Stock Market Update

Equity futures point to a modestly higher opening this morning as some of Monday's pressure from crude oil and Treasury yields eases. The positive bias comes after the major averages started the week with sizable losses amid volatility in both markets, with Treasury yields remaining particularly elevated even after crude oil reversed most of an early surge.

Oil prices are pulling back this morning alongside signs that Middle Eastern crude flows are recovering despite the ongoing conflict. Middle Eastern crude exports have risen to around their highest level since the Iran war began, as the U.S. Navy and Gulf producers have become more effective at keeping shipments moving through the Strait of Hormuz and alternative routes, weakening Iran's leverage over the waterway, according to The Wall Street Journal.

Treasury yields are also easing from Monday's elevated levels, providing some relief for equities. Technology and semiconductor stocks, which were notable sources of weakness in yesterday's session, are poised for a rebound at the open as the broader market attempts to recover from Monday's decline.

Today's remaining economic calendar:

• 9:00 AM ET: July FHFA Housing Price Index; prior 0.0%
• 9:00 AM ET: July S&P Case-Shiller Home Price Index; prior 2.1%
• 10:00 AM ET: September Consumer Confidence; Briefing.com consensus 90.0; prior 89.4
• 10:00 AM ET: August JOLTs - Job Openings; Briefing.com consensus 7.150M; prior 7.271M

In corporate news:

• OpenAI decided against releasing latest artificial intelligence model due to safety concerns, according to The Wall Street Journal.
• Advanced Micro Devices (AMD 616.51, +8.64, +1.4%) entered a definitive agreement to acquire private AI model and research lab World Labs in an all-stock transaction valued at about $8.2 bilion.
• CarMax (KMX 60.15, +3.60, +6.37%) beat fiscal second-quarter earnings and revenue estimates, with combined retail and wholesale used-vehicle unit sales increasing 14.7% from a year ago. The company plans to resume share repurchases in the third quarter.
• Summit Therapeutics (SMMT 18.25, +2.77, +17.89%) secured a $2 billion strategic investment and expanded its ivonescimab oncology collaboration.

Reviewing overnight developments:

According to Nikkei, elevated oil prices and global bond yields remained in focus across Asia, alongside expectations for additional policy support in China.

In news:

• Nikkei reported that the Reserve Bank of Australia raised its key policy rate by 25 basis points to 4.60%, as expected.
• Nikkei reported that investors remained cautious ahead of China's National Day holiday, while expectations grew that Beijing could accelerate government bond issuance and increase fiscal support.

In economic data:

• Japan's July Leading Index 1.5% m/m (expected 1.7%; prior 0.0%)

Equity Markets:

• Japan's Nikkei: -0.5%
• Hong Kong's Hang Seng: -0.5%
• China's Shanghai Composite: +0.2%
• India's Sensex: -0.4%
• South Korea's Kospi: -0.3%
• Australia's All Ordinaries: +0.4%

Technology, healthcare, and mining shares provided support in Europe, while energy shares lagged as oil prices and bond yields remained elevated.

In news:

• U.S.-Iran negotiations remained a key macro focus amid a lack of diplomatic progress.
• UK shop-price inflation eased to 1.4% year over year in September from 1.5% in August.

In economic data:

• Eurozone's September Consumer Confidence -16.5 (expected -16.5; prior -16.5); September Industrial Sentiment -3.8 (expected -4.8; prior -5.0); September Business and Consumer Survey 97.9 (expected 99.0; prior 98.4)
• Spain's September CPI 0.3% m/m (prior 0.7%) and 4.9% yr/yr (expected 4.6%; prior 4.3%)
• Italy's August PPI 2.4%v m/m (prior 2.3%) and 10.9% yr/yr (prior 7.7%); July Industrial Sales 1.7% m/m (prior -0.9%) and 4.8% yr/yr (prior 3.2%)
• U.K.'s August Mortgage Approvals 54.92K (expected 56.00K; prior 55.93K); BoE Consumer Credit GBP2.464B (expected GBP1.900B; prior GBP2.097B); September Shop Price Index 1.4% yr/yr (expected 1.5%; prior 1.5%)

Equity Markets:

• STOXX Europe 600 : +0.1%
• Germany's DAX : +0.5%
• U.K.'s FTSE 100 : +0.4%
• France's CAC 40 : +0.3%
• Italy's FTSE MIB : +0.9%
• Spain's IBEX 35 : +0.7%