Stock Market Update

Equity futures point to a lower opening this morning after the major averages finished mostly lower in yesterday's trade. Mega-cap and tech stocks faced another session of considerable pressure, with semiconductors among the worst performers yesterday. Meanwhile, select defensive and cyclical sectors garnered some strong rotational interest, helping somewhat ease losses at the index level. 

Alphabet (GOOG 318.64, -14.70, -4.4%) is under pressure after beating earnings estimates, with investors showing caution after the company guided for FY26 capital expenditure of $175-$185 billion. However, the massive spending plans are seen as a positive for the broader AI trade, sending select chipmakers and related stocks higher in the premarket. 

There are plenty of other earnings reports for investors to assess this morning, with over 100 S&P 500 companies set to report by the end of the week.

Elsewhere, the price of oil is falling this morning as diplomatic discussions between the U.S. and Iran are now once again set to take place in Oman tomorrow, according to The New York Times. 

Bitcoin is also moving lower, with a sharp intraday retreat coinciding with the stock market's worst levels of the session. The cryptocurrency has moved below the $70,000 mark this morning. 

This morning also brings about some important labor market data. In addition to the weekly initial claims report (Briefing.com consensus 210K) at 8:30 a.m. ET, the December Job Openings and Labor Turnover report, which was initially scheduled to be released on Tuesday, will be released at 10:00 a.m. ET. 

In corporate news:

• Alphabet (GOOG 318.64, -14.70, -4.4%) beat EPS expectations by $0.19, beat revenue expectations, and reported Google Cloud growth of 48%. The company guided for FY26 capital expenditure of $175-$185 billion.
• Qualcomm (QCOM 131.90, -16.99, -11.4%) beat EPS expectations by $0.11 and reported revenues in-line. The company guided Q2 EPS below consensus with revenues below consensus. 
• SpaceX is mulling an early index entry for its massive IPO, according to The Wall Street Journal. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a lower note with South Korea's Kospi (-3.9%) pulling back from its blistering start to 2026. Japan's Nikkei: -0.9%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: -0.6%, India's Sensex: -0.6%, South Korea's Kospi: -3.9%, Australia's ASX All Ordinaries: -0.5%.

In news:

• Precious metals had a volatile night, contributing to overall caution among investors.
• There was some speculation that Japan's Prime Minister Takaichi might not live up to her pledge to cut taxes on food due to worries about the fiscal impact.
• Expectations for a near-term reserve requirement ratio cut from the People's Bank of China are on the low side, though the potential for a cut in the second quarter remains alive.

In economic data:

• Australia's December trade surplus AUD3.373 bln (expected surplus of AUD3.420 bln; last surplus of AUD2.597 bln). December Imports -0.8% m/m (last -0.2%) and Exports 1.0% m/m (last -4.0%)
• Singapore's December Retail Sales -5.4% m/m (last -0.2%); 2.7% yr/yr (last 6.2%)

Major European indices trade in the red. STOXX Europe 600: -0.8%, Germany's DAX: -1.1%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.9%, Spain's IBEX 35: -1.5%.

In news:

• Military contractor Rheinmetall has been pressured by weak guidance while shipper Maersk announced that some corporate positions will be cut and confirmed resumption of transit through the Red Sea.
• The Bank of England voted 5-4 to keep its bank rate at 3.75%, which was expected.
• The European Central Bank will release its own policy statement at 8:15 ET, but it too is expected to keep policy steady.
• There has been some speculation that European Central Bank President Lagarde could try to talk down the euro after the single currency reached its highest level against the dollar since mid-2021.

In economic data:

• Eurozone's December Retail Sales -0.5% m/m (expected -0.2%; last 0.1%); 1.3% yr/yr (expected 1.6%; last 2.4%)
• Germany's December Factory Orders 7.8% m/m (expected -1.8%; last 5.7%)
• U.K.'s January S&P Global Construction PMI 46.4 (expected 42.2; last 40.1)
• France's December Industrial Production -0.7% m/m (expected 0.2%; last 0.1%)
• Italy's December Retail Sales -0.8% m/m (expected -0.4%; last 0.5%); 0.9% yr/yr (last 1.3%)