September S&P 500 E-Mini futures (ESU26) are up +0.19%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.64% this morning as investors shrugged off the latest escalation in the Middle East and shifted some of their focus back to the AI trade.
Chip and AI infrastructure stocks advanced in pre-market trading after Bloomberg reported that SK Hynix’s U.S. listing is more than seven times oversubscribed. Micron Technology (MU), Marvell Technology (MRVL), and Intel (INTC) were up more than +3%.
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Meanwhile, U.S. forces targeted 90 military sites in Iran, including missile and drone facilities near the Strait of Hormuz, on Wednesday night, while Iran launched strikes on U.S. bases in Bahrain and Kuwait. U.S. President Donald Trump said on Wednesday that Iran had reached out in search of a deal, though Tehran made no mention of any new talks. The price of WTI crude wavered on Thursday.
Investors are now awaiting U.S. jobless claims data and remarks from Federal Reserve officials.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. Software stocks declined, with Workday (WDAY) sliding over -4% and Intuit (INTU) dropping more than -3%. Also, airlines and other travel stocks slid as oil prices surged, with Carnival (CCL) and American Airlines Group (AAL) falling more than -3%. In addition, Navitas Semiconductor (NVTS) dropped over -4% after Wolfspeed filed a patent infringement lawsuit against the company. On the bullish side, most chip and AI infrastructure stocks advanced, with Broadcom (AVGO) climbing more than +4% after Apple said its expanded agreement with the company is expected to exceed $30 billion.
Economic data released on Wednesday showed that U.S. consumer credit unexpectedly fell by -$0.18 billion in May, weaker than expectations of $16.9 billion. Also, U.S. May wholesale inventories were revised lower to +0.1% m/m from the preliminary estimate of +0.3% m/m.
Meanwhile, minutes of the Federal Open Market Committee’s June 16-17 meeting, released on Wednesday, showed growing concern among policymakers about inflation, even as worries over the labor market eased somewhat. “Participants generally assessed that information received over the intermeeting period suggested that upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit,” according to the FOMC minutes. Officials broadly agreed that they would need to raise interest rates if inflation remained elevated this year due to the Middle East conflict, tariffs, or robust demand driven by the AI investment boom. At the same time, most participants said they expected the central bank would “maintain or eventually lower the target range for the federal funds rate” if inflation pressures dissipated relatively soon.
“One thing is certain: future policy is heavily contingent on the political situation in the Middle East. If we can tease out any forward guidance from the minutes, it would be the committee is working through a wide range of scenarios and will not commit to a specific scenario until the incoming data provides necessary clarity,” said Jeffrey Roach at LPL Financial.
U.S. rate futures have priced in a 72.7% probability of no rate change and a 27.3% chance of a 25 basis point rate hike at July’s monetary policy meeting.
Today, investors will focus on U.S. Initial Jobless Claims data, set to be released in a couple of hours. Economists expect this figure to be 218K, compared to last week’s number of 215K.
The National Association of Realtors’ existing home sales data will also be released today. Economists foresee this figure coming in at 4.19 million in June, compared to 4.17 million in May.
In addition, market participants will be looking toward speeches from New York Fed President John Williams and Dallas Fed President Lorie Logan.
On the earnings front, snacks and soda maker PepsiCo (PEP) is scheduled to report its Q2 results today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.58%, up +0.13%.
The Euro Stoxx 50 Index is up +0.54% this morning, rebounding after three straight sessions of losses. Chip stocks were among the biggest gainers on Thursday, buoyed by reports of strong demand for SK Hynix’s American depositary receipt offering. Mining, bank, and industrial stocks also climbed. At the same time, healthcare stocks sank, weighed down by a more than -9% drop in AstraZeneca Plc (AZN.LN) after the company said a trial of its Wainua drug for a rare heart disease failed to meet its primary goal. Data from the Federal Statistics Office released on Thursday showed that Germany’s exports unexpectedly rose in May, supported by U.S. trade, as manufacturers remained relatively resilient despite uncertainty stemming from the Middle East conflict. Meanwhile, Spain’s IBEX 35 outperformed its regional peers, rebounding from Wednesday’s sharp drop after U.S. President Trump called Spain “very generous,” following his order to cut off all trade with the country over its NATO contribution. Elsewhere, UBS Global Research on Thursday lifted its year-end target for Europe’s STOXX 600 index to 690 from 630, citing resilient earnings. Investor focus now shifts to the accounts of the European Central Bank’s June policy meeting, due later in the session. In corporate news, Computacenter (CCC.LN) surged over +9% after the company said it expects its full-year results to come in above market expectations.
Germany’s Exports and Imports data were released today.
The German May Exports unexpectedly rose +0.9% m/m, stronger than expectations of -0.3% m/m.
The German May Imports unexpectedly fell -2.5% m/m, weaker than expectations of +0.1% m/m.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.65%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.38%.
China’s Shanghai Composite Index closed higher today, led by advances in chip shares. Semiconductor stocks rallied on Thursday after memory chipmaker Changxin Memory Technologies said it would begin book-building on July 15th for its planned Shanghai IPO, with the offering expected to raise 29.5 billion yuan ($4.34 billion). Data from the National Bureau of Statistics released on Thursday showed that China’s producer price inflation rose in June to its highest level since July 2022 as the effects of the conflict in the Middle East continued to ripple through the economy. At the same time, China’s consumer price growth slowed more than expected last month, pointing to continued weakness in domestic demand. Meanwhile, the People’s Bank of China said on Wednesday it would maintain an appropriately loose monetary policy and step up financial support to boost domestic consumption, adding that the economy was facing an imbalance between strong supply and weak demand. In other news, Reuters reported that China’s interbank bond market regulator has issued guidance to curb short-term bond issuance by local government financing vehicles, marking Beijing’s latest effort to reduce debt risks. In corporate news, Insilico Medicine climbed over +7% in Hong Kong after the drugmaker said it expects to report a profit and a sharp increase in revenue for the first half.
The Chinese June CPI fell -0.3% m/m and rose +1.0% y/y, weaker than expectations of -0.2% m/m and +1.1% y/y.
The Chinese June PPI rose +4.1% y/y, in line with expectations.
Japan’s Nikkei 225 Stock Index closed higher today, snapping a three-session losing streak as technology stocks rebounded. Semiconductor-related stocks led the gains on Thursday, tracking overnight advances in their U.S. peers. Sentiment was further buoyed by a Bloomberg report that SK Hynix’s U.S. listing is more than seven times oversubscribed. Still, the Nikkei pared earlier gains of as much as 2.4% as fresh U.S. strikes on Iran kept investor optimism in check. Meanwhile, the Bank of Japan on Thursday maintained its assessment for all nine regions in its quarterly report on regional economies, saying they were recovering moderately, picking up, or picking up moderately. However, the BOJ said the Middle East conflict is likely to prompt more firms to raise prices later this year, with cost pass-through occurring at a faster pace than in the past. That should strengthen the case for further policy tightening by the BOJ, which remains committed to raising interest rates. In other news, foreign investors sold a net 22.2 billion yen worth of Japanese stocks in the week to July 4th, compared with net sales of 1.82 trillion yen recorded 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 up +0.39% to 43.82.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks advanced in pre-market trading after Bloomberg reported that SK Hynix’s U.S. listing is more than seven times oversubscribed. Micron Technology (MU), Marvell Technology (MRVL), and Intel (INTC) were up more than +3%.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - July 9th
PepsiCo (PEP), WD-40 Company (WDFC), The Simply Good Foods Company (SMPL), Simulations Plus (SLP), Byrna Technologies (BYRN).
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.