Stock Market Update

Equity futures point to a higher open this morning, with futures linked to the Nasdaq leading the advance as tech names move higher in the premarket following the latest batch of earnings reports. Outside of a few notable earnings moves, corporate news flow is once again on the lighter side this morning. Oil is modestly higher after yesterday's bump as investors still await a material change to the state of negotiations between the U.S. and Iran.

The relative calm across headlines this morning puts the market's focus squarely on the 8:30 a.m. release of the July Consumer Price Index, which is expected to be the biggest catalyst of the week. Headline CPI is expected to increase 0.1% month-over-month, with Core CPI expected to tick up 0.2%. The release is especially important as expectations for a rate hike at the September FOMC meeting have slipped over the past month, with the market's implied odds now slightly favoring the Fed keeping rates steady.

In corporate news:

• CAVA Group (CAVA 70.65, +9.84, +16.2%) beat EPS and revenue expectations.
• CoreWeave (CRWV 106.54, +16.22, +18.0%) missed EPS expectations, reported revenues in-line, and guided Q3 revenue and FY26 revenue expectations.
• Super Micro Computer (SMCI 34.31, +2.71, +8.6%) beat EPS expectations, reported revenues in-line, and guided SepQ EPS and FY27 revenues well above consensus.

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region were mixed on Wednesday, with South Korea's Kospi (+3.7%) the standout thanks to leadership from its semiconductor components and the positive AI vibes flowing from CoreWeave's earnings results. Japan's Nikkei: +0.8%, Hong Kong's Hang Seng: -0.8%, China's Shanghai Composite: +0.3%, India's Sensex: -0.2%, South Korea's Kospi: +3.7%, Australia's All Ordinaries: -0.4%.

In news:

• There was a report from Asia Business Daily that Temasek, Singapore's sovereign wealth fund, is looking at investing in Samsung and SK Hynix.
• A contention by Bank of Korea's Deputy Governor Sangdai that there will likely be more rate hikes due to persistent core inflation and strong economic growth did not upset the Kospi's bullish bias.
• USD/JPY -0.1% to 159.16, with the yen weakening from a post-intervention high of 155.23 seen on August 3.

In economic data:

• Japan's August Reuters Tankan Index 18 (prior 13)
• South Korea's July Unemployment Rate 2.8% (prior 2.7%)
• India's July CPI 4.45% yr/yr (4.50% expected; prior 4.38%)

Major European indices are mostly higher, sporting modest gains in front of the 8:30 a.m. ET release of the U.S. July CPI report. STOXX Europe 600: +0.1%, Germany's DAX: +0.5%, U.K.'s FTSE 100: +0.1%, France's CAC 40: -0.1%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.

In news:

• Germany's CPI held at 2.8% yr/yr with the final July report, while Italy's CPI ticked up slightly to 2.9% from the preliminary report of 2.8%, leaving them well ahead of the ECB's 2% inflation target.
• Markets are also keeping tabs on Brent crude prices, which have moved from roughly $80.00/bbl at the start of the month to $89.04/bbl today as the U.S. and Iran dig in with their respective demands for getting to a peace agreement and full reopening of the Strait of Hormuz.

In economic data:

• Germany's July CPI 0.8% m/m (expected 0.8%; prior -0.3%) and 2.8% yr/yr (expected 2.8%; prior 2.3%). June Current Account Balance EUR19.0 bln (prior EUR9.0 bln).
• Italy's July CPI 0.3% m/m (expected 0.2%; prior 0.0%) and 2.9% yr/yr (expected 2.8%; prior 3.0%)