Stock Market Update

Equity futures point to a higher opening as stocks look to expand on yesterday's rally that has the major averages back to a mostly higher week-to-date standing. The major averages were supported by a rebound across semiconductor names, while an easing of geopolitical tensions between the U.S. and Iran sent oil prices lower, paving the way for solid gains in the broader market.

Oil continues to move lower towards the $85 per barrel mark this morning on reports that the two sides could agree to a deal as early as Sunday that would include the reopening of the Strait of Hormuz and Iran's commitment to not enrich uranium for a period of years.

Today's session will also include the eagerly anticipated IPO of SpaceX. A filing yesterday showed the company will sell 555.6 million shares at $135 per share, making it the largest IPO in history and putting the company's valuation at $1.77 trillion. Enthusiasm around the IPO has sent other space and rocket names sharply higher in recent sessions, though some analysts have posited it could be responsible for the recent choppiness across tech and mega-cap names, as investors look for a source of funds to reallocate.

In corporate news:

• Adobe (ADBE 202.85, -15.97, -7.3%) beat EPS expectations by $0.14, beat revenue expectations, guided Q3 revenues above consensus, and guided FY26 EPS and revenues above consensus. The company's CFO is departing for a chipmaking company.
• Lennar (LEN 94.00, -0.95, -1.0%) reported EPS in-line, missed revenue expectations, reported a 2% increase in year-over-year deliveries, and expects Q3 deliveries to be between 21,000 and 22,000.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a broadly higher note, encouraged by Thursday's rebound on Wall Street. Japan's Nikkei: +2.8%, Hong Kong's Hang Seng: +1.9%, China's Shanghai Composite: +1.1%, India's Sensex: +2.3%, South Korea's Kospi: +4.6%, Australia's ASX All Ordinaries: +1.9%.

In news:

• President Trump said that the U.S. made "a great settlement" with Iran while Israel's Prime Minister Netanyahu said that Israel is not a party to the U.S.-Iran agreement.
• The Bank of Japan is expected to announce its next rate hike next week while the Reserve Bank of Australia is expected to announce a policy hold.
• Elsewhere, Bank of Korea Governor Shin said that interest rates need to be raised "before it is too late."

In economic data:

• China's May New Loans CNY520.0 bln (expected CNY450.0 bln; last -CNY10.0 bln), May Outstanding Loan Growth 5.5% yr/yr, as expected (last 5.6%), and May total social financing CNY2.03 trln (expected CNY1.87 trln; last CNY620.0 bln)
• Japan's April Industrial Production 0.5% m/m (expected 0.8%; last -0.4%) and Capacity Utilization -0.8% m/m (last -1.2%)
• New Zealand's May Business PMI 49.9 (last 50.4)
• India's May CPI 3.93% yr/yr (expected 4.0%; last 3.5%)

Major European indices are seeking a higher finish to the week, encouraged by news of a memorandum of understanding between the U.S. and Iran that is expected to result in a final peace deal. STOXX Europe 600: +1.5%, Germany's DAX: +1.6%, U.K.'s FTSE 100: +1.2%, France's CAC 40: +1.8%, Italy's FTSE MIB: +1.9%, Spain's IBEX 35: +2.2%.

In news:

• The U.K. reported weak GDP growth for April, resulting in some pressure on rate expectations.
• The market expects the European Central Bank to hold its policy steady in July unless there is a renewed rise in energy prices.
• Germany's Economic Ministry noted that momentum in the domestic economy slowed notably in Q2.

In economic data:

• Germany's final May CPI -0.2% m/m, as expected (last 0.6%); 2.6% yr/yr, as expected (last 2.9%)
• U.K.'s April GDP -0.1% m/m, as expected (last 0.3%); 1.2% yr/yr (expected 1.3%; prior 1.2%). April Manufacturing Production 0.4% m/m (expected -0.2%; last 1.2%), April trade deficit GBP26.05 bln (expected deficit of GBP22.50 bln; last deficit of GBP27.22 bln), April Industrial Production 0.0% m/m (expected 0.1%; last -0.2%); -0.2% yr/yr (expected -0.1%; last 0.0%). April Manufacturing Production 0.4% m/m (expected -0.2%; last 1.2%); 1.0% yr/yr (expected 0.4%; last 1.2%)
• France's final May CPI 0.1% m/m, as expected (last 1.0%); 2.4% yr/yr, as expected (last 2.2%)
• Spain's May CPI 0.1% m/m, as expected (last 0.4%); 3.2% yr/yr, as expected (last 3.2%). May Core CPI 3.0% yr/yr (expected 2.9%; last 2.8%)