Stock Market Update

Stock index futures point to a flattish open after yesterday's broad retreat, which was driven by disappointing post-earnings reactions to Alphabet and Tesla, renewed concerns surrounding the cost of the AI buildout, and another sharp rise in oil prices and Treasury yields.

Crude oil is modestly lower this morning despite a New York Times report that Iran rejected a ceasefire proposal presented by the Iraqi prime minister, keeping geopolitical risk in focus. Investors are also monitoring fresh tariff developments after reports that President Trump is looking to reimpose tariffs on roughly 60 trading partners, including the European Union.

There are plenty of earnings reports on this morning's calendar, though the slate lacks the same market-moving potential as yesterday's batch of mega-cap earnings.

In corporate news:

• American Express (AXP 325.73, -15.11, -4.4%) ) beats by $0.13, reports revs in-line; reaffirms FY26 EPS guidance, raises revenue growth guidance to 10%.
• Intel (INTC 103.85, +3.62, +3.6%) beat EPS expectations by $0.20, beats on revs, gross margin up 12.1 ppts; guides Q3 EPS above consensus, revs above consensus; Raises FY26 CapEx guidance to more than $20 bln from prior guidance of $18 bln; Also forecasting 2027 CapEx to be significantly above 2026 levels.
• Oracle (ORCL 122.80, +2.76, +2.3%) wins up to $6.99 bln DoW enterprise software IDIQ contract.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a lower note with South Korea's Kospi (-5.7%) facing renewed pressure after regulators announced that increased cash requirements for leveraged ETF purchases will come into effect sooner than originally planned. Japan's Nikkei: -2.7% Hong Kong's Hang Seng: -1.0%, China's Shanghai Composite: -1.6%, India's Sensex: -0.4%, South Korea's Kospi: -5.7%, Australia's ASX All Ordinaries: -0.9%.

In news:

• Meanwhile, South Korea's President Lee will be meeting with big tech CEOs in San Francisco today.
• Flash July PMI readings showed ongoing expansion in manufacturing and services sectors in Australia, Japan, and India.
• Japan is setting up a panel to manage the flow of foreign nationals into the country, fulfilling Prime Minister Takaichi's campaign pledge.

In economic data:

• Japan's June National CPI 0.3% m/m (last 0.4%); 1.7% yr/yr (last 1.5%). June National Core CPI 1.6% yr/yr, as expected (last 1.4%). Flash July Manufacturing PMI 54.7 (expected 55.0; last 54.8) and flash Services PMI 51.9 (last 52.2)
• Australia's flash July Manufacturing PMI 51.7 (last 51.5) and flash Services PMI 53.0 (last 50.5)
• Singapore's Q1 URA Property Index 0.5% qtr/qtr, as expected (last 0.9%)
• India's flash July Manufacturing PMI 53.9 (last 54.2) and flash Services PMI 53.1 (last 57.4)

Major European indices are looking for an upbeat finish to the week despite news that President Trump is looking to reimpose tariffs on 60 trading partners, including the EU. These tariffs will replace the 10% global tariff that is scheduled to expire. STOXX Europe 600: +0.4%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.8%.

In news:

• These tariffs will replace the 10% global tariff that is scheduled to expire. Economic data from the region was mostly surprising to the upside, with an improvement in PMI readings and the U.K. reporting strong Retail Sales growth for June (4.2%; expected 2.3%).
• European Central Bank policymaker Kocher said that second-round effects of inflation have not become apparent, but he is ready to vote for a September hike if needed.
• The ECB's latest Survey of Professional Forecasters showed no change in inflation expectations for 2026 and a ten-basis point uptick for 2027.
• GDP growth in 2026 is expected at 0.6%, down from the previous forecast for a 1.0% increase while the outlook for 2027 was trimmed to 1.2% from 1.3%.

In economic data:

• Eurozone's flash July Manufacturing PMI 52.0 (expected 51.5; last 51.4) and flash Services PMI 51.6 (expected 49.8; last 49.4)
• Germany's August GfK Consumer Climate -29.6 (expected -28.7; last -29.3). Flash July Manufacturing PMI 52.2 (expected 50.4; last 50.3) and flash Services PMI 49.6 (expected 49.0; last 48.6)
• U.K.'s July GfK Consumer Confidence -17 (expected -22; last -23). June Retail Sales 1.0% m/m (expected -0.3%; last 1.2%); 4.2% yr/yr (expected 2.3%; last 3.5%). June Core Retail Sales 1.1% m/m (expected -0.4%; last 1.2%); 5.4% yr/yr (expected 3.2%; last 4.9%). Flash July Manufacturing PMI 52.8 (expected 52.0; last 52.5) and flash Services PMI 51.8 (expected 49.4; last 48.8)
• France's flash July Manufacturing PMI 50.0 (expected 51.0; last 51.2) and flash Services PMI 49.8 (expected 47.5; last 46.8)