Stock Market Update

Equity futures point to a mostly higher open for the major averages after yesterday's advance put the S&P 500 and Nasdaq Composite within striking distance of their all-time high levels.

Stocks moved higher yesterday as rate cut expectations firmed ahead of the September FOMC meeting. Today's release of the August Nonfarm Payroll Report will be an important metric amid some recent cooling in the labor market. 

Investors have a small but diverse batch of earnings reports from yesterday afternoon to digest, with Broadcom (AVGO 339.00, +32.90, +10.8%) a notable winner, while Lululemon Athletica (LULU 166.50, -39.59, -19.2%) trades lower in the pre-market.

After a relatively quiet week of trade developments, several notable headlines crossed the wires this morning. Reuters reports that President Trump stated tariffs will be imposed on semiconductor companies that do not move production to the U.S.

CNBC reports that a trade deal between the U.S. and Japan has been finalized, which features a 15% baseline tariff on Japanese imports, while the Japanese government will invest $550 billion into projects of the U.S. government's choosing.

In corporate news:

• Alphabet (GOOG 232.39, -0.37, -0.2%) will pay out nearly $500 million for secretly collecting data, according to Courthouse News.
• Boeing (BA 231.49, +0.74, +0.3%) looks to permanently replace striking workers, according to Reuters. 
• Broadcom (AVGO 339.00, +32.90, +10.8%) beat EPS expectations by $0.03, reported revs in-line, reported AI semiconductor revenue above guidance, and guided Q4 revenues above consensus.
• Lululemon Athletica (LULU 166.50, -39.59, -19.2%) beat EPS expectations by $0.24, reported revenues in-line, guided Q3 EPS below consensus and revenues below consensus, and guided FY26 EPS below consensus, with revenues below consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Japan's Nikkei: +1.0%, Hong Kong's Hang Seng: +1.4%, China's Shanghai Composite: +1.2%, India's Sensex: UNCH, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: +0.5%.

In news:

• Japan's trade deal with the U.S. has been finalized, reducing the tariff on Japanese auto imports to 15% from 27.5%.
• Japan's real wages increased for the first time in seven months in August.
• China will implement a 78% tariff on imports of U.S. fiber optic products, according to Caixin.
• China Securities Journal speculated that the People's Bank of China will inject liquidity into money markets this month.

In economic data:

• Japan's July Household Spending 1.7% m/m (expected 1.3%; last -5.2%); 1.4% yr/yr (expected 2.2%; last 1.3%). July Overall Wage Income 4.1% yr/yr (expected 3.0%; last 3.1%) and Overtime Pay 3.3% yr/yr (last 0.5%). July Leading Index 105.9 (expected 105.8; last 105.6) and Coincident Indicator -2.6% m/m (last 0.3%)
• Singapore's July Retail Sales 4.1% m/m (last -1.1%); 4.8% yr/yr (last 2.4%)

Major European indices trade in the green. STOXX Europe 600: +0.3%, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.

In news:

• The European Central Bank will meet next week, but another rate cut is not expected until later in the year.
• The U.K. reported above-consensus Retail Sales growth for July (0.6%; expected 0.3%), but the timing of the next rate cut from the Bank of England remains uncertain.
• French Prime Minister Bayrou will face a confidence vote on Monday.

In economic data:

• Eurozone's Q2 GDP 0.1% qtr/qtr, as expected (last 0.6%); 1.5% yr/yr (expected 1.4%; last 1.5%). Q2 Employment Change 0.1% qtr/qtr, as expected (last 0.2%); 0.6% yr/yr (expected 0.7%; last 0.7%)
• Germany's July Factory Orders -2.9% m/m (expected 0.5%; last -0.2%)
• U.K.'s July Retail Sales 0.6% m/m (expected 0.3%; last 0.3%); 1.1% yr/yr (expected 1.3%; last 0.9%). July Core Retail Sales 0.5% m/m (expected 0.4%; last 0.6%); 1.3% yr/yr (expected 1.2%; last 1.3%). August Halifax House Price Index 0.3% m/m (expected 0.2%; last 0.4%); 2.2% yr/yr (expected 2.0%; last 2.5%)
• France's July trade deficit EUR5.6 bln (expected deficit of EUR7.3 bln; last deficit of EUR7.2 bln). July Current Account deficit EUR2.50 bln (last deficit of EUR2.30 bln)
• Italy's July Retail Sales 0.0% m/m (expected 0.2%; last 0.7%); 1.8% yr/yr (last 1.1%)
• Swiss August SECO Consumer Climate -40 (expected -37; last -33