will also be reported at 8:30 ET, followed by the final June S&P Global U.S. Services PMI (prior 53.7) at 9:45 ET, and May Factory Orders (Briefing.com consensus 7.9%; prior -3.7%) and June ISM Services (Briefing.com consensus 58.7%; prior 49.9%) at 10:00 ET.

Treasuries are on track for a higher start with the 10-yr yield down three basis points at 4.26%.

In U.S. corporate news:

• Datadog (DDOG 147.25, +12.24, +9.1%): stock will be added to the S&P 500.
• FedEx (FDX 242.00, +2.86, +1.2%): BNP Paribas upgraded the stock to Outperform from Underperform with a $270 target.
• Tripadvisor (TRIP 16.24, +1.25, +8.3%): Starboard Value will take a 9% stake in the company.

Reviewing overnight developments:

• Asian markets ended mixed. Japan's Nikkei +0.1%, Hong Kong's Hang Seng -0.6%, China's Shanghai Composite +0.2%
  • In economic data:
    • China's June Caixin Services PMI 50.6 (expected 51.0; last 51.1)
    • Japan's June Services PMI 51.7 (expected 51.5; last 51.0)
    • India's June Services PMI 60.4 (expected 60.7; last 60.7)
    • Australia's June Services PMI 51.8 (expected 51.3; last 51.3). May trade surplus AUD2.24 bln (expected surplus of AUD5.08 bln; last surplus of AUD4.86 bln). May Imports 3.8% m/m (last 1.6%) and Exports -2.7% m/m (last -1.7%)
  • In news:
    • The U.S. pulled back restrictions on sales of chip design software to China
    • South Korea's President Lee said that trade negotiations with the U.S. are looking very difficult, and it is unclear if they can be finished ahead of the July 9 deadline
    • Secretary of State Rubio cancelled his planned trip to Japan and South Korea, but he might still visit Malaysia
• Major European indices trade near their flat lines. Germany's DAX +0.1%, U.K.'s FTSE +0.5%, France's CAC -0.1%
  • In economic data:
    • Eurozone's June Services PMI 50.5 (expected 50.0; last 49.7)
    • Germany's June Services PMI 49.7 (expected 49.4; last 47.1)
    • U.K.'s June Services PMI 52.8 (expected 51.3; last 50.9)
    • France's June Services PMI 49.6 (expected 48.7; last 48.9)
    • Italy's June Services PMI 52.1 (expected 52.6; last 53.2)
    • Spain's June Services PMI 51.9 (expected 51.1; last 51.3)
    • Swiss June CPI 0.2% m/m (expected 0.1%; last 0.1%); 0.1% yr/yr (expected -0.1%; last -0.1%)
  • In news:
    • British Prime Minister Starmer said that Chancellor Reeves will be in her position "for years to come" after Parliament reversed some of her welfare reform plans
    • Bank of England's Decision Maker Panel raised its year-ahead CPI outlook to 3.3% from 3.0%
    • European Commission President Von der Leyen will face a confidence vote in the European Parliament next week