Stock Market Update

Equity futures point to a flat open after yesterday's rally pushed the major averages to record highs on strong tech leadership and relatively broad strength elsewhere.

Small-caps fared particularly well as further rate cut expectations solidified after Wednesday's FOMC meeting, with the Russell 2000 finally joining its larger counterparts in record territory this year.

Headlines are relatively quiet this morning as the major averages look to close positive for the week, with only the Nasdaq Composite holding a week-to-date gain wider than 1.0%. 

On the trade front, President Trump and Chinese President Xi are set to speak on a call at 9:00 am ET, which will likely finalize a deal to bring TikTok under the control of a consortium of U.S. companies, according to Bloomberg. 

In Washington, Politico reports that House Republicans plan to pass a continuing resolution to fund the government today and then leave town until after October 1st, forcing the Senate to either pass the bill or shut down the government.

In corporate news:

• Apple's (AAPL 240.70, +2.82, +1.2%) iPhone 17 has gone on sale internationally today.
• FedEx (FDX 233.90, +7.40, +3.3%) beats EPS expectations by $0.22, beats revenue expectations, and guides FY26 EPS in-line with revenues above consensus.
• Intel (INTC 30.35, -0.22, -0.7%) downgraded to Sell from Neutral at Citigroup with a target of $29.
• Lennar (LEN 129.16, -3.71, -2.8%) beats EPS expectations by $0.19 and misses on revenues. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mixed note with Japan's Nikkei (-0.6%) and South Korea's Kospi (-0.5%) hitting fresh records before reversing. Japan's Nikkei: -0.6%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -0.3%, India's Sensex: -0.5%, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: +0.3%.

In news:

• The Bank of Japan left its policy rate at 0.50%, as expected, though two policymakers voted in favor of an increase.
• The central bank announced a plan to sell its ETF holdings at JPY330 bln per year while J-REITS will be sold at a pace of JPY5.5 bln per year.
• The market sees some potential for another hike in October and expects that hike to be made no later than January.
• President Trump is expected to speak with China's President Xi this morning.
• Softbank is reportedly reducing the headcount in its Vision Fund by up to 20%.

In economic data:

• Japan's August National CPI 0.1% m/m (last 0.1%); 2.7% yr/yr (last 3.1%). National Core CPI 2.7% yr/yr, as expected (last 3.1%)
• New Zealand's August trade deficit NZD1.19 bln (expected deficit of NZD746 mln; last deficit of NZD716 mln). August Credit Card Spending 3.5% yr/yr (last 1.6%)

Major European indices are on track for a mostly higher finish to the week. STOXX Europe 600: -0.2%, Germany's DAX: -0.2%, U.K.'s FTSE 100: UNCH, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: +0.5%.

In news:

• Spain's economy minister called on the EU to "engage" China to reduce the EU's trade deficit with China.
• Stellantis trades firmly higher after being upgraded at Berenberg.
• European Central Bank policymaker Centeno said that inflation risks remain tilted to the downside and that inflation below 2.0% can't be tolerated for too long.
• UBS, Morgan Stanley, and Bank of America no longer expect the Bank of England to cut its bank rate before the end of the year.

In economic data:

• Germany's August PPI -0.5% m/m (expected -0.1%; last -0.1%); -2.2% yr/yr (expected -1.8%; last -1.5%)
• U.K.'s August Retail Sales 0.5% m/m (expected 0.4%; last 0.5%); 0.7% yr/yr (expected 0.6%; last 0.8%). August Core Retail Sales 0.8% m/m (expected 0.3%; last 0.4%); 1.2% yr/yr (expected 0.8%; last 1.0%). August Public Sector Net Borrowing GBP18.00 bln (expected GBP12.80 bln; last GBP1.05 bln)
• France's September Business Survey 96, as expected (last 97)