Stock Market Update

Equity futures point to a higher opening this morning as the market attempts to look past the latest ramp in geopolitical hostilities.

The S&P 500 and Nasdaq Composite notched record highs yesterday morning amid strength in software and select mega-cap names, but the major averages finished lower following an intraday bounce in oil prices. The U.S. and Iran exchanged fire yesterday in the Strait of Hormuz, but President Trump told reporters that it did not constitute a breach of the current ceasefire, according to The New York Times.

Oil is slightly higher this morning, hovering around the $95 per barrel mark.

Elsewhere, the market has another batch of earnings reports to wrap up a busy week on the earnings front that acted as a major catalyst for the recent push to record highs.

The market also has an important data release on the calendar this morning in the form of the April Employment Situation Report. The report is always closely watched for its potential rate-cut implications, though the surge in energy prices due to the war in Iran has pushed out the market's rate cut expectations significantly.

In corporate news:

• The White House is distancing itself from increased artificial intelligence regulation, according to Politico.
• Airbnb (ABNB 140.74, +0.28, +0.2%) missed EPS expectations by $0.04, beat revenue expectations, and guided Q2 revenues above consensus.
• Akami Technologies (AKAM 143.00, +26.31, +22.5%) beat EPS expectations and reported revenues in-line. The company said that a leading frontier model provider has committed to $1.8 billion over seven years for CIS.

Equity indices in the Asia-Pacific region ended the week on a mostly lower note with Japan's Nikkei (-0.2%) tagging a fresh record while South Korea's Kospi (+0.1%) also extended its push into record territory, recording a slim gain. Japan's Nikkei: -0.2%, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: UNCH, India's Sensex: -0.7%, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: -1.4%.

In news:

• Kospi saw its biggest single-day foreign outflow of nearly $5 bln yesterday.
• Malaysia's central bank left its policy rate at 2.75%, as expected, while Indonesia's central bank warned about a big intervention to support the rupiah.

In economic data:

• Japan's April Services PMI 51.0 (expected 51.2; last 53.4). March Overall Wage Income 2.7% yr/yr (expected 3.2%; last 3.4%) and Overtime Pay 1.9% yr/yr (last 3.4%)
• South Korea's March Current Account surplus $37.33 bln (last surplus of $23.19 bln)

Major European indices are on track for a mostly lower finish to the week. STOXX Europe 600: -0.5%, Germany's DAX: -0.9%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.8%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.4%.

In news:

• Maersk CEO said that he has not observed any demand destruction due to the conflict with Iran with volumes returning to levels from the start of the year.
• President Trump gave the EU a July 4 deadline to fulfill the trade agreement or face higher tariffs.
• Local elections in the U.K. resulted in a trouncing for the ruling Labour party and big losses for Conservative opposition while Reform had the best showing.
• Prime Minister Starmer said today that he will not resign despite the public's sharp turn against his party but calls for his departure are growing louder.
• Secretary of State Rubio is meeting with Italy's Prime Minister Meloni today.

In economic data:

• Germany's March trade surplus EUR14.3 bln (expected surplus of EUR17.8 bln; last surplus of EUR19.5 bln). March Imports 5.1% m/m (expected 0.8%; last 4.9%) and Exports 0.5% m/m (expected -1.7%; last 3.6%). March Industrial Production -0.7% m/m (expected 0.4%; last -0.5%); -3.0% yr/yr (last -0.3%)
• Spain's March Industrial Production 1.8% yr/yr (last -0.9%)
• Swiss Q2 SECO Consumer Climate -40 (expected -46; last -30)