OPENING CALL
Stock futures were on the rise Tuesday extending a rally that drove the Dow Jones Industrial Average to a new closing record yesterday.
Investors will be looking out for SpaceX's first set of earnings since its initial public offering in June, due for release after the close of trading on Tuesday. Before that, earnings from Merck, Pfizer, McDonald's and Caterpillar are expected.
Meanwhile, oil bounced back as Iran and President Trump have sent conflicting messages on the status of negotiations on ending the war.
"Stocks are close to records, tech is regaining leadership, and manufacturing data are improving," Tickmill Group said. But, "oil is still hostage to Middle East diplomacy."
Trump said the U.S.'s current offer of talks was Iran's "last chance", after Tehran said it was only negotiating with Oman, and that it had no plans for talks with Washington.
"Oil sold off sharply yesterday on optimism that a Middle East deal might be within reach," ING said. "However, markets may be getting ahead of themselves once again [...] We've been in this situation multiple times before, only to see things unravel."
Investors are also awaiting the June JOLTs report on job openings due today.
"Markets continue to assess the outlook for U.S. monetary policy
following last week's Federal Reserve meeting," ING said. "While policymakers kept rates unchanged, uncertainty over the policy path remains elevated as investors weigh persistent inflation risks against signs of moderating economic momentum."
Stocks to watch
Palantir Technologies jumped over 15% premarket after it reported strong earnings yesterday after the close.
Pfizer, Merck, Amgen, BioNTech: The pharmaceutical companies will report earnings ahead of the opening bell, alongside Spotify Technology and McDonald's. Semiconductor company Advanced Micro Devices will report after markets close.
Prologis, Segro: Warehouse landlord Prologis agreed to buy its British rival for $18.8 billion. Segro shares inched up while Prologis stock was little changed premarket.
Space Exploration Technologies is set to deliver its first-ever earnings report as a public company after markets close.
Watch For:
U.S. International Trade in Goods & Services for June; Canada International Merchandise Trade for June; Caterpillar 2Q earnings; McDonald's 2Q earnings; Merck & Co. 2Q earnings; Pfizer 2Q earnings
Today's Top Headlines/Must Reads:
- Only the Bank of Japan Can Arrest the Yen's Decline
- The AI Boom Is Transforming the American Economy Beyond Recognition
- How ICE Is Weaponizing Social Media Against Its Critics
MARKET WRAPS
Forex:
The dollar rose
as renewed concerns over the U.S.-Iran tensions lifted oil prices and the impact of recent U.S.-Japanese joint interventions to support the yen starts to fade.
The euro traded flat. The currency could struggle to rise against the dollar as it looks modestly overvalued, ING said.
Bonds:
Treasury yields were stable to slightly higher in early trade, driven by the long end of the curve, as inflation fears due to energy prices continue to prevail.
The 10-year Treasury note
was trying to find some footing in the 4.715-4.805% [yield] support zone, J.P. Morgan said. "The tentative rebound triggered a momentum divergence buy signal, but the lack of deep oversold conditions leaves us hesitant to fade the weakness at this point."
Energy:
In early European trading, Brent crude was up 1.3% and WTI was up 0.6%. The benchmarks settled 4.7% and 5.1% lower, respectively, in the previous session after Iran rejected President Trump's suggestion that talks were under way.
Metals:
Gold prices rose in early European trading as investors weighed mixed signals on U.S.-Iran talks and awaited a series of U.S. jobs data this week.
Iron ore
Iron ore prices were volatile early Tuesday while analysts were expecting further downside pressure from weak fundamentals. Global iron-ore shipments remained elevated, leading to a continued buildup in port inventories, Everbright Futures said.
TODAY'S TOP HEADLINES
BP's Oil Profits Surge as Fossil Fuel Pivot Continues With Plan to Offload U.S. Biogas Unit
BP posted higher profits on a strong oil trading performance and higher energy prices, and put its U.S. biogas business up for sale as it continues its pivot back to fossil fuels.
The British oil major reported an underlying replacement cost profit-a similar metric to the net income that U.S. oil companies report-of $5.73 billion for the second quarter of the year, surging from the $3.2 billion it reported in the first quarter.
HSBC Posts Sharply Higher Quarterly Profit, Plans $1 Billion Share Buyback
HSBC Holdings reported a surge in second-quarter net profit on stronger earnings across its businesses and resumed its share buybacks with an up to $1 billion plan.
The London-based bank said Tuesday that net profit jumped for the three months ended June, exceeding analysts' estimates, as pretax profit increased across its four key segments, rising especially sharply in the business of supporting affluent clients with their finances.
Toyota Net Profit Surges 76%, Boosts Earnings Outlook
Toyota Motor reported a 76% surge in first-quarter net profit on tailwinds including increased sales of hybrid electric-vehicle sales, and raised its annual earnings forecasts.
The Japanese carmaker said Tuesday that net profit was 1.48 trillion yen, equivalent to $9.42 billion, for the three months ended June, up sharply from Yen841.3 billion a year earlier. That far exceeded the Yen978.49 billion estimate in a poll of analysts by data provider Quick.
Saudi Aramco Profit Jumps 33% on Higher Oil Prices Amid Iran War
Saudi Arabia's national oil company reported a 33% jump in second-quarter profit as higher crude prices lifted earnings despite lower sales volumes amid disruption to shipping through the Strait of Hormuz.
Saudi Arabian Oil Co., known as Aramco, the world's top oil exporter, posted adjusted net income of $33.4 billion for the three months through June compared with $25.2 billion in the same period last year.
Only the Bank of Japan Can Arrest the Yen's Decline
Japanese authorities have found themselves having to step into markets again and again to prop up the yen, this time with assistance from the U.S. government. To escape this "mowing the lawn" dilemma, the country, and specifically the Bank of Japan, has to address the root causes of yen weakness.
Viewed through one lens, the yen appears undervalued. Ask anyone who has traveled to Japan recently and they will rave about the bargains to be had. That is a stark shift from the era of yen overvaluation 15 years ago, when a dollar was worth about 80 yen and a trip to the country was a painful expense.
The AI Boom Is Transforming the American Economy Beyond Recognition
The U.S. economy keeps putting more eggs in the artificial-intelligence basket.
Tech companies are spending hundreds of billions of dollars to meet AI computing needs and issuing billions of dollars of debt to help make those purchases.
Iran Says No Talks With the U.S. on Hormuz Strait
Iran said Monday that there weren't any talks under way with the U.S. nor were any meetings planned, after President Trump said he had called off a major strike on the country to provide more time for negotiations on freeing up traffic in the Strait of Hormuz.
Trump said over the weekend that he had prepared to greenlight what he described as the biggest military attack since World War II before America's allies intervened.
Iran Says No Talks With the U.S. on Hormuz Strait
Iran said Monday that there weren't any talks under way with the U.S. nor were any meetings planned, after President Trump said he had called off a major strike on the country to provide more time for negotiations on freeing up traffic in the Strait of Hormuz.
Trump said over the weekend that he had prepared to greenlight what he described as the biggest military attack since World War II before America's allies intervened.
Taiwan and U.S. Promote Cooperation in Answer to Trump and China
TAIPEI-Taiwan is opening up about long-concealed U.S. military training while Americans note their cooperation with the island, sending a message to China that ties are strong despite comments by President Trump that appeared to put the relationship in jeopardy.
Taiwan's military collaboration with the U.S. "is far closer than you might imagine," Defense Minister Wellington Koo told a small group of reporters, a rare recognition of a secretive American role in helping Taiwan strengthen its defense and deter China.
Migrant Crisis Pits Spain's Leader Against Critics Across Europe
As most migrants left a tiny Spanish territory in North Africa this weekend, Prime Minister Pedro Sánchez pivoted to a new crisis-one playing out in Europe's halls of power.
His country had just experienced an extraordinary breach of sovereignty, with some 50,000 migrants illegally pouring into Ceuta from neighboring Morocco.
How ICE Is Weaponizing Social Media Against Its Critics
Tired_Thumb is far from alone.
In recent months, ICE has deployed a round-the-clock digital dragnet to scour the public internet-from Facebook to Instagram to X-for speech that could endanger the agency's mission. The government has paid millions to private contractors to surface everything from potential threats to agents to activities that could disrupt ICE's operations, according to federal documents, contractors and former Homeland Security Investigations agents.
Write to priscila.barrera@wsj.com
TODAY IN CANADA
Earnings:
Chorus Avn. 2Q
Dexterra Grp. 2Q
Hut 8 Corp. 2Q
iA Fincl 2Q
Intl Pet Corp 2Q
K-Bro Linen 2Q
Martinrea Int 2Q
Orla Mining 2Q
RB Global Inc 2Q
SSR Mining 2Q
Comments