Stock Market Update

Equity futures point to a lower opening this morning as semiconductor stocks are poised for an extension of yesterday's weakness. Losses across chipmaker and select other tech stocks saw the Nasdaq Composite finish lower yesterday, though a solid effort from the broader market helped the S&P 500 and DJIA finish higher, with the DJIA capturing new all-time highs.

Headlines are relatively quiet this morning, including on the geopolitical front. Crude oil is little changed, and reports continue to indicate limited negotiation progress between the U.S. and Iran.

On the economic data front, the market is set to receive the May Employment Situation report at 8:30 a.m. ET.

In corporate news:

• U.S. officials are talking with AI companies about the U.S. government taking stakes in some of those firms, according to NOTUS.
• Docusign (DOCU 48.70, -2.24, -4.4%) beat EPS expectations by $0.10, reported revenues in-line, and guided Q2 revenues in-line with FY27 revenues above consensus.
• Lululemon Athletica (111.88, -13.04, -10.4%) beat EPS expectations by $0.01, beat revenue expectations, guided Q2 EPS and revenues below consensus, and lowered its FY27 EPS and revenue expectations below consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region finished the week on a lower note with South Korea's Kospi (-5.5%) deepening its reversal from a record high while the won weakened to a 17-year low against the dollar. Japan's Nikkei: -1.3%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: -0.7%, India's Sensex: -0.2%, South Korea's Kospi: -5.5%, Australia's ASX All Ordinaries: -0.7%.

In news:

• South Korea's President Lee will visit France during the G-7 summit between June 15 and 17.
• The Reserve Bank of India left its policy rate at 5.25%, as expected, and announced that foreign institutional investors will be exempt from capital gains taxes on sales or transfer of government securities.
• Indonesia will be exempt from some U.S. tariffs, according to its Economic Ministry.

In economic data:

• Japan's April Household Spending 1.6% m/m (expected 0.8%; last -1.3%); -0.5% yr/yr (expected -1.5%; last -2.9%). April Overall Wage Income 3.5% yr/yr (expected 3.1%; last 3.1%), and Overtime Pay 4.2% yr/yr (expected 3.2%; last 3.1%). April Leading Index 115.9 (expected 114.4; last 114.0) and Coincident Indicator 1.1% m/m (expected -1.7%; last 0.3%)
• South Korea's April Current Account surplus $28.29 bln (last surplus of $37.93 bln)
• Singapore's April Retail Sales 0.3% m/m (last 3.4%); 5.4% yr/yr (last 4.6%)
• India's Q4 GDP 7.8% (expected 7.2%; last 7.8%)

Major European indices are on track for a higher finish to the week. STOXX Europe 600: +0.3%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +1.0%.

In news:

• Eurozone's Q1 GDP was revised down to -0.2% from +0.1%, reflecting the first contraction since 2021.
• France's transportation minister said that there should be no concerns about jet fuel or gasoline supply levels during the summer.
• The market is all but certain that the European Central Bank will announce a 25-basis point rate hike on Thursday with another hike expected later this year.
• Ukraine's president sent a letter to Russia's leader, proposing a bilateral meeting to end the war.

In economic data:

• Eurozone's Q1 GDP -0.2% qtr/qtr (expected 0.1%; last 0.1%); 0.3% yr/yr (expected 0.8%; last 1.2%). Q1 Employment Change 0.1% qtr/qtr, as expected (last 0.2%); 0.5% yr/yr, as expected (last 0.7%)
• U.K.'s May Halifax House Price Index -0.1% m/m (expected 0.0%; last -0.1%); 0.5% yr/yr (expected 1.0%; last 0.4%)
• France's April Industrial Production 0.1% m/m (expected -0.2%; last 1.4%). April trade deficit EUR5.6 bln (expected deficit of EUR6.2 bln; last deficit of EUR6.4 bln) and April Current Account deficit EUR200 mln (last deficit of EUR900 mln)
• Italy's April Retail Sales 0.0% m/m (expected 0.4%; last 0.8%); 1.6% yr/yr (last 3.8%)