Stock Market Update

Equity futures point to a higher open this morning as strong earnings and easing oil prices continue to lead the market higher.

Stocks are coming off a winning session that saw the major averages each advance by more than 1%, with the S&P 500 closing above the 7,600 mark for the first time since June 2 while the DJIA notched a record closing high. Mega-cap tech names, several of which reported strong earnings last week, were a key driver of the index-level advance.

There is some earnings buzz this morning as another busy week ramps up, with Caterpillar (CAT 921.57, +91.54, +11.0%) and Palantir (PLTR 144.50, +18.85, +15.0%) among the standouts.

On the macro front, oil is retreating again today after initially moving higher, with reports from Qatar that a potential peace deal between the U.S. and Iran has been drafted acting as a catalyst. Additionally, Treasury Secretary Scott Bessent told CNBC, "There is a chance" the U.S. might have a deal with Iran to reopen the Strait of Hormuz today or tomorrow.

Today will be lighter when it comes to economic data, with the 8:30 a.m. release of the June trade balance the most notable release.

In corporate news:

• Alphabet (GOOG 368.01, -4.46, -1.2%) created a large infrastructure finance program to supply $150 billion in chips to Anthropic, according to the Financial Times.
• Caterpillar (CAT 921.57, +91.54, +11.0%) beat EPS by $1.95 and beat revenue expectations.
• McDonald's (MCD 270.00, +4.77, +1.8%) beat EPS expectations by $0.06 and reported revenues in line. The company saw global comparable sales increase 1.3%.
• Palantir (PLTR 144.50, +18.85, +15.0%) beat EPS expectations by $0.07, beat revenue expectations, and guided Q3 and FY26 revenues above consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: +0.3%, India's Sensex: -0.3%, South Korea's Kospi: +1.6%, Australia's ASX All Ordinaries: +1.5%.

In news:

• SK Hynix is negotiating the terms of its bonus payout plan with its workers union to avoid a potential strike.
• There was speculation that Japan's Ministry of Finance intervened in the foreign exchange market once again on Monday.
• China Securities Times expects the domestic property market to continue recovering during the second half of the year.
• Westpac abandoned its forecast for two more rate hikes from the Reserve Bank of Australia due to softening inflation.

In economic data:

• Japan's July Monetary Base -13.8% yr/yr (expected -13.0%; last -13.7%)
• South Korea's July CPI -0.2% m/m (expected 0.1%; last 0.1%); 2.8% yr/yr (expected 3.0%; last 3.2%)
• Hong Kong's June Retail Sales 4.6% yr/yr (last 7.9%)
• Australia's July Commodity Prices -15.4% yr/yr (last 14.6%)

Major European indices trade higherwhile Italy's MIB (+1.2%) outperforms, extending to a fresh record high. STOXX Europe 600: +0.8%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.4%, Italy's FTSE MIB: +1.2%, Spain's IBEX 35:+0.3%.

In news:

• Bayer, BP, and HSBC beat their respective profit expectations for the second quarter.
• Tiremaker Continental warned of an upcoming cost increase while Lufthansa lowered its profit forecast and noted that uncertainty is on the rise.

In economic data:

• France's June government budget deficit EUR106.8 bln (last deficit of EUR93.3 bln)
• Italy's June Retail Sales -0.1% m/m (expected 0.3%; last 0.2%); 3.1% yr/yr (last 2.2%)