Stock Market Update

Equity futures point to a mostly higher open this morning ahead of what has the makings of another eventful session.

The major averages finished mostly higher in yesterday's action, with solid tech leadership pushing the S&P 500 to fresh record highs, while the Nasdaq Composite outperformed. The DJIA entered the session less than 0.5% below its own record high, but a disappointing 2027 Medicare Advantage Proposal sent UnitedHealth (UNH) sharply lower, weighing heavily on the index. 

Market participants are in the midst of another sizable batch of earnings reports this morning, with around 100 S&P 500 components set to report by the end of the week. After the close, the market will receive the reports from three of the "magnificent seven" names: Meta Platforms (META), Microsoft (MSFT), and Tesla (TSLA). Mega-cap stocks have put together three consecutive sessions of solid leadership into the earnings, helping the S&P 500 notch fresh records. 

Today will also bring about a decision from the January FOMC meeting, though the decision itself is not expected to be a market mover, with the market having nearly fully priced in no change to the Fed Funds target rate for quite some time. As always, Fed Chair Powell's press conference portion of the event will be watched closely for any signs of changes to the Fed's expected policy path.

In Washington, Republicans and the White House are trying to broker a deal with Democrats on immigration enforcement so a partial government shutdown can be avoided, according to The Wall Street Journal. 

The MBA Mortgage Applications Index for the week ended January 24 decreased 8.5%, from a prior increase of 14.1%. 

In corporate news:

• ASML (ASML 1,534.55, +79.96, +5.5%) misses by €0.23, beats on revs, guides Q1 revs above consensus, guides FY26 revs in-line, and announces a new share buyback program. 
• GE Vernova (GEV 684.75, -7.95, -1.2%) beat revenue expectations and raised FY26 revenue guidance above consensus. 
• China approves the purchase of NVIDIA (NVDA 192.36, +3.84, +2.0%) H200 chips, according to The Wall Street Journal. 
• Starbucks (SBUX 101.00, +5.28, +5.5%) missed EPS expectations by $0.03, beat revenue expectations, saw global comparable store sales increase 4%, and guided FY26 EPS in line. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly higher showing on Wednesday with South Korea's Kospi (+1.7%) reaching another fresh record while Hong Kong's Hang Seng (+2.6%) finished at a level not seen since July 2021. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: +2.6%, China's Shanghai Composite: +0.3%, India's Sensex: +0.6%, South Korea's Kospi: +1.7%, Australia's ASX All Ordinaries: -0.2%.

In news:

• Japan sold 40-yr JGBs to good demand.
• Australia's December CPI (3.6%) was hotter than expected, boosting expectations for a rate hike next week.
• Indonesia's stock market lost more than 7.0% after MSCI paused additions to its index due to "fundamental investability issues."

In economic data:

• Australia's December CPI 3.6% yr/yr (expected 3.4%; last 3.5%)
• India's December Industrial Production 7.8% yr/yr (expected 5.5%; last 7.2%) and December Manufacturing Output 8.1% m/m (last 8.5%)

Major European indices trade in the red with Spain's IBEX (-1.5%) leading to the downside as it reverses from a record high. STOXX Europe 600: -0.7%, Germany's DAX: -0.7%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -1.5%, Italy's FTSE MIB: -1.1%, Spain's IBEX 35: -1.6%.

In news:

• Luxury names are among the laggards after LVMH reported weak sales growth for Q4.
• Chip fabrication equipment specialist ASML reported strong results and guidance.
• European Central Bank policymaker Cipollone said the European economy has been resilient and that some upside data surprises are expected.

In economic data:

• Germany's February GfK Consumer Climate -24.1 (expected -25.5; last -26.9)
• Italy's January Consumer Confidence 96.8 (expected 97.0; last 96.6) and Business Confidence 89.2 (expected 89.0; last 88.5)
• Swiss January ZEW Expectations -4.7 (last 6.2)