Stock Market Update

Equity futures point to a mostly lower opening this morning as semiconductor stocks face an extension of yesterday's pressure. The semiconductor group lagged yesterday, though broad strength and solid gains across other meg-cap tech names helped the major averages finish higher.

This morning's pressure follows an 11% drop in Korean-listed shares of memory powerhouse SK Hynix, with the stock's ADR debut on the Nasdaq last Friday contributing to recent choppiness across the group.

Elsewhere, oil prices are little changed this morning, though Bloomberg reports the U.S. hit a sanctioned Iranian oil tanker as traffic in the Strait of Hormuz dwindles.

Investors have a decent batch of earnings reports to assess this morning as Q2 earnings season begins to broaden beyond the financials sector.

Additionally, today's economic data slate is also relatively full and features the June Retail Sales report (Briefing.com consensus 0.3%) at 8:30 a.m. ET.

In corporate news:

• GE Aerospace (GE 352.55 -7.80, -2.2%) beat EPS expectations by $0.42, beat revenue expectations, and guided FY26 EPS above consensus.
• Taiwan Semiconductor Manufacturing (TSM 399.00, -20.48, -4.9%) beat EPS expectations by $0.50, reported revenues in line, and guided Q3 revenues above consensus.
• UnitedHealth (UNH 443.00, +24.48, +5.9%) beat EPS expectations by $1.50, beat revenue expectations, and guided FY26 EPS above consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region were mostly lower, pressured once again by the extreme volatility of South Korea's Kospi (-6.4%) that cut risk appetite. Japan's Nikkei: -2.8%, Hong Kong's Hang Seng: +1.3%, China's Shanghai Composite: -1.9%, India's Sensex: flat, South Korea's Kospi: -6.4%, Australia's ASX All Ordinaries: flat.

In news:

• The Bank of Korea delivered its first rate hike in 3 1/2 years (+25 bps to 2.75%, as expected) and the Financial Services Commission's proclamation that it is meeting emergently to discuss the volatility and will soon have an announcement with respect to single, leveraged ETFs.
• The Kospi's weakness was paced by an 11% drop in SK Hynix that set a nervous tone for semiconductor stocks elsewhere. Taiwan Semi (TSM) posted better-than-expected Q2 results and Q3 guidance but is still down more than 4.0% ahead of the U.S. open.
• Japan's Nikkei (-2.8%) was another notable loser despite several key product announcements between NVIDIA (NVDA) and Japanese companies.
• Higher JGB yields pressured the Nikkei, yet the country's finance minister aimed to stem the rise with a claim that efforts will be made to improve the attractiveness of JGBs for individuals.
• Separately, China's AI Conference begins Friday with a keynote address from President Xi.

In economic data:

• Australia's July MI Inflation Expectations 4.7% (prior 5.5%)

Major European indices are modestly lower with risk sentiment being held in check by rising bond yields, ongoing geopolitical tension, and the high volatility of the semiconductor stocks that had a downside bias in Asian trading. STOXX Europe 600: -0.5%, Germany's DAX: -0.9%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.8%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: -0.6%.

In news:

• The UK released a large batch of economic data, including Q2 GDP that slightly exceeded the month-over-month expectation and industrial production for May that was weaker than expected.
• The corporate news flow is relatively light, as macro conditions have been a focal point; however, Uber's (UBER) $14.8 billion cash acquisition of Delivery Hero is drawing some special attention.
• Separately, reports indicate the ECB is expected to sit tight with its policy rate settings at next week's meeting.

In economic data:

• Eurozone's May Trade Balance EUR -7.8 bln (EUR2.8 bln expected; prior EUR -1.2 bln)
  UK's May GDP 0.1% m/m (0.0% expected; prior -0.1%) and 1.3% yr/yr (1.4% expected; prior 1.1%); May Trade Balance GBP -18.66 bln (GBP -23.10 bln expected; prior GBP -24.58 bln); May Industrial Production -0.5% m/m (-0.1% expected; prior 0.2%); May Construction Output -0.8% m/m (-0.3% expected; prior -0.1%)
• Italy's June CPI 0.0% m/m (0.0% expected; prior 0.4%) and 3.0% yr/yr (3.0% expected; prior 3.2%)