Stock Market Update

Equity futures point to a modestly higher start following Friday's winning session that saw the Nasdaq Composite notch new record high levels while the S&P 500 fell just short. 

This week's action will feature a lighter batch of earnings reports, though there are more consequential economic data releases than last week, including the Tuesday release of the July CPI, with PPI to follow on Thursday, both of which will influence the FOMC's monetary policy. 

On Saturday, Vice Fed Chair Michelle Bowman stated that she believes three rate cuts could be in order this year, citing recent softer labor data as a motivator for the cuts. 

President Trump will meet with Russian President Vladimir Putin on Friday in Alaska to discuss an end to the Ukrainian war, though The New York Times reports that Ukrainian President Volodymyr Zelenskyy rejected a peace proposal that includes swapping of territories, which President Trump initially suggested. 

Additionally, President Trump is considering inviting the Ukrainian president to the summit in Alaska, according to NBC News.

On the trade front, Treasury Secretary Scott Bessent said in a Nikkei interview that tariff rates imposed by the U.S. could go down if trade balances improve with countries. 

In corporate news:

• Apple (AAPL 228.45, -0.85, +0.4%) is expected to introduce an AI voice control feature for its Siri feature. 
• Advanced Micro Devices (AMD, 169.84, -2.92, -1.7%) and NVIDIA (NVDA, 181.57, -1.16, -0.6%) will give 15% of their chip sale revenue from China to the U.S. government, according to Financial Times. 
• Intel (INTC 20.48, +0.53, +2.7%) CEO Lip-Bu Tan will visit the White House today and meet with President Trump after the president previously called for Tan's removal from his CEO position.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a higher note while Japan's Nikkei was closed for Mountain Day. Japan's Nikkei: HOLIDAY, Hong Kong's Hang Seng: +0.2%, China's Shanghai Composite: +0.3%, India's Sensex: +0.9%, South Korea's Kospi: -0.1%, Australia's ASX All Ordinaries: +0.5%.

In news:

• President Trump expressed hope that China will significantly increase its soybean purchases from the U.S. ahead of tomorrow's expiration of the temporary extension of lower tariffs.
• China narrowly avoided deflation in July (0.0% yr/yr; expected -0.1%), though producer prices contracted for the 34th consecutive month.
• South Korea's exports through the first ten days of August were down 4.3% yr/yr but chip exports rose 12.0%.
• The U.S. government will charge NVIDIA (NVDA) and AMD (AMD) 15% of their revenue generated in China.

In economic data:

• China's July CPI 0.4% m/m (expected 0.3%; last -0.1%); 0.0% yr/yr (expected -0.1%; last 0.1%). July PPI -3.6% yr/yr (expected -3.4%; last -3.6%)

Major European indices trade on a mostly lower note. STOXX Europe 600: -0.1%, Germany's DAX: -0.4%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.4%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: -0.3%.

In news:

• British Chancellor Reeves is reportedly considering a tax hike in the Autumn budget, though she previously pledged not to increase taxes on income, national insurance, and value-added.
• Defense contractors are under pressure amid speculation that President Trump's planned Friday meeting with Russia's President Putin could end the war in Ukraine.

In economic data:

• Italy's July CPI 0.4% m/m, as expected (last 0.2%); 1.7% yr/yr, as expected (last 1.7%). June trade surplus EUR5.41 bln (expected surplus of EUR7.12 bln; last surplus of EUR6.10 bln)