Stock Market Update

Equity futures point to a mostly higher open after the major averages captured modest gains to start the week in yesterday's session. Gains were relatively broad, but the Russell 2000 and S&P Mid Cap 400, which have outperformed so far this year, traded lower for a second consecutive session. 

Meanwhile, mega-cap stocks traded mostly higher ahead of a busy week of earnings that will see four "magnificent seven" stocks report earnings. Three of those names captured solid gains yesterday, and the entire magnificent seven group trades modestly higher in the premarket. 

Though mega-cap earnings kick off tomorrow, the market has a sizable mixed batch of earnings reports to assess this morning, which adds some buzz to a somewhat quiet morning of headlines. 

There are still a few lingering geopolitical headlines, but the market continues to largely look past these. In particular, President Trump threatened to raise the tariff rate on South Korean imports to 25% from 15% since they have not yet passed the trade deal made last year with the U.S. However, Reuters reports that South Korea has assured the Trump administration on its investment pledges. 

In corporate news:

• Boeing (BA 245.77, -2.66, -1.1%) beat revenue expectations. The company's backlog grew to a record $682 billion, and the company reported positive free cash flow. 
• General Motors (GM 82.51 +3.08, +3.9%) beat EPS expectations by $0.24, missed revenue expectations, and guided FY26 EPS in-line.
• UnitedHealth (UNH 295.37, -56.27, -16.0%) beat EPS expectations by $0.01, reported revenues in-line, and guided FY26 EPS above consensus with revenues below consensus. The stock comes under additional pressure this morning after the Trump administration proposed roughly flat rates for Medicare insurers next year, according to The Wall Street Journal. 
• United Parcel Service (UPS 111.00, +4.03, +3.8%) beat EPS expectations by $0.18, beat revenue expectations, and guided FY26 revenues above consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a higher note with South Korea's Kospi (+2.7%) powering to another fresh record even though President Trump said that the tariff on imports from South Korea will be increased to 25% from 15% because South Korean legislature has not passed the trade agreement that was made with the U.S. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: +1.4%, China's Shanghai Composite: +0.2%, India's Sensex: +0.4%, South Korea's Kospi: +2.7%, Australia's ASX All Ordinaries: +0.9%.

In news:

• South Korea's parliament is still expected to vote on the deal by the end of February.
• China's Ministry of Commerce said that it will create conditions for attracting foreign investment.
• China warned its citizens against traveling to Japan for Lunar New Year, claiming "severe" safety threats.

In economic data:

• China's December Industrial Profit 0.6% YTD (last 0.1%)
• Japan's December Corporate Services Price Index 2.6% yr/yr (expected 2.7%; last 2.7%). November BoJ Core CPI 1.9% (expected 2.0%; last 2.2%)
• South Korea's January Consumer Confidence 73.0 (last 70.0)
• Hong Kong's December trade deficit $63.3 bln (last deficit of $48.5 bln). December Imports 30.6% m/m (last 18.1%) and Exports 26.1% m/m (last 18.8%)
• Australia's December NAB Business Survey 9 (last 7) and Business Confidence 3 (last 2)
• New Zealand's December Credit Card Spending -0.3% yr/yr (last 4.4%)

Major European indices trade on a mostly higher note while Germany's DAX (-0.1%) has been weighed down by automakers after the EU signed a trade deal with India. STOXX Europe 600: +0.4%, Germany's DAX: -0.1%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.2%.

In news:

• Germany's economy minister said that he expects some debt-fueled growth this year but does not expect it to be sustainable.
• European Central Bank policymaker Kocher said that "a lot" has happened since the last ECB meeting and that the ability to act quickly and decisively is important. This comes after multiple ECB policymakers said that policy is in a good place in recent weeks.

In economic data:

• France's January Consumer Confidence 90, as expected (last 90)
• Spain's Q4 Unemployment Rate 9.93% (expected 10.20%; last 10.45%)