Stock Market Update

Equity futures point to a mostly higher opening this morning, supported by another pullback in crude oil prices and continued momentum across technology and mega-cap stocks. WTI crude is on track for a potential third consecutive decline, providing some additional relief after elevated oil prices and Treasury yields presented significant headwinds earlier in the week.

Stocks finished firmly higher on Thursday, with the S&P 500 snapping a three-session losing streak as semiconductor and mega-cap strength powered a broad rebound from Wednesday's post-FOMC selloff. The Nasdaq Composite led the advance, while lower Treasury yields provided another source of support. Despite yesterday's rebound, the major averages are currently on track for a mixed week-to-date finish. The tech-heavy Nasdaq Composite sits modestly higher for the week, reflecting the relative strength of technology and AI-related stocks despite considerable volatility elsewhere.

The market will also hear from several Federal Reserve officials this morning, including Fed Governor Michelle Bowman and Kansas City Fed President Jeffrey Schmid, as investors continue to assess the policy outlook following Wednesday's rate hike and Fed Chair Kevin Warsh's comments on persistent inflation.

Today's remaining economic calendar:

• 9:15 AM ET: August Industrial Production; Briefing.com consensus 0.3%; prior 0.2%
• 9:15 AM ET: August Capacity Utilization; Briefing.com consensus 76.4%; prior 76.3%
• 10:00 AM ET: August Leading Economic Index; Briefing.com consensus 0.2%; prior 0.2%

In corporate news:

• Netflix (NFLX 72.97, -2.34, -3.2%) moves lower after Wells Fargo downgraded the stock to Underweight from Equal Weight, with a target price of $77.
• Nucor (NUE 261.50, -3.64, -1.37%) issued third-quarter EPS guidance below the FactSet consensus. The company expects improvement in its steel mills and steel products segments, while raw materials earnings are expected to decline.
• Coherent (COHR 300.38, +4.40, +1.49%) expanded its optical line systems portfolio with a full C-band amplifier designed for AI data center networks and 800G coherent optics.
• SK hynix (SKHY 184.91, +1.92, +1.05%) launched SK hynix Ventures to pursue investments and technology partnerships across AI computing, data centers, system software, and optical interconnect technologies.

Reviewing overnight developments:

Markets finished mostly higher, with South Korea returning to little changed for the week. The Bank of Japan raised its policy rate as expected. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: +0.6%, China's Shanghai Composite: +0.9%, India's Sensex: UNCH, South Korea's Kospi: +2.7%, Australia's ASX All Ordinaries: +0.1%.

In news:

• The Bank of Japan raised its policy rate by 25 basis points to 1.25%, though two policymakers opposed the change.
• The U.S. will reportedly delay tariffs targeting excess manufacturing capacity until after Chinese President Xi's visit.
• China is targeting CNY3.5 trillion in pharmaceutical revenue by 2030.
• Reserve Bank of Australia Governor Bullock said rising global bond yields have not been disorderly, while acknowledging that some upside inflation risks are materializing.

In economic data:

• China's August FDI -5.3% YTD (last -6.2%)
• Japan's August National CPI 0.1% m/m (last 0.5%); 1.9% yr/yr (last 1.9%). August National Core CPI 1.7% (expected 1.8%; last 1.8%)
• South Korea's August PPI 0.2% m/m (last -0.4%); 7.9% yr/yr (last 7.7%)
• New Zealand's August FPI 0.3% m/m (last 0.1%). August trade deficit NZD1.35 bln (expected deficit of NZD1.775 bln; last deficit of NZD2.118 bln)

Major indices are lower and on course for a weaker finish to the week, with inflation commentary and fiscal developments in focus. STOXX Europe 600: -0.5%, Germany's DAX: -0.9%, U.K.'s FTSE 100: -0.8%, France's CAC 40: -0.9%, Italy's FTSE MIB: -1.2%, Spain's IBEX 35: -1.1%.

In news:

• Iran reportedly struck another tanker operating in the Strait of Hormuz, though oil prices have retreated.
• French Prime Minister Lecornu is seeking EUR54 billion in savings in the 2027 budget to keep the deficit below 5.5% of GDP.
• British Chancellor Healey is lobbying EU officials to include the U.K. in the bloc's Made in Europe policy.
• ECB officials emphasized avoiding second-round inflation effects, while ECB President Lagarde reiterated that rate decisions will be made meeting by meeting.

In economic data:

• Eurozone's July Current Account surplus EUR27.6 bln (expected surplus of EUR30.7 bln; last surplus of EUR35.1 bln). July Construction Output 0.0% m/m (last -1.53%)
• U.K.'s August Retail Sales 0.5% m/m (expected -0.2%; last -0.5%); 2.4% yr/yr (expected 1.9%; last 1.2%). August Core Retail Sales 0.6% m/m (expected -0.2%; last -0.9%); 2.7% yr/yr (expected 1.9%; last 1.8%)
• Germany's August PPI 1.1% m/m (expected 0.6%; last 1.1%); 4.6% yr/yr (expected 4.1%; last 3.0%)