Stock Market Update

Equity futures point to a modestly lower opening this morning as an escalation in hostilities between the U.S. and Iran sends oil prices higher. Stocks are coming off a slightly higher finish that saw the DJIA notch fresh record highs and the S&P 500 capture a record closing high, though gains were limited by some profit-taking across semiconductor names after the group rallied earlier this week.

This morning's weakness is attributed to fresh U.S. strikes against Iran and reports that Iran retaliated against a U.S. airbase in response, according to NBC News. Crude oil is currently up $2.66 (+3.0%) to $91.34 per barrel, which has pushed Treasury yields modestly higher across the curve. However, yields and oil prices are both firmly lower for the week.

Outside of geopolitics, the market has a moderate batch of earnings reports to assess this morning, with several tech and retailer names poised for sharp opening gains after topping expectations.

This morning is also relatively heavy on the economic data front, with notable releases including the April Personal Income and Outlays report, which features the PCE Price Index (Briefing.com consensus 0.5%), weekly initial jobless claims (Briefing.com consensus 214K), and April New Home Sales.

In corporate news:

• Dell (DELL 318.30, +12.98, +4.3%) was awarded a $9.69 billion single-award, firm-fixed-price blanket purchase agreement under the Department of War Enterprise Software Initiative.
• Dollar Tree (DLTR 106.95, +11.08, +11.6%) beat EPS expectations by $0.21, reported revenues in-line, and guided Q2 and FY27 EPS above consensus with revenues in-line.
• Snowflake (SNOW 241.53, +66.27, +37.8%) trades sharply higher in the premarket after a beat-and-raise earnings report and signing a multi-year strategic collaboration agreement with Amazon Web Services.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note while markets in India were closed for a holiday. Japan's Nikkei: -0.5%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: +0.1%, India's Sensex: CLOSED, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: -1.4%.

In news:

• Overall investor sentiment was dampened by reports of U.S. strikes on Iranian targets.
• Japan's extra budget bill will be sent to the parliament next week.
• The Bank of Korea left its policy rate at 2.50%, as expected, though a couple of rate hikes are being planned for the next six months.

In economic data:

• Hong Kong's April trade deficit HKD29.5 bln (last deficit of HKD89.1 bln). April Imports 44.4% m/m (last 41.2%) and Exports 42.9% m/m (last 35.8%)
• Australia's Q1 Building Capital Expenditure -3.8% qtr/qtr (last 2.5%), Q1 Private New Capital Expenditure 6.5% qtr/qtr (expected 1.2%; last 0.7%, and Q1 Plant/Machinery Capital Expenditure 18.1% qtr/qtr (last -1.3%)
• New Zealand's January Budget deficit NZD9.31 bln (last deficit of NZD14.80 bln)

Major European indices trade mostly lower amid some concerns about the lasting power of the U.S.-Iran ceasefire. STOXX Europe 600: -0.8%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -1.1%, France's CAC 40: -0.6%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.6%.

In news:

• European Central Bank Chief Economist Lane said that secondary effects of inflation will be visible for a while even if the energy shock starts to recede, contributing to the market's view that a rate hike will be announced in June.
• The EU is looking to tighten limits on duty-free steel imports from China.

In economic data:

• Eurozone's May Business and Consumer Survey 93.5 (expected 92.8; last 93.2)
• France's April PPI -2.1% m/m (last 1.9%); 2.1% yr/yr (last 0.0%)
• Italy's May Business Confidence 87.9 (expected 87.5; last 87.9) and Consumer Confidence 93.4 (expected 90.1; last 90.8). April PPI 0.3% m/m (last 4.4%); 6.8% yr/yr (last 4.2%)
• Spain's April Retail Sales 0.8% yr/yr (last 4.1%)