September S&P 500 E-Mini futures (ESU26) are up +0.25%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.14% this morning, finding some relief at the end of a wild week as oil prices and bond yields retreated.
The price of WTI crude fell more than -3% on Friday, but ongoing tensions between the U.S. and Iran suggest that energy prices will remain elevated. Treasury yields retreated from this year’s highs amid lower oil prices.
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Stock index futures were also supported by a mild rebound in most members of the Magnificent Seven in pre-market trading following yesterday’s selloff.
Market participants are now awaiting U.S. business activity data and a fresh batch of corporate earnings reports.
In yesterday’s trading session, Wall Street’s major indices closed sharply lower. Tesla (TSLA) tanked over -14% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the EV maker reported weaker-than-expected Q2 adjusted EPS, with a surge in spending leading to its first cash burn in two years. Also, Alphabet (GOOGL) sank more than -7% and was the top percentage loser on the Dow after the Google parent raised its full-year capital spending guidance to as much as $205 billion, overshadowing its stronger-than-expected Q2 results. In addition, Rollins (ROL) plunged over -9% after the pest control company posted weaker-than-expected Q2 adjusted EPS. On the bullish side, Allegion (ALLE) jumped over +10% after the lock manufacturer and physical security company posted upbeat Q2 results and raised its full-year guidance.
The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week unexpectedly fell by 22K to 187K. That marked the lowest number of initial claims since 1969. Economists had expected the figure to rise to 211K.
“The especially big drop in initial claims last week is hard to chalk up to any one factor with confidence. That subdued trend mostly reflects the modest layoff rate in the economy at large,” said Oliver Allen at Pantheon Macroeconomics.
Meanwhile, the Trump administration imposed new tariffs ranging from 10% to 12.5% on 60 U.S. trading partners, replacing the 10% global levies that expired today.
Today, investors will focus on preliminary U.S. purchasing managers’ surveys for July, set to be released in a couple of hours. The surveys will offer a snapshot of how the economy has performed this month just as oil prices have surged again amid escalating tensions in the Middle East. Economists expect the July S&P Global Manufacturing PMI to be 54.4 and the S&P Global Services PMI to be 51.3, compared to the previous month’s values of 53.9 and 51.2, respectively.
U.S. New Home Sales data will also be released today. Economists project June’s new home sales to be 609K, compared to the May figure of 580K.
On the earnings front, notable companies such as American Express (AXP), NextEra Energy (NEE), Verizon Communications (VZ), and HCA Healthcare (HCA) are slated to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +26% jump in quarterly earnings for Q2 compared to the previous year.
Investors will then shift their attention to next week, which is set to be an exceptionally busy one. The Federal Reserve will announce its latest interest rate decision, four of the Magnificent Seven companies—Microsoft (MSFT), Meta Platforms (META), Apple (AAPL), and Amazon.com (AMZN)—will report earnings, and a wave of key economic data will be released, including the Fed’s preferred inflation gauge.
U.S. rate futures have priced in a 70.6% chance of no rate change and a 29.4% chance of a 25 basis point rate hike at next week’s FOMC meeting.
“Next week is a really big week, and it could be make-or-break in terms of where markets go next. There’s an awful lot more nervousness now about capex, particularly when you’re talking about AI and where the return on investment is coming,” said Michael Hewson at iForex.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.69%, down -0.26%.
The Euro Stoxx 50 Index is up +0.69% this morning, supported by some positive corporate news and upbeat PMI data from the region. Software stocks jumped on Friday, led by a more than +7% gain in SAP SE (SAP.D.DX) after it posted better-than-expected Q2 current cloud backlog growth. Bank stocks also climbed. The benchmark index is on track to end the week higher. A survey released on Friday showed that Eurozone business activity expanded in July for the first time in four months, supported by a rebound in new orders. A separate survey showed that German consumer sentiment weakened slightly heading into August as households remained cautious about spending amid more pessimistic income expectations. In addition, a European Central Bank survey showed that Eurozone inflation expectations remained broadly unchanged over the past three months, with price growth expected to fall rapidly next year before returning to the 2% target in 2028. Meanwhile, three ECB officials said on Friday that the central bank may need to raise interest rates again as inflation risks remained elevated. The ECB held rates steady on Thursday but kept a September hike on the table. In other corporate news, Valmet (VALMT.H.DX) soared more than +21% after the company reported stronger-than-expected Q2 results and announced a potential business separation.
U.K. Retail Sales, U.K. Core Retail Sales, Germany’s GfK Consumer Climate Index, Eurozone’s Composite PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), and Eurozone’s Services PMI (preliminary) were released today.
U.K. June Retail Sales rose +1.0% m/m and +4.2% y/y, stronger than expectations of -0.3% m/m and +2.3% y/y.
U.K. June Core Retail Sales rose +1.1% m/m and +5.4% y/y, stronger than expectations of -0.4% m/m and +3.2% y/y.
The German August GfK Consumer Climate Index came in at -29.6, weaker than expectations of -28.7.
Eurozone’s July Composite PMI has been reported at 51.9, stronger than expectations of 50.3.
Eurozone’s July Manufacturing PMI came in at 52.0, stronger than expectations of 51.5.
Eurozone’s July Services PMI arrived at 51.6, stronger than expectations of 49.8.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.61%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.73%.
China’s Shanghai Composite Index closed lower today as concerns over further escalation in the Middle East and fresh U.S. tariffs weighed on sentiment. Brent crude settled above $100 a barrel on Thursday after U.S. President Donald Trump vowed “major military punishment” for Iran and its Houthi allies. Separately, the Trump administration imposed new tariffs of 10% to 12.5% on imports from most major trading partners, replacing the 10% levies that expired today. Chinese goods were hit with a 12.5% tariff. China’s foreign ministry spokesperson said on Friday that the country opposes all unilateral tariffs, adding that trade wars benefit no one. Most sectors dropped on Friday. At the same time, semiconductor stocks advanced. Despite Friday’s drop, the benchmark index notched a weekly gain. Meanwhile, the People’s Bank of China injected 500 billion yuan ($73.8 billion) into the banking system through a one-year MLF operation on Friday to support growth and facilitate government bond issuance. Elsewhere, Fitch Ratings said that China’s stronger export-oriented sectors and policy-supported investment continue to offset weaker consumption and uneven private-sector activity. Investors are now looking ahead to a late-July meeting of the Politburo, China’s top decision-making body, where policymakers typically review the economy and fine-tune policy to support growth. “The weak second-quarter data prints call for support measures,” according to DBS analysts.
Japan’s Nikkei 225 Stock Index closed sharply lower today, tracking overnight losses on Wall Street after earnings from Alphabet and Tesla revived concerns over excessive AI spending. Sentiment was further dampened by escalating tensions in the Middle East, which pushed Brent crude above $100 a barrel and rekindled inflation concerns. Technology stocks led the declines on Friday. Still, the Nikkei ended the holiday-shortened week higher. Government data released on Friday showed that Japan’s core inflation accelerated in June for the first time in three months, keeping the Bank of Japan on track for further interest-rate increases. Separately, a survey showed that Japan’s manufacturing activity remained broadly resilient in July, with output expanding at its fastest pace since February 2014. Meanwhile, Japanese government bond yields climbed on Friday as the weak yen and higher oil prices fueled expectations that the Bank of Japan would raise interest rates sooner. The U.S. Treasury Department on Thursday called for further BOJ rate hikes, warning that inflation has eroded households’ purchasing power even as nominal wages increased notably. “Monetary policy normalization would help anchor inflation expectations and reduce excessive exchange rate volatility,” the Treasury said in its semi-annual currency report. In other news, foreign investors sold a net 79.5 billion yen worth of Japanese stocks in the week through July 18th, following net purchases of 742.6 billion yen the previous week, according to Ministry of Finance data. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -5.57% to 32.88.
The Japanese June National Core CPI rose +1.6% y/y, in line with expectations.
The Japanese July S&P Global Manufacturing PMI (preliminary) stood at 54.7, weaker than expectations of 55.0.
Pre-Market U.S. Stock Movers
Intel (INTC) climbed over +6% in pre-market trading after the chipmaker posted upbeat Q2 results and issued Q3 revenue guidance that smashed Wall Street estimates.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - July 24th
American Express Company (AXP), NextEra Energy (NEE), Verizon Communications (VZ), Southern Copper (SCCO), HCA Healthcare (HCA), SLB N.V. (SLB), Charter Communications (CHTR), Tenet Healthcare (THC), The Ensign Group (ENSG), Booz Allen Hamilton Holding (BAH), Lamb Weston Holdings (LW), Flagstar Bank, National Association (FLG), Gentex (GNTX), Sensient Technologies (SXT), First Hawaiian (FHB), Stock Yards Bancorp (SYBT), The Gorman-Rupp Company (GRC), Helix Energy Solutions Group (HLX), MetroCity Bankshares (MCBS), Southside Bancshares (SBSI), Central Pacific Financial (CPF), First Financial (THFF), World Acceptance (WRLD), Universal Health Realty Income Trust (UHT), Ponce Financial Group (PDLB), PCB Bancorp (PCB), Northeast Community Bancorp (NECB), Isabella Bank (ISBA), Princeton Bancorp (BPRN), Hawthorn Bancshares (HWBK), Virginia National Bankshares (VABK), Meridian (MRBK), Ohio Valley Banc (OVBC), First Capital (FCAP), Finward Bancorp (FNWD), GrafTech International (EAF), BV Financial (BVFL), Affinity Bancshares (AFBI), Rhinebeck Bancorp (RBKB), CEA Industries (BNC), Sound Financial Bancorp (SFBC), First Northwest Bancorp (FNWB).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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