Stock Market Update

Equity futures point to a lower opening this morning after the major averages finished mostly higher yesterday, with the S&P 500 notching its ninth straight winning session. Geopolitical developments were relatively muted yesterday, while renewed hostilities between the U.S. and Iran have oil prices and Treasury yields moving higher this morning.

NBC News reports that Iran launched multiple rocket and drone attacks in the Persian Gulf, and the U.S. conducted self-defense strikes on Iran's Qeshm Island, placing additional pressure on the fragile ceasefire. Crude oil is currently up $1.96 (+2.1%) to $95.72 per barrel.

Even still, semiconductor names are poised for an extension of yesterday's gains that drove the push to record highs.

On the data front, the MBA Mortgage Applications Index for the week ended May 30 decreased 2.5%, from a prior decrease of 8.5%.

In corporate news:

• Open AI CEO Sam Altman will visit the White House today, according to Politico.
• SpaceX (SPCX) is aiming to set the IPO price at $135 per share, according to Reuters.
• Palo Alto Networks (PANW 289.51, -7.67, -2.6%) beat EPS expectations by $0.06, beat revenue expectations, and guided Q4 EPS and revenues above consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed showing on Wednesday that mirrored the mixed final Services PMI numbers for May for many countries in the region. Japan's Nikkei: +2.5%, Hong Kong's Hang Seng: -1.6%, China's Shanghai Composite: +0.2%, India's Sensex: -0.4%, South Korea's KOSPI: closed for holiday, Australia's ASX All Ordinaries: +0.6%.

In news:

• Japan's Nikkei stood out from the pack, surging 2.5% to a record high on the strength of tech stocks.
• The Nikkei managed to trade around speculation of an impending rate hike, as well as rising oil prices, which acted as a drag on India's Sensex.
• Australia's ASX All Ordinaries managed a modest gain in the wake of some weaker-than-expected Q1 GDP data.
• South Korea's KOSPI was closed for election day.

In economic data:

• China's May RatingDog Services PMI 54.4 (expected 52.3; last 52.6)
• Japan's May S&P Global Services PMI 50.0 (expected 50.0; last 50.0)
• Australia's May S&P Global Services PMI 48.7 (expected 47.7; last 50.7); Q1 GDP 0.3% qtr/qtr (expected 0.5%; last 0.9%) and 2.5% yr/yr (expected 2.7%; last 2.5%); May AIG Manufacturing Index -22.4 (last -27.5)
• India's May HSBC Services PMI 59.8 (expected 58.9; last 58.8)
• Hong Kong's May S&P Global Manufacturing PMI 50.4 (last 48.6)

Major European indices are mostly lower, feeling the weight of rising oil prices tied to renewed hostilities between the U.S. and Iran and a USTR proposal to impose added tariffs of 10.0% to 12.5% for as many as 60 countries, including those in the European Union, due to findings of using forced labor to make goods for export. STOXX Europe 600: -0.5%, Germany's DAX: -1.1%, U.K.'s FTSE 100: -0.4%, France's CAC 40: -0.4%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: +0.3%.

In news:

• Final Services PMI readings for May were better than expected, but still below 50.0, which is the demarcation line between expansion and contraction.
• The better-than-expected prints are contributing to expectations that the ECB will vote to raise its key policy rates this month.

In economic data:

• Eurozone's May HCOB Services PMI 47.7 (expected 46.4; last 47.6); April PPI 0.6% m/m (expected 0.6%; last 3.4%) and 4.9% yr/yr (expected 4.8%; last 2.0%)
• Germany's May HCOB Services PMI 48.1 (expected 47.8; last 46.9)
• U.K.'s May S&P Global Services PMI 49.3 (expected 47.9; last 52.7)
• Spain's May HCOB Services PMI 50.1 (expected 48.2; last 47.9)
• Italy's May HCOB Services PMI 49.4 (expected 49.2; last 49.8)
• France's May HCOB Services PMI 44.3 (expected 42.9; last 46.5)