Stock Market Update

Equity futures point to a lower opening this morning, as semiconductor stocks face sharp losses in the premarket. The group was a point of strength in yesterday's session, though pronounced weakness across other mega-cap tech names pushed the major averages to a mostly lower finish.

The selloff comes without a specific catalyst, but losses are particularly sharp across red-hot memory names such as Micron (MU 1,128.00, -83.38, -7.0%), which reports earnings after the close tomorrow.

Global markets have been hit hard by the tech unwind, with South Korea's Kospi falling 10%.

Headlines are relatively quiet elsewhere, with few updates to the U.S.-Iran talks after yesterday's reports of progress, keeping oil prices stable under $74 per barrel.

In corporate news:

• BP (BP 39.40, -0.38, -1.0%) and others will face a lawsuit that says the companies used AI to boost California gas prices, according to Reuters.
• Oracle (ORCL 171.20, -3.87, -2.2%) reduced its workforce by 21,000 according to Reuters.
• Qualcomm (QCOM 208.50, -13.40, -6.0%) is in discussions to acquire AI-software firm Modular, according to Bloomberg.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a poor showing on Tuesday with South Korea's Kospi (-10.0%) being decimated while Japan's Nikkei (-3.6%) also fell sharply from its record high. Japan's Nikkei: -3.6%, Hong Kong's Hang Seng: -1.8%, China's Shanghai Composite: -1.4%, India's Sensex: -1.2%, South Korea's Kospi: -10.0%, Australia's ASX All Ordinaries: -0.5%.

In news:

• South Korea's top chipmakers are expected to announce their domestic investment plans on Thursday.
• MSCI is expected to announce its decision about a potential downgrade to Indonesia's market status tomorrow.
• The Japanese yen edged up off this year's low against the dollar after it was reported that Japan's Finance Minister Katayama held a lengthy phone call with Treasury Secretary Bessent.

In economic data:

• Japan's flash June Manufacturing PMI 54.9 (expected 54.5; last 54.5) and flash June Services PMI 51.8 (last 50.0). April BoJ Core CPI 2.7% yr/yr (last 2.8%)
• South Korea's June Consumer Confidence 106.6 (last 106.1)
• Australia's flash June Manufacturing PMI 51.2 (last 50.7) and flash June Services PMI 49.9 (last 48.7)
• Hong Kong's May CPI 0.0% m/m (last -0.1%); 2.0% yr/yr (last 1.7%)
• Singapore's May CPI 0.7% m/m (last -0.3%); 1.8% yr/yr (expected 2.0%; last 1.8%) and Core CPI 1.4% yr/yr (expected 1.6%; last 1.4%)
• India's flash June Manufacturing PMI 54.5 (last 55.0) and flash June Services PMI 57.3 (last 59.8)

Major European indices trade in the red. STOXX Europe 600: -0.9%, Germany's DAX: -1.0%, U.K.'s FTSE 100: -0.6%, France's CAC 40: -0.7%, Italy's FTSE MIB: -1.3%, Spain's IBEX 35: -0.7%.

In news:

• Flash June PMI readings from the region's major economies were mixed with roughly half of the readings coming in below 50.0, indicating ongoing contraction in activity.
• European Central Bank Chief Economist Lane said that he expects energy prices to keep inflation firmly above target into the first half of next year.
• German Chancellor Merz said that pension reforms will be implemented, including a higher retirement age and no early retirement option without reduction of benefits.

In economic data:

• Eurozone's flash June Manufacturing PMI 51.3 (expected 51.6; last 51.6) and flash Services PMI 48.9 (expected 48.6; last 47.7)
• Germany's flash June Manufacturing PMI 50.0 (expected 50.3; last 50.1) and flash Services PMI 46.8 (expected 49.0; last 48.1)
• U.K.'s flash June Manufacturing PMI 53.1 (expected 53.5; last 53.9) and flash Services PMI 48.7 (expected 50.1; last 49.3). June CBI Distributive Trends Orders -45 (expected -33; last -41)
• France's June Business Survey 100 (expected 101; last 102). Flash June Manufacturing PMI 50.7 (expected 50.2; last 49.7) and flash Services PMI 47.4 (expected 45.9; last 44.3)
• Spain's April trade deficit EUR5.20 bln (last deficit of EUR4.40 bln)