Stock Market Update

Equity futures point to a lower opening this morning as mega-cap and tech stocks are poised for a continuation of yesterday's weakness. Losses across growth stocks pushed the major averages to a mostly lower finish in Monday's session, though the indices ended well off their worst levels. The broader market provided solid support, which helped ease some concerns surrounding the market's recent narrow leadership.

Additionally, the market received a late-session boost in the form of a Truth Social post from President Trump, in which he said the U.S. will postpone planned strikes on Iran at the request of neighboring Gulf leaders while negotiations continue. Geopolitical headlines are relatively muted this morning, and oil prices are modestly lower.

Treasuries followed last week's sharp selloff and surge in yields with a quieter session on Monday, and yields are little changed so far this morning. Still, the recent jump in oil prices and renewed inflation concerns continue to cloud the rate outlook. 

In corporate news:

• Analog Devices (ADI 413.10, -5.48, -1.3%) is nearing an agreement to acquire Empower Semiconductor, according to Bloomberg.
• Home Depot (HD 298.46, -1.36, -0.5%) beat EPS expectations by $0.02, reported revenues in-line, and reaffirmed FY27 EPS and revenue guidance.
• Intel (INTC 106.80, -1.37, -1.3%) and Qualcomm (QCOM 198.92, -4.72, -2.3%) are interested in the acquisition of Tenstorrent, according to Bloomberg.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had mixed showing on Tuesday with South Korea's Kospi (-3.3%) deepening its retreat from a record amid concerns about a potential employee strike at Samsung. Japan's Nikkei: -0.5%, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: +0.9%, India's Sensex: -0.2%, South Korea's Kospi: -3.3%, Australia's ASX All Ordinaries: +1.1%.

In news:

• Japanese debt slid to fresh lows for the year ahead of tomorrow's 20-yr JGB auction.
• Meanwhile, the Bank of Japan is expected to meet with JGB investors on Thursday and Friday.
• Reserve Bank of Australia's chief economist warned that inflation risks are drifting higher.

In economic data:

• Japan's Q1 GDP 0.5% qtr/qtr (expected 0.4%; prior 0.2%); 2.1% yr/yr (expected 1.7%; last 0.8%). Q1 GDP Price Index 3.4% yr/yr (expected 3.1%; prior 3.4%), GDP External Demand 0.3% qtr/qtr (expected 0.2%; prior 0.0%), GDP Capital Expenditure 0.3% qtr/qtr (expected 0.2% prior 1.4%), GDP Private Consumption 0.3% qtr/qtr (expected 0.2%; prior 0.0%). March Industrial Production -0.4% m/m (expected -0.5%; prior -2.0%) and Capacity Utilization -1.2% m/m (prior -0.1%). March Tertiary Industry Activity Index 16.5 (expected -0.4; prior -1.1)
• Hong Kong's April Unemployment Rate 3.7% (prior 3.7%)
• Australia's May Westpac Consumer Sentiment 3.5% (prior -12.5%)
• New Zealand's Q1 Input PPI 1.4% (expected 0.8%; prior -0.5%) and Output PPI 0.8% qtr/qtr (expected 0.5%; last 0.1%). April Electronic Card Retail Sales -1.3% m/m (prior 0.7%); 2.0% yr/yr (last 2.7%)

Major European indices trade in the green. STOXX Europe 600: +0.8%, Germany's DAX: +1.3%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +0.5%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: +0.2%.

In news:

• The EU's Economic Commissioner Dombrovskis said that G-7 has made progress on critical minerals.
• Elsewhere, Bank of England policymaker Breeden spoke about the potential benefits of tokenization.
• The EU is looking at ways to counter food inflation.
• The U.S. Treasury extended a temporary sanction waiver on Russian seaborne oil.

In economic data:

• Eurozone's March trade surplus EUR7.8 bln (expected EUR5.4 bln; prior EUR11.1 bln)
• U.K.'s March three-month employment change 148,000 (expected 107,000; prior 25,000), March Unemployment Rate 5.0% (expected 4.9%; prior 4.9%), March Average Earnings Index + Bonus 4.1% (expected 3.8%; prior 3.9%), and April Claimant Count Change 26,500 (expected 23,100; prior 4,900). Q4 Labor Productivity -0.5% (prior -0.5%)