Stock Market Update

Equity futures point to a lower opening this morning as oil prices and Treasury yields rise in reaction to escalating tensions in the Middle East. CNBC reports that a ship was attacked while traversing the Strait of Hormuz, and President Trump has ruled out extending a ceasefire with Iran.

Rising oil prices contributed to the lower finish of the major averages yesterday, with stocks steadily retreating through the afternoon as crude surged. Semiconductor stocks, which provided an important counterweight to the broad weakness and helped limit losses at the index level, are moving firmly lower in the premarket.

A small batch of earnings and relatively quiet corporate news flow largely keeps the market focused on macro pressures.

There are several economic data releases on the calendar this morning, including July Housing Starts (Briefing.com consensus 1.360 million) and Building Permits (Briefing.com consensus 1.390 million).

In corporate news:

• Airlines debate cutting ticket prices as jet fuel prices ease, according to Financial Times.
• Home Depot (HD 342.25, +4.37, +1.3%) beat EPS expectations by $0.19, beat revenue expectations, and reaffirmed its FY27 EPS and revenue guidance.
• Meta Platforms (META 563.29, -5.68, -1.0%) social media addiction trial begins today, according to Bloomberg.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a mixed note with South Korea's Kospi (-1.6%) approaching a five-week high before reversing. Japan's Nikkei: -2.5%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: +0.2%, India's Sensex: -0.6%, South Korea's Kospi: -1.6%, Australia's ASX All Ordinaries: -0.1%.

In news:

• Investor sentiment was hurt by news that a ship traversing the Strait of Hormuz was hit by a missile.
• South Korea is reportedly discussing military cooperation with U.S. forces in the Middle East.
• There are growing concerns that China's consumer subsidies pulled past demand forward rather than create sustainable growth.
• China's National Bureau of Statistics expects CPI to continue increasing mildly in the second half.

In economic data:

• Australia's August Westpac Consumer Sentiment 6.0% (last 4.1%)

Major European indices trade on a mostly lower note after it was reported that a ship traversing the Strait of Hormuz was hit by a missile. STOXX Europe 600: -0.5%, Germany's DAX: -0.4%, U.K.'s FTSE 100: +0.1%, France's CAC 40: -0.4%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: +0.3%.

In news:

• Technology stocks are under pressure while energy names outperform.
• European Central Bank Chief Economist Lane said that inflation is expected to remain around 3.0% for the remainder of the year.
• Germany's ZEW Economic Sentiment for August (34.2; expected 30.1) beat expectations, reflecting benefit from infrastructure spending.

In economic data:

• Eurozone's August ZEW Economic Sentiment 31.4 (expected 25.9; last 23.4)
• Germany's August ZEW Economic Sentiment 34.2 (expected 30.1; last 26.3) and ZEW Current Conditions -61.1 (expected -68.8; last -77.6)
• U.K.'s June three-month Employment Change 83,000 (last 147,000), June Average Earnings Index + Bonus 4.1% yr/yr (expected 4.0%; last 4.4%), June Unemployment Rate 4.9% (expected 4.8%; last 4.9%). July Claimant Count Change -11,000 (expected 16,500; last -6,400). Q1 Labor Productivity 0.5% (expected -0.5%; last -0.7%)