Stock Market Update

Equity futures point to a modestly higher opening as stocks look to extend a solid start to the holiday-abbreviated week. Mega-cap tech and semiconductor stocks benefited from a solid buy-the-dip bid, helping the S&P 500 and Nasdaq Composite reclaim around half of last week's losses. The DJIA posted a more modest gain but managed a record closing high of its own.

Today marks the last session of the second quarter, with CNBC reporting the DJIA is on pace for its best first half since 2021. The major averages all hold solid year-to-date gains, though the market has weathered its fair share of oil-driven volatility amid the conflict in Iran. Bloomberg reports that tanker traffic through the Strait of Hormuz has picked up as the U.S. and Iran prepare for a fresh round of talks in Qatar today.

In corporate news:

• House Speaker Mike Johnson says President Trump will not veto bipartisan housing legislation, according to Politico.
• AeroVironment (AVAV 185.30, +46.30, +33.2%) beat EPS expectations by $0.38, beat revenue expectations, and guided FY27 EPS below consensus with revenues in-line.
• SpaceX (SPCX 164.10, -0.08, -0.1%) is talking with the Trump administration about donating stock for "Trump Accounts" according to Semafor.

Equity indices in the Asia-Pacific region had a mixed showing on Tuesday. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: +0.5%, India's Sensex: -0.3%, South Korea's Kospi: +1.0%, Australia's ASX All Ordinaries: -0.5%.

In news:

• China's Manufacturing and Non-Manufacturing PMI readings for June reflected slight expansion, which was a touch better than expected.
• The dollar has continued climbing against the yen, sending the Japanese currency to its lowest level since late 1986.
• Japan's Finance Minister Katayama said that she won't comment on specific currency levels and that decisive action is an option for policymakers.
• China's electric vehicle exports for May were up 48% year-over-year.

In economic data:

• China's June Manufacturing PMI 50.3 (expected 50.1; last 50.0) and June Non-Manufacturing PMI 50.2 (expected 49.9; last 50.1)
• Japan's May Industrial Production 0.5% m/m (expected 0.6%; last 0.5%), May jobs/applications ratio 1.17 (expected 1.18; last 1.18), and May Unemployment Rate 2.5%, as expected (last 2.5%). May Housing Starts 33.9% yr/yr (expected 31.8%; last 11.4%) and Construction Orders -6.7% yr/yr (last -32.3%)
• South Korea's May Retail Sales 0.1% m/m (last -3.5%), May Industrial Production -3.0% m/m (last -0.7%); -0.9% yr/yr (last 1.5%). May Service Sector Output 1.3% m/m (last -0.9%)
• Australia's June ANZ Business Confidence 36.6 (last 10.0). May Private Sector Credit 0.7% m/m (expected 0.6%; last 0.7%) and May Housing Credit 0.5% m/m (lats 0.6%)

Major European indices trade in the green. STOXX Europe 600: +1.1%, Germany's DAX: +1.5%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.6%, Italy's FTSE MIB: +1.1%, Spain's IBEX 35: +0.6%.

In news:

• Flash June CPI readings from France and Italy were cooler than expected, resulting in the deceleration of their respective year-over-year rates while Germany's reading, which will be released at 8:00 ET, is expected to show a steady year-over-year inflation rate of 2.6%.
• Shipping giant Maersk raised its outlook for the year due to strong demand in the container shipping market.
• European Central Bank President Lagarde said that the June rate hike was a deliberate, unanimous, move, while policymaker Wunsch said that another rate hike could be needed quickly.
• Germany is looking for about EUR400 mln of spending cuts in the EU's EUR2 trln budget.
• The U.K.'s Q1 GDP reading was revised down to 0.9% yr/yr from 1.1%, weighing on expectations for a rate hike from the Bank of England.

In economic data:

• Germany's May Retail Sales 1.1% m/m (expected 0.0%; last -0.4%); 1.8% yr/yr (expected 0.0%; last -0.6%). May Import Price Index 0.7% m/m (expected 0.4%; last 1.2%); 6.8% yr/yr (last 5.3%)
• U.K.'s Q1 GDP 0.6% qtr/qtr, as expected (last 0.1%); 0.9% yr/yr (expected 1.1%; last 0.9%). Q1 Business Investment 0.9% qtr/qtr (expected 0.7%; last -3.0%); -1.3% yr/yr (expected -1.8%; last 1.8%). Q1 Current Account deficit GBP22.1 bln (expected deficit of GBP22.2 bln; last deficit of GBP27.2 bln)
• France's flash June CPI -0.2% m/m (expected 0.0%; last 0.1%); 1.8% yr/yr (expected 2.1%; last 2.4%). May PPI 3.0% yr/yr (last 2.3%). May Consumer Spending 0.5% m/m (expected 0.2%; last -0.5%)
• Italy's flash June CPI 0.0% m/m (expected 0.2%; last 0.4%); 3.0% yr/yr (expected 3.1%; last 3.2%). May PPI -0.2% m/m (last 0.3%); 7.3% yr/yr (last 6.8%)
• Spain's April Current Account surplus EUR1.88 bln (last surplus of EUR4.61 bln)
• Swiss June KOF Leading Indicators 101.2 (expected 99.0; last 98.6)