Stock Market Update

Equity futures point to a mostly lower open this morning as chipmaker stocks are on pace to give back much of yesterday's gains. Strength across the group and support from other mega-cap tech names helped the major averages finish higher yesterday after semiconductor stocks retreated in the prior two sessions.

The early weakness across semiconductor stocks is being somewhat attributed to an underwhelming reaction to Samsung Electronics' earnings report overnight, which weighed heavily on South Korea's Kospi. Futures tied to the tech-heavy Nasdaq Composite are under particular pressure this morning, though the DJIA is still on track for a higher opening, suggesting some rotational action could be in play.

Headlines are relatively quiet elsewhere, with corporate news flow on the lighter side as the market drifts towards the next earnings season, while not much has changed surrounding the U.S.-Iran conflict.

Investors will receive the May Trade Balance at 8:30 a.m. ET (Briefing.com consensus -$78.8 billion), the only economic data release of note.

In corporate news:

• Airlines are not lowering fares despite a drop in jet fuel costs, according to The Wall Street Journal.
• JP Morgan (JPM 341.78, +4.06, +1.2%) and Bank of America (BAC 60.43, +0.53, +0.9%) are in discussions to acquire Fiserv's (FISV 54.36, +2.658, +5.0%) network, according to The Wall Street Journal.
• Walmart (WMT 111.67, +1.02, +0.9%) confirmed it will lower prices on beef and other "summer favorites" this summer.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region retreated on Tuesday with South Korea's Kospi (-4.9%) revisiting Friday's low before narrowing its loss. Japan's Nikkei: -2.1%, Hong Kong's Hang Seng: -0.5%, China's Shanghai Composite: -1.3%, India's Sensex: -0.1%, South Korea's Kospi: -4.9%, Australia's ASX All Ordinaries: -0.4%.

In news:

• Samsung was among the laggards after its preliminary results for Q2 were not as strong as the market had expected.
• Japan sold 30-yr JGBs to solid demand, resulting in a slight dip in the 30-yr JGB yield (3.98%) while yields on other tenors inched higher.
• The World Bank expects China's GDP to decelerate to 4.4% in 2026 with another dip to 4.3% expected in 2027.

In economic data:

• Japan's May Household Spending 3.7% m/m (expected 1.4%; last 1.6%); -0.4% yr/yr (expected -2.3%; last -0.5%). May Overall Wage Income 3.2% yr/yr (expected 3.4%; last 3.6%) and May Overtime Pay 2.9% yr/yr (last 4.8%). May Leading Index 116.8 (expected 116.9; last 116.1) and Coincident Indicator 0.4% m/m (last 1.3%)

Major European indices trade on a modestly higher note while Germany's DAX (-0.7%) underperforms. STOXX Europe 600: -0.2%, Germany's DAX: -0.7%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: +0.2%.

In news: 

• Tech stocks are among the laggards after an overnight release of underwhelming preliminary Q1 results from Samsung.
• Germany's Industrial Production growth was much stronger than expected in May.
• Germany's Finance Minister Klingbeil acknowledged that Germany's debt will reach 69.5% of GDP in 2027.
• NATO officials are meeting in Ankara today and tomorrow.

In economic data:

• Germany's May Industrial Production 0.9% m/m (expected 0.1%; last 0.2%); 0.1% yr/yr (last -0.8%)
• U.K.'s June Halifax House Price Index 0.2% m/m (expected 0.1%; last -0.2%); 0.6% yr/yr (last 0.5%)
• France's May trade deficit EUR6.9 bln (expected deficit of EUR5.9 bln; last deficit of EUR5.4 bln)