Stock Market Update

Equity futures point to a mostly higher open this morning, with futures tied to the S&P 500 and Nasdaq Composite outpacing those tied to the DJIA as semiconductor stocks look to rebound from a shaky week.

Although volatility across semiconductor stocks remained elevated, renewed leadership from mega-cap growth stocks, broad strength in software, and another solid showing from other pockets of the market helped offset the weakness in chipmakers. The broadening of leadership has been touted by analysts as a bullish signal, and the consumer discretionary sector (-1.1% year-to-date) is now the only S&P 500 sector without a year-to-date gain.

Oil remains below $70 per barrel as the U.S.-Iran conflict remains in de-escalation mode. Bloomberg reports that shipping along the U.S. protected corridor in the Strait of Hormuz is seeing signs of recovery.

This week will be particularly light on both economic data releases and earnings reports, with the market set to receive the June ISM Non Manufacturing Index (Briefing.com consensus 54.2%) at 10:00 a.m. ET.

In corporate news:

• Sriram Krishnan says President Trump will not support heavy artificial intelligence regulation, according to Financial Times.
• GFL Environmental (GFL 39.80, +2.32, +6.2%) is considering going private, according to Bloomberg.
• Micron (MU 1,008.40, +32.84, +3.4%) broke ground on a $9 billion Japanese factory expansion, according to Bloomberg.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: +1.1%, China's Shanghai Composite: -0.1%, India's Sensex: +0.7%, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: -0.1%.

In news:

• Japanese debt faced some pressure ahead of tomorrow's 30-yr JGB auction.
• Apple supplier Hon Hai reported record sales for Q2 and issued strong guidance.
• Samsung will report its preliminary Q2 results tomorrow.
• South Korea launched 24-hour currency trading and South Korea's President Lee said that a committee to enhance chip competitiveness will begin operating in August.
• China has begun cracking down on safety violations in mining and chemical production.

In economic data:

• Hong Kong's June Manufacturing PMI 52.0 (last 50.4)
• Australia's June MI Inflation Gauge -0.4% m/m (last -0.3%). June ANZ Commodity Price Index -1.0% m/m (last 0.7%) and June ANZ Job Advertisements -0.2% m/m (last 2.0%)
• Singapore's May Retail Sales -2.3% m/m (last 0.4%); 3.0% yr/yr (last 5.4%)

Major European indices trade near their flat lines while Spain's IBEX (-0.9%) underperforms with industrials and construction names among the laggards. STOXX Europe 600: -0.3%, Germany's DAX: -0.1%, U.K.'s FTSE 100: -0.3%, France's CAC 40: UNCH, Italy's FTSE MIB: UNCH, Spain's IBEX 35: -0.9%.

In news:

• Economic data released this morning was generally positive, though eurozone's PPI accelerated to 5.9% in May from 5.0% in April.
• Germany has increased its borrowing estimate for 2027 by about EUR7 bln due to weak tax revenue.
• EasyJet agreed in principle to be acquired by Castlelake for $7.3 bln.
• European Central Bank policymaker Moulin said that he is comfortable with the base scenario and that the balance of risks is in the right place.

In economic data:

• Eurozone's May Retail Sales 0.2% m/m, as expected (last -0.3%); 1.6% yr/yr (expected 1.5%; last 0.9%). May PPI 0.2% m/m, as expected (last 0.7%); 5.9% yr/yr (expected 5.7%; last 5.0%). July Sentix Investor Confidence -3.1 (expected -14.5; last -13.4)
• Germany's May Factory Orders 1.9% m/m (expected 1.1%; last -3.2%)
• U.K.'s June Construction PMI 38.4 (expected 40.1; last 38.2)
• Swiss June Unemployment Rate 3.1% (expected 3.0%; last 3.0%)