Stock Market Update

Equity futures are flat this morning after yesterday's record-setting session for the S&P 500 and Nasdaq Composite, as the market awaits the July PPI release at 8:30 ET. 

The stock market saw broad-based advances yesterday as the market continued its upward trend following Tuesday's July CPI release, which boosted the probability of a September interest rate cut to a near guarantee. 

However, smaller stocks and underperforming sectors have benefitted the most from the developments, with some mega-cap underperformance keeping the gains in the S&P 500 and Nasdaq Composite relatively modest.

The July PPI is expected to show increases month-over-month after a flat reading in June, though a reading in line with expectations will likely further enthuse the market as it anticipates a more favorable interest rate environment. 

The market will also receive the weekly jobless claims report at 8:30 ET, with elevated continuing claims prompting some concerns in recent weeks. 

On the trade front, The New York Times reports that lawyers from the Trump administration have warned federal judges of economic consequences if the courts strike down tariffs.

A separate report from The New York Times states that European leaders are in alignment with President Trump on his strategy for ending the war in Ukraine ahead of his summit with Russian President Vladimir Putin tomorrow.

Elsewhere, House Republicans are preparing a second reconciliation bill focused on Medicaid cuts, according to Politico.

In corporate news:

• Advanced Auto (AAP 61.61, -0.20, -0.3%) beat EPS expectations by $0.13, beat revenue expectations, guided FY25 EPS in-line and reaffirmed FY25 revenue guidance. 
• Cisco Systems (CSCO 69.49, -0.78, -1.1%) beat EPS expectations by $0.01, reported revenues in-line, and guided FY26 EPS and revenues in-line.
• Deere (DE 483.00, -30.54, -6.0%) beat EPS expectations by $0.17 and reported revenues in-line.
• Dillard's (DDS 505.00, +7.07, +1.4%) beat EPS expectations by $0.90, reported revenues in-line, and saw comparable store sales increase 1%.
• A recent explosion at a Nippon Steel (NPSCY 6.81, -0.04, -0.6%) plant could impact investment plans, according to The Wall Street Journal. 
• Tesla (TSLA 341.10, +1.87, +0.6%) sales in Norway increased 24% in the first half of 2025, according to Reuters. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mixed note, though Japan's Nikkei (-1.5%), Hong Kong's Hang Seng (-0.4%), and China's Shanghai Composite (-0.5%) reached fresh 52-week highs before reversing. Japan's Nikkei: -1.5%, Hong Kong's Hang Seng: -0.4%, China's Shanghai Composite: -0.5%, India's Sensex: +0.1%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +0.5%.

In news:

• Lenovo CEO said that the tariff impact has been limited and that his outlook for fiscal 2026 has improved.
• Australia's job growth improved notably in July, though there is still ongoing uncertainty about the likelihood of a rate cut in September.

In economic data:

• South Korea's July Import Price Index -5.9% yr/yr (last -6.2%) and Export Price Index -4.3% yr/yr (last -4.5%)
• India's July WPI Inflation -0.58% (expected -0.30%; last -0.13%). July trade deficit $27.35 bln (last deficit of $18.78 bln)
• Australia's July Employment Change 24,500 (expected 25,300; last 1,000) and full employment change 60,500 (last -36,700). July Unemployment Rate 4.2%, as expected (last 4.3%) and Participation Rate 67.0% (expected 67.1%; last 67.0%)

Major European indices trade on a mostly higher note. STOXX Europe 600: +0.4%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.6%, Italy's FTSE MIB: +1.0%, Spain's IBEX 35: +0.9%.

In news:

• Thyssenkrupp reported a loss for Q3 and lowered its revenue and capital spending guidance for the year due to tariffs.
• Hapag Lloyd reported solid results for the first half of the year, but lowered its earnings forecast for the year. Norway's central bank left its policy rate at 4.25%, but hinted at some easing later this year.

In economic data:

• Eurozone's Q2 GDP 0.1% qtr/qtr, as expected (last 0.6%); 1.4% yr/yr, as expected (last 1.5%). Q2 Employment Change 0.1% qtr/qtr (expected 0.2%; last 0.2%); 0.7% yr/yr (expected 0.6%; last 0.7%). June Industrial Production -1.3% m/m (expected -0.9%; last 1.1%); 0.2% yr/yr (expected 1.7%; last 3.1%)
• U.K.'s Q2 Business Investment -4.0% qtr/qtr (expected 0.1%; last 3.9%); 0.1% yr/yr (last 6.1%). June Construction Output 0.3% m/m, as expected (last -0.5%); 1.5% yr/yr (expected 1.3%; last 1.4%). Q2 GDP 0.3% qtr/qtr (expected 0.1%; last 0.7%); 1.2% yr/yr (expected 1.0%; last 1.3%). June Industrial Production 0.7% m/m (expected 0.3%; last -1.3%); 0.2% yr/yr (expected -0.3%; last -0.2%). June Manufacturing Production 0.5% m/m (expected 0.4%; last -1.0%); 0.0% yr/yr (expected -0.9%; last 1.0%). June trade deficit GBP22.16 bln (expected deficit of GBP21.70 bln; last deficit of GBP22.05 bln). Q1 Labour Productivity -0.6% (expected -0.5%; last 0.3%)
• France's July CPI 0.2% m/m, as expected (last 0.4%); 1.0% yr/yr, as expected (last 1.0%)
• Swiss July PPI -0.2% m/m (expected 0.0%; last -0.1%); -0.9% yr/yr (last -0.7%)