Stock Market Update

Equity futures point to a flattish opening this morning as negotiations between the U.S. and Iran have stalled ahead of a busy week of mega-cap earnings. 

The Wall Street Journal reported that President Trump said future talks with Iran will occur by phone after he cancelled his envoy's trip to Pakistan over the weekend. The IRGC boarded two container ships near the Strait of Hormuz, adding to the volatility. 

Iran offered the U.S. a proposal to reopen the Strait of Hormuz and end the war, but the offer seeks to postpone nuclear talks to a later date, according to Axios. 

On the corporate front, the market has a busy week of earnings ahead that will include earnings reports from five of the "Magnificent Seven" names. Strong leadership from mega-cap and other AI-related names helped power the S&P 500 and Nasdaq Composite to record highs last week despite uneven participation in the broader market. 

This week will also feature the April FOMC decision, though the market is fully pricing in the Fed leaving rates unchanged. 

There is no economic data of note on the calendar today.

In corporate news:

• Eli Lilly (LLY 883.24, -0.72, -0.1%) is set to acquire Ajax Therapeutics for up to $2.3 billion in cash. 
• China blocked Meta Platforms' (META 674.10, -0.93, -0.1%) $2 billion purchase of Manus, according to Financial Times.
• Verizon Communications (VZ 47.87, +1.49, +3.2%) beat EPS expectations by $0.07, missed revenue expectations, and raised FY26 EPS above consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a mostly higher note with Japan's Nikkei (+1.4%) and South Korea's Kospi (+2.2%) reaching fresh records. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.2%, India's Sensex: +0.8%, South Korea's Kospi: +2.2%, Australia's ASX All Ordinaries: -0.2%.

In news:

• There was some encouragement from news that Iran presented a proposal to restore traffic through the Strait of Hormuz, but it is unclear if the U.S. will accept the offer.
• South China Morning Post reported that the Chinese government has developed a cheaper all-iron battery for renewable energy storage.
• Japan's Prime Minister Takaichi said that Japan has secured a stable supply of oil into next year.
• The Bank of Japan will release its latest policy statement overnight, but a rate hike is not expected at this time.

In economic data:

• China's March Industrial Profit 15.5% YTD (last 15.2%)
• Japan's February Leading Index 113.3 (expected 112.4; last 112.0) and Coincident Indicator -1.8% m/m (expected -1.6%; last 3.4%)
• Singapore's March Industrial Production 4.7% m/m (last -1.2%); 10.1% yr/yr (last 3.3%)

Major European indices are starting the week on a higher note with some encouragement from indications that U.S.-Iran negotiations are continuing despite the lack of an in-person meeting over the weekend. STOXX Europe 600: +0.4%, Germany's DAX: +0.8%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.8%.

In news:

• Expectations for rate hikes from the European Central Bank and the Bank of England are on the rise due to elevated energy prices.
• Banks in the U.K. are preparing for higher taxes if Prime Minister Starmer is replaced by someone leaning farther to the left.
• Standard & Poor's reaffirmed Greece's BBB rating with a Stable outlook while Germany's AAA rating was also affirmed.

In economic data:

• Germany's May GfK Consumer Climate -33.3 (expected -30.2; last -28.1)
• U.K.'s April CBI Distributive Trades Survey -68 (expected -42; last -52)