September S&P 500 E-Mini futures (ESU25) are trending up +0.13% this morning as investors remain cautiously optimistic that the U.S. may strike more trade deals ahead of President Donald Trump’s August 1st deadline.
The European Union and the U.S. are reportedly close to finalizing a trade agreement that would place 15% tariffs on most imports from the bloc. President Trump hinted at the potential deal on Thursday, stating, “We’re in the process of probably making a very good deal with [the EU] too. They want to make a deal very badly.” In addition, Mr. Trump said that trade partners with the U.S. could reduce tariff rates set to take effect next week by reaching agreements similar to the one secured with Japan.
In yesterday’s trading session, Wall Street’s major indices closed mixed. Alphabet (GOOGL) rose over +1% after the Google parent reported stronger-than-expected Q2 results, boosted by demand for AI products. Also, West Pharmaceutical Services (WST) jumped more than +22% and was the top percentage gainer on the S&P 500 after the maker of injectable medicines posted upbeat Q2 results and raised its full-year guidance. In addition, T-Mobile US (TMUS) climbed over +5% and was the top percentage gainer on the Nasdaq 100 after the company reported better-than-expected Q2 results and boosted its full-year guidance for postpaid net customer additions. On the bearish side, Tesla (TSLA) slumped more than -8% and was the top percentage loser on the Nasdaq 100 after CEO Elon Musk cautioned about tough times ahead for the company as incentives such as the EV tax credit phase out in the U.S.
The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week unexpectedly fell -4K to a 3-month low of 217K, compared with the 227K expected. Also, the U.S. July S&P Global services PMI climbed to 55.2, stronger than expectations of 53.0. At the same time, the U.S. S&P Global manufacturing PMI fell to 49.5 in July, weaker than expectations of 52.7. In addition, U.S. June new home sales rose +0.6% m/m to 627K, weaker than expectations of 649K.
“There are still few signs of major cracks in the labor market,” said Chris Larkin at E*Trade from Morgan Stanley. “And if that picture remains intact, the Fed has one less reason to cut interest rates.”
U.S. rate futures have priced in a 97.4% chance of no rate change and a 2.6% chance of a 25 basis point rate cut at the upcoming monetary policy meeting. Also, expectations for rate cuts later this year were trimmed to less than two following the jobless claims data.
Meanwhile, President Trump clashed with Fed Chair Jerome Powell during a rare presidential visit to the U.S. central bank on Thursday, criticizing the expenses tied to renovating two historic buildings at its headquarters and reiterating his push for lower interest rates.
Today, investors will focus on U.S. Durable Goods Orders and Core Durable Goods Orders data, set to be released in a couple of hours. Economists expect June Durable Goods Orders to plunge -10.4% m/m and Core Durable Goods Orders to edge up +0.1% m/m, compared to the prior figures of +16.4% m/m and +0.5% m/m, respectively.
On the earnings front, notable companies like HCA Healthcare (HCA), Charter Communications (CHTR), Natwest Group (NWG), and Phillips 66 (PSX) are set to report their quarterly figures today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +3.2% increase in quarterly earnings for Q2 compared to the previous year, slightly above the pre-season forecast of +2.8%.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.421%, up +0.29%.
The Euro Stoxx 50 Index is down -0.35% this morning as investors digest disappointing corporate earnings reports and await updates on EU-U.S. trade negotiations before U.S. President Donald Trump’s tariff deadline next week. Financial and mining stocks led the declines on Friday. The benchmark index is on track to notch a weekly loss. A survey released on Friday showed that German business sentiment improved less than expected in July, as firms expressed greater satisfaction with current business conditions. Separately, data showed that Britain’s monthly retail sales partially rebounded in June, providing a glimmer of optimism for the struggling economy. In addition, European Central Bank data showed that bank lending in the Eurozone expanded at the quickest pace in two years in June, continuing a steady recovery driven by lower borrowing costs and a stabilization in the economy. Investor focus remains on whether the European Union will be able to finalize a trade deal with the U.S. ahead of Trump’s August 1st deadline. Reports emerged earlier this week that the EU and the U.S. are making headway on a deal that would impose a 15% tariff on most EU imports. Trump hinted at a possible agreement with the EU on Thursday, stating, “We’re in the process of probably making a very good deal with [the EU] too. They want to make a deal very badly.” Meanwhile, an ECB poll showed on Friday that Eurozone companies are contending with a slowing economy and heightened competition from China as U.S. tariffs dampen confidence and push competitors to explore new markets. In corporate news, Puma Se (PUM.D.DX) plunged over -15% after the German sportswear brand slashed its full-year guidance. Also, Valeo (FR.FP) slid more than -7% after the French car parts supplier lowered its annual sales forecast.
U.K. Retail Sales, U.K. Core Retail Sales, France’s Consumer Confidence, and Germany’s Ifo Business Climate Index were released today.
U.K. June Retail Sales rose +0.9% m/m and +1.7% y/y, weaker than expectations of +1.2% m/m and +1.8% y/y.
U.K. June Core Retail Sales rose +0.6% m/m and +1.8% y/y, weaker than expectations of +1.2% m/m and +2.0% y/y.
The French July Consumer Confidence came in at 89, stronger than expectations of 88.
The German July Ifo Business Climate Index stood at 88.6, weaker than expectations of 89.0.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.33%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.88%.
China’s Shanghai Composite Index ended lower today, pausing its recent rally, as investors took profit ahead of the closely watched Politburo meeting and a new round of U.S.-China trade talks next week. Liquor and consumer stocks led the declines on Friday. Despite the day’s pullback, the benchmark index logged its fifth straight weekly gain, marking its longest winning streak since the rally that began in February 2024. Chinese stocks have been climbing in recent weeks, as sentiment was boosted by Beijing’s measures to rein in excessive competition and overcapacity, as well as signs of improving U.S.-China trade relations. Meanwhile, Chinese Vice Premier He Lifeng is set to meet U.S. Treasury Secretary Scott Bessent in Stockholm next week for a new round of economic and trade talks. Mr. Bessent reiterated on Thursday that trade with China is in a “good place” and that Washington is now positioned to begin discussions with Beijing on rebalancing the Chinese economy. Investors are also looking to the country’s Politburo meeting next week, where policymakers will deliberate on economic policies for the second half of the year. Ahead of these key events, investors will parse China’s industrial profits data for June, due this weekend, for clues on how domestic firms are navigating ongoing trade uncertainty. In corporate news, Lingbao Gold Group Co. climbed over +5% in Hong Kong after the gold mining group projected a jump in first-half profits.
Japan’s Nikkei 225 Stock Index ended lower today as some investors took profit following a strong two-day rally triggered by the country’s trade agreement with the U.S. Chip and chemical stocks led the declines on Friday. Still, the benchmark index posted strong weekly gains. Data released on Friday showed that core consumer inflation in Tokyo eased in July but remained high enough to keep the Bank of Japan’s normalization on track. Separately, BOJ data showed that a key gauge of Japan’s service-sector inflation slowed in June but also remained elevated. In addition, data from the Cabinet Office showed that Japan’s May leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, was revised downward. Meanwhile, Reuters reported on Friday that the U.S.-Japan trade agreement paves the way for the BOJ to potentially hike interest rates again this year, a move the central bank may begin signaling by presenting a less gloomy view on the economic outlook in its quarterly report at next week’s policy meeting. In other news, overseas investors purchased a net 571.9 billion yen ($3.88 billion) of Japanese equities in the week ended July 19th, marking a fourth consecutive week of inflows, supported by a softer yen and a rally in AI-related tech stocks, despite rising concerns ahead of the upper house election. In corporate news, Mitsubishi Motors slumped over -7% after the automaker posted an 84% drop in Q1 operating profit. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.03% to 22.17.
The Japanese July Tokyo Core CPI rose +2.9% y/y, weaker than expectations of +3.0% y/y.
The Japanese June Corporate Services Price Index rose +3.2% y/y, in line with expectations.
The Japanese May Leading Index came in at 104.8, weaker than expectations of 105.3.
Pre-Market U.S. Stock Movers
Intel (INTC) slumped over -5% in pre-market trading after the chipmaker posted an unexpected quarterly loss and issued below-consensus Q3 adjusted EPS guidance.
Deckers Outdoor (DECK) surged nearly +12% in pre-market trading after the company posted upbeat FQ1 results and provided solid FQ2 EPS guidance.
Edwards Lifesciences (EW) climbed over +7% in pre-market trading after the medtech company reported better-than-expected Q2 results and raised the lower end of its full-year sales growth guidance.
Newmont Goldcorp (NEM) rose more than +1% in pre-market trading after the gold miner reported stronger-than-expected Q2 results.
Paramount Global (PARA) gained over +1% in pre-market trading after the Federal Communications Commission approved the company’s merger with Skydance Media.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - July 25th
HCA Healthcare (HCA), Aon (AON), Charter Communications (CHTR), Natwest Group (NWG), Phillips 66 (PSX), Booz Allen Hamilton (BAH), Centene (CNC), Saia (SAIA), AutoNation (AN), OneMain Holdings (OMF), Moog (MOGa), Lear (LEA), Gentex (GNTX), Flagstar Financial (FLG), Sensient Technologies (SXT), Portland General Electric (POR), First Hawaiian (FHB), Trinet Grou (TNET), Stellar Bancorp (STEL), Lakeland Financial (LKFN), Virtus (VRTS), Virtus (VRTS), Gorman-Rupp (GRC), Southside (SBSI), Central Pacific Financial (CPF), Wabash National (WNC), GrafTech (EAF).
