Stock Market Update

Equity futures are slightly higher this morning after a Tuesday session that saw stocks drift for most of the day before a modest afternoon rally resulted in decent gains across the major averages.

The market remains focused on rate cut expectations at the September FOMC meeting, which held steady yesterday as President Trump's firing of Fed Governor Lisa Cook (and her expected legal challenge to this firing) received extensive coverage. 

Politico reports that the Senate Banking Committee will hold a hearing for Fed Governor nominee Stephen Miran next week, with reports yesterday suggesting President Trump will look to move Mr. Miran to Fed Governor Lisa Cook's seat if her firing holds up, since her term is longer.

Headlines are relatively quiet elsewhere, as the market largely awaits Friday's PCE report, which is an important piece of inflation data as the Fed weighs a rate cut in the near term.

Several retail companies reported earnings with mixed results, though none are as anticipated as NVIDIA's (NVDA 182.98, +1.21, +0.7%) earnings after the close today. 

On the trade front, Bloomberg reports that the EU will fast-track legislation this week that will remove tariffs on industrial goods. Several tariff-related headlines crossed the wire yesterday before the open, but none have had an effect on the broader market this week. 

The MBA Mortgage Applications Index for the week of August 23 fell 0.5% after last week's 1.4% dip.

In corporate news:

• Abercrombie & Fitch (ANF 96.40, -0.34, -0.4%) beat EPS expectations by $0.02, beat revenue expectations, guided Q3 EPS below consensus, guided Q3 revenues above consensus, and raised FY26 EPS and revenue guidance. 
• Boeing (BA 234.90, +0.07, +0.0%) put contract negotiations on hold with striking machinists, according to Reuters. 
• Eli Lilly (LLY 743.50, +7.47, +1.0%) announced positive topline results for its Verzenio (abemaciclib) which increased overall survival in HR+, HER2-, high-risk early breast cancer with two years of therapy. The stock was also upgraded to Buy from Hold at HSBC with a target of $50. 
• Foot Locker (FL 26.39, -0.10, -0.4%) missed EPS expectations by $0.34 and reported revenues in line.
• Kohl's (KSS 15.50, +2.46, +18.9%) beat EPS expectations by $0.26, reported revenues in-line, and guided FY26 EPS above consensus and revenues below consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note while markets in India were closed for a holiday. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: -1.8%, India's Sensex: HOLIDAY, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: +0.3%.

In news:

• Chipmakers in Japan had a strong showing ahead of tonight's release of quarterly results from chip giant NVIDIA (NVDA).
• Australia's CPI for July (2.8% yr/yr; expected 2.3%) was much hotter than expected due to sharp increases in prices of housing, food, and alcohol/tobacco.
• Sinolink Securities is expected to raise the funding margin deposit ratio for new clients to 100% amid concerns that a bubble is forming in Chinese equities.

In economic data:

• China's July Industrial Profit -1.7% YTD (last -1.8%)
• South Korea's August Manufacturing BSI Index 70 (last 68)
• Australia's July MI Leading Index 0.1% m/m (last 0.0%). July Monthly CPI Indicator 2.8% yr/yr (expected 2.3%; last 1.9%). Q2 Construction Work Done 3.0% qtr/qtr (expected 1.0%; last -0.3%)

Major European indices are mixed. STOXX Europe 600: +0.1%, Germany's DAX: -0.3%, U.K.'s FTSE 100: flat, France's CAC 40: +0.5%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: -0.3%.

In news:

• Germany's consumer confidence weakened in September (to -23.6 from -21.7) due to weak household spending and low expectations for a recovery.
• Meanwhile, Switzerland's ZEW Expectations survey plunged to -53.8 from 2.4 due to concerns about new trade barriers with the U.S.
• There are growing concerns that France will need a bailout from the IMF if the country's prime minister does not survive the upcoming confidence vote.
• Hungary's central bank left its policy rate unchanged at 6.50%.

In economic data:

• Germany's September GfK Consumer Climate -23.6 (expected -21.5; last -21.7)
• U.K.'s August CBI Distributive Trades Survey -32 (expected -26; last -34)
• Swiss August ZEW Expectations -53.8 (last 2.4)