Stock Market Update

Equity futures point to a lower opening this morning after the major averages set fresh record highs in Monday’s action. Leadership was narrowly concentrated across tech names, while the broader market moved lower after reports that Iran stopped messaging the U.S. in protest of Israel's strikes in Lebanon.

Axios reports that President Trump lashed out at Israeli Prime Minister Benjamin Netanyahu over Israel's war in Lebanon, though the current geopolitical situation remains relatively unchanged from yesterday

Meanwhile, tech names are poised to extend recent gains, with Hewlett Packard Enterprise (HPE 59.64, +12.64, +26.9%) being the latest AI-infrastructure name to rocket higher after a blowout earnings report.

On the data front, the market will receive the April JOLTS job openings report at 10:00 a.m.

In corporate news:

• Alphabet (GOOG 362.25, -10.33, -2.8%) proposed an $80 billion equity capital raise to expand AI infrastructure and compute.
• Hewlett Packard Enterprise (HPE 59.64, +12.64, +26.9%) beat EPS expectations by $0.26, beat revenue expectations, guided Q# and FY26 EPS and revenues above consensus.
• NVIDIA (NVDA 227.70, +2.84, +1.3%) CEO Jensen Huang says Marvell (MRVL 263.50, +44.07, +19.7%) is the next trillion-dollar company, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region closed Tuesday's session on a relatively mixed note, largely brushing off concerns about Iran and stubbornly high energy prices. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: +2.5%, China's Shanghai Composite: +0.4%, India's Sensex: +0.5%, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: flat.

In news:

• Hong Kong's Hang Seng (+2.5%) was the standout winner, bolstered by AI enthusiasm and optimism regarding the property market.
• The AI trade has been pushed along by the start of Computex 2026 in Taiwan, which will run June 2-5 and will key on AI's evolving capabilities.
• Chatter about a possible rate hike by the Bank of Korea was ignited by a hotter-than-expected CPI report for May that featured the highest annualized rate (3.1%) since early 2024.
• The Bank of Korea is expecting the inflation rate to maintain a 3-handle for some time.
• Notably, the PBOC's open market operations included a fund injection of just CNY200 mln, which was the smallest OMO since 2015.

In economic data:

• Japan's May Monetary Base -12.2% yr/yr (expected -9.5%; last -11.3%)
• Hong Kong's April Retail Sales 8.6% yr/yr (last 12.8%)
• South Korea's May CPI 0.5% m/m (expected 0.3%; last 0.5%) and 3.1% yr/yr (expected 3.0%; last 2.6%)
• Australia's Q1 Current Account Balance -AUD27.1 bln (expected -AUD23.1 bln; last -AUD23.0 bln); April Building Approvals -3.4% m/m (expected -1.5%; last -10.5%); Q1 Business Inventories 0.5% (last -0.1%)

Major European indices are trading with some positive energy ahead of the U.S. open, aided by sliding energy prices and ongoing enthusiasm about AI-related stocks. STOXX Europe 600: +0.7%, Germany's DAX: +1.0%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +0.8%, Italy's FTSE MIB: +1.2%, Spain's IBEX 35: +0.8%.

In news:

• They have clearly brushed off worries about inflation as a trading catalyst, as this morning's data showed CPI running at 3.2% yr/yr and core CPI at 2.5%. Those readings are reportedly solidifying expectations of a rate hike by the ECB.
• Higher energy costs were the main driver of CPI inflation.
• There are reports that the European Commission is discussing plans to allow countries more fiscal flexibility as they deal with attempts to mitigate the impact of higher energy costs.
• Notably, sovereign bond yields are lower in the wake of the inflation report.