Stock Market Update

Equity futures point to a lower open this morning, with the market so far failing to build on yesterday's momentum-driven rebound.

Semiconductor stocks move lower in the premarket after driving yesterday's gains, though there is some resilience across non-semiconductor mega-cap names, which face a key test after the close as Alphabet (GOOG 347.40, +1.21, +0.33) and Tesla (TSLA 376.95, -1.98, -0.5%) are set to report earnings.

In addition to some early profit-taking across chipmaker names, the market is pressured by another significant rise in oil prices this morning as tensions between the U.S. and Iran continue to escalate. The U.S. completed its 11th consecutive night of military strikes, with Secretary of State Marco Rubio saying Iran is "not serious" about talks. WTI crude oil is currently up $3.05 (+3.6%) to $87.39 per barrel.

Elsewhere, investors are assessing this morning's batch of earnings reports, which contains a few S&P 500 names but lacks the market-moving potential of this afternoon's slate.

On the data front, the MBA Mortgage Applications index for the week ended July 18 increased 1.9%, from a prior decrease of 2.7%.

In corporate news:

• AT&T (T 23.23, +0.97, +4.4%) beat EPS expectations by $0.06, reported revenues in-line, and reaffirmed its FY26 EPS guidance.
• Capital One (COF 206.52, +0.30, +0.2%) beat EPS expectations by $1.14 and reported revenues in-line.
• Super Micro Computer (SMCI 29.37, +3.87, +15.2%) guided its June Q revenues to the low end of guidance, but raised gross margin guidance. The company's backlog rose to record levels.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed showing on Wednesday. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: -1.0%, China's Shanghai Composite: +0.1%, India's Sensex: -0.9%, South Korea's Kospi: +0.7%, Australia's ASX All Ordinaries: +0.3%.

In news:

• SK Hynix denied speculation that it is looking to purchase a chip fabrication facility in Ohio from Intel.
• Japan is reportedly looking to relax lending rules for banks while also encouraging pension funds to invest in alternative assets.
• China's Foreign Minister Yi met with Secretary of State Rubio in Manila.
• Bank Indonesia left its policy rate at 5.75% against some expectations for a hike.

In economic data:

• Japan's June trade deficit JPY880 bln (expected deficit of JPY560 bln; last deficit of JPY220 bln). June Imports 25.4% yr/yr (expected 21.0%; last 12.5%) and Exports 19.3% yr/yr (expected 18.6%; last 16.8%)
• South Korea's June PPI 0.0% m/m (last 1.0%); 8.6% yr/yr (last 8.6%)
• Australia's June MI Leading Index 0.0% m/m (last -0.1%)
• New Zealand's June Credit Card Spending 3.1% yr/yr (last 4.2%)

Major European indices trade in the green. STOXX Europe 600: +0.4%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +1.3%, France's CAC 40: +0.8%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: +1.0%.

In news:

• The U.K.'s inflation report for June was fairly close to expectations and had no meaningful impact on the market's expectations for the Bank of England to keep its bank rate at 3.75% next week.
• British Prime Minister Burnham will seek to reduce taxes for hospitality businesses while also calling for fiscal restraint.
• The French parliament banned the use of social media for children under 15.

In economic data:

• U.K.'s June CPI 0.1% m/m, as expected (last 0.2%); 2.6% yr/yr (expected 2.7%; last 2.8%). June Core CPI 0.3% m/m (last 0.3%); 2.6% yr/yr (expected 2.5%; last 2.6%). June Input PPI -2.0% m/m (expected -2.7%; last 0.6%) and Output PPI 0.0% m/m (expected -0.1%; last 0.3%). June House Price Index 2.7% (expected 3.2%; last 3.8%)