Stock Market Update

Equity futures point to a lower open this morning as the market faces considerable pressure in its largest components against a backdrop of rising oil prices.

All of the "Magnificent Seven" cohort is down in the premarket following the earnings results of Alphabet (GOOG 326.02, -15.82, -4.6%) and Tesla (TSLA 349.46, -24.55, -6.6%) yesterday evening. Tesla missed expectations, while Alphabet posted a solid beat. However, the stock still trades firmly lower as investors focus on another increase in the company's capital expenditure forecast.

The latter point continues to be a driving force for the AI-infrastructure trade, which has a host of semiconductor and related names trading higher this morning.

The market will have to navigate another bump in oil prices, with WTI crude moving above the $90 per barrel mark after Reuters reported Houthi militants targeted two Saudi oil tankers in the Red Sea. The U.S. continues to strike Iran as hopes for negotiating an off-ramp dwindle.

On the data front, investors are set to receive one of the few economic data releases of note this week, in the form of the weekly initial jobless claims report (Briefing.com consensus 214K).

In corporate news:

• Alphabet (GOOG 326.02, -15.82, -4.6%) beat EPS expectations by $6.23 and beat revenue expectations. Capital expenditures increased to $44.9 billion versus $35.7 billion in Q1.
• SK Hynix (SKHY 173.49, +8.22, +5.0%) has limited the conversion of its South Korea-listed shares into U.S.-traded American depositary receipts (ADRs) to 2.5% of its total shares outstanding.
• Tesla (TSLA 349.46, -24.55, -6.6%) missed EPS expectations by $0.20 and beat revenue expectations, with gross margins down 41 basis points to 16.8%. First-generation production lines for Optimus are being installed in anticipation of production in 2026.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with South Korea's Kospi (+4.4%) continuing this week's rebound off a three-month low. Japan's Nikkei: +0.5%, Hong Kong's Hang Seng: +1.3%, China's Shanghai Composite: +0.3%, India's Sensex: -0.5%, South Korea's Kospi: +4.4%, Australia's ASX All Ordinaries: +0.2%.

In news:

• The FCC voted to prohibit sales of devices in the U.S. that include hardware from certain Chinese companies.
• There was some speculation that the Bank of Japan could accelerate the pace of its rate hikes to counter inflation risks.
• Australia reported strong employment figures for June, though the market does not expect the Reserve Bank of Australia to hike rates at its next meeting.
• The Japanese yen has dropped to a fresh 2026 low against the dollar, hitting a level not seen since late 1986.

In economic data:

• China's June FDI -5.0% YTD (last -8.6%)
• South Korea's flash Q2 GDP 0.6% qtr/qtr (expected 0.4%; last 1.8%); 3.7% yr/yr (expected 3.5%; last 3.8%)
• Australia's June Employment Change 76,300 (expected 16,400; last 44,000) and full employment change 29,300 (last 7,200). June Unemployment Rate 4.4%, as expected (last 4.4%) and Participation Rate 67.0% (expected 66.7%; last 66.7%)
• Singapore's June CPI 0.0% m/m (last 0.7%); 1.9% yr/yr (expected 2.0%; last 1.8%). June Core CPI 1.6% yr/yr, as expected (last 1.4%)

Major European indices trade in the red. STOXX Europe 600: -0.7%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -1.2%, Italy's FTSE MIB: -2.0%, Spain's IBEX 35: -0.7%.

In news:

• BNP Paribas reported strong results and reaffirmed its targets for the next couple years while UniCredit beat expectations and raised its profit guidance for the next four years.
• STMicroelectronics also beat expectations by a wide margin.
• The European Central Bank will release its latest policy statement at 8:15 ET, and while a rate change is not expected at this time, ECB President Lagarde is likely to hint at a hike in September.

In economic data:

• U.K.'s July CBI Industrial Trends Orders -45 (expected -40; last -45)
• France's July Business Survey 101, as expected (last 100)