Stock Market Update

Equity futures are mixed this morning following a muted session yesterday that indicated the market is largely focused on rate cut expectations, with Fed Chair Powell's Friday speech an eagerly anticipated catalyst of market direction.

The probability of a 25-basis point rate cut at the September FOMC meeting currently stands at 83.1%, according to the CME FedWatch tool, down from last week but still highly likely. 

On the geopolitical front, President Trump stated via Truth Social that he will set up a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy, with a trilateral meeting that includes President Trump to follow. 

Additionally, Bloomberg reports that Secretary of State Marco Rubio is drafting security agreements for Ukraine, though the market was little moved by developments around these negotiations yesterday. 

Separately, The Financial Times reports that Ukraine offered to purchase $100 billion in U.S. weapons as a part of a deal for security guarantees. 

Earnings reports are relatively light this week, though a cohort of large retailers kicked off their earnings reports this morning. Retailers fared well yesterday in anticipation of earnings, with the SPDR S&P Retail ETF finishing with a gain of 0.9%.

The market will also receive Housing Starts and Building Permits for July at 8:30 ET. 

In corporate news:

• Apple (AAPL  230.35, -0.54, -0.2%) expands their iPhone production in India, according to Bloomberg.
• Home Depot (HD 396.00, +1.30, +0.3%) missed EPS expectations by $0.04, reported revenues in-line, and reaffirmed FY26 EPS and revenue guidance
• Medtronic (MDT 90.00, -2.81, -3.0%) beat EPS expectations by $0.03, beat on revenues, and raised FY26 EPS above consensus. The company also announced Board appointments and shareholder value creation initiatives to advance strategic priorities
• NVIDIA (NVDA 182.26, +0.25, +0.1%) is developing a new chip to sell in China that is reportedly superior to the H20 chip, with the company hoping to deliver samples next month, accoding to Reuters. 
• Tesla (TSLA 335.00, -0.16, -0.04%) starts taking new orders in China for its Model Y L vehicle, according to Reuters. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Japan's Nikkei: -0.4%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: UNCH, India's Sensex: +0.5%, South Korea's Kospi: -0.8%, Australia's ASX All Ordinaries: -0.7%.

In news:

• South China Morning Post reported that Chinese state-owned computing companies have been told to source more than half of their chips from domestic suppliers.
• SoftBank announced a $2 bln investment in Intel (INTC).
• The Reserve Bank of New Zealand is expected to announce a 25-basis point cut to 3.00% when it meets tonight.

In economic data:

• Hong Kong's July Unemployment Rate 3.7% (last 3.5%)
• Australia's August Westpac Consumer Sentiment 5.7% (last 0.6%)
• New Zealand's Q2 Input PPI 0.6% qtr/qtr (expected 1.4%; last 2.9%) and Output PPI 0.6% qtr/qtr (expected 1.0%; last 2.1%)

Major European indices trade in the green. STOXX Europe 600: +0.4%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.5%.

In news:

• Yesterday's visit of European leaders to the White House is expected to be followed with a trilateral meeting between leaders from the U.S., Russia, and Ukraine, though a specific time has not been set yet.
• The British government may implement a tax on home sales over GBP500,000 as it continues seeking new revenue.

In economic data:

• Eurozone's June Current Account surplus EUR35.8 bln (expected surplus of EUR33.4 bln; last surplus of EUR32.3 bln)