Stock Market Update

Equity futures point to a lower opening this morning after the major averages finished with modest gains yesterday, supported by broad strength. The market saw some relief in long-dated Treasury yields after the Treasury announced it would increase long-end liquidity buybacks by at least double.

That helped offset another bounce in oil prices, though rising crude is weighing on the market this morning. Crude oil is currently up $2.85 (+3.4%) to $87.24 per barrel after President Trump said on Truth Social that Iran will be hit with "the most crushing economic operation ever taken against any country."

Separately, semiconductor stocks, which limited gains at the index level yesterday, continue to move lower in the premarket this morning.

Today's data slate will include the release of Weekly Initial Claims (Briefing.com consensus 206,000; prior 209,000), Continuing Claims (prior 1.777 mln), and August Philadelphia Fed Survey (Briefing.com consensus 25.0; prior 41.4) at 8:30 ET.

In corporate news:

• OpenAI paused AI training for two weeks amid security issues, according to The Wall Street Journal.
•  Deere (DE 583.01, +2.38, +0.4%) beat EPS expectations by $0.41 and beat revenue expectations.
• Walmart (WMT 107.44, -6.86, -6.0%) beat EPS expectations by $0.07, reported revenues in-line, saw comparable sales grow 2.6%, and guided Q3 EPS below consensus while raising FY27 EPS and net sales growth guidance.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a higher note with South Korea's Kospi (+5.9%) recovering its loss from Wednesday. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: +0.2%, India's Sensex: +0.8%, South Korea's Kospi: +5.9%, Australia's ASX All Ordinaries: +0.5%.

In news:

• Japanese debt extended its rebound from Wednesday after the U.S. Treasury announced an increase to its maximum buybacks of longer-dated Treasuries.
• On a related note, Nikkei reported that Japan may implement tax incentives for retail JGB investors.
• SK Hynix is reportedly joining Samsung in raising prices of its products by up to 15%.
• The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.00% and 3.50%.
• Bank Indonesia left its policy rate at 5.75%, as expected.

In economic data:

• Japan's July trade deficit JPY634.5 bln (expected deficit of JPY680 bln; last deficit of JPY409.9 bln). July Imports 27.8% yr/yr (expected 26.5%; last 25.4%) and Exports 23.2% yr/yr (expected 19.9%; last 19.3%)
• Hong Kong's July CPI 0.2% m/m (last 0.0%); 1.7% yr/yr, as expected (last 2.0%). July Unemployment Rate 3.7% (last 3.7%)
• Australia's August MI Inflation Expectations 4.9% (last 4.7%). July Employment Change -15,800 (expected 11,700; last 80,200), July full Employment Change 16,300 (last 48,900). July Unemployment Rate 4.5% (expected 4.4%; last 4.4%) and Participation Rate 66.9%, as expected (last 67.0%)

Major European indices trade on a mostly lower note while Italy's MIB (+0.3%) outperforms slightly. STOXX Europe 600: -0.1%, Germany's DAX: -0.5%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.3%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.1%. 

In news:

• A tanker was reportedly hijacked in the Gulf of Aden, adding to the list of shipping difficulties in the Middle East.
• Sweden's central bank left its policy rate at 1.75% but added that the rate is likely to be raised later in the year.
• German bunds are modestly higher even though PPI accelerated to 3.0% in July from 1.8% in June.

In economic data:

• Eurozone's June Construction Output -1.34% m/m (last 0.19%)
• Germany's July PPI 1.1% m/m (expected 0.5%; last -0.3%); 3.0% yr/yr (expected 2.7%; last 1.8%)
• U.K.'s August CBI Industrial Trends Orders -25 (expected -40; last -45)
• Swiss July trade surplus CHF8.73 bln (last surplus of CHF5.049 bln)