U.S. equity futures were mixed ahead of Friday's New York open, with semiconductor stocks showing weakness in premarket trading following their recent strong gains. Traders also digested the easing crude prices even as they braced for the unofficial start of second-quarter earnings season and the U.S. trading debut of South Korean memory-chip giant SK Hynix.
The yield on the U.S. 10-year Treasury note eased to around 4.53% on Friday, marking a second consecutive session of declines as lower oil prices helped ease inflation concerns and reduced fears of aggressive policy tightening, following reports that the U.S. and Iran will continue peace negotiations despite a recent escalation in hostilities. The move extends a partial unwind of this week's risk-off trade, when the 30-year yield climbed to 5.07% as oil prices surged amid renewed tensions between the U.S. and Iran after President Trump signaled the ceasefire was "over."
Earnings in Focus
Along with SK Hynix's debut, traders also look ahead to second-quarter earnings from Delta Air Lines, for fresh signals on investor appetite heading into earnings season. Delta Air Lines headlines the pre-open earnings slate. Delta slipped ahead of second-quarter earnings, due early Friday, with analysts seeing earnings down almost 30% year over year to $1.48 per share, but revenue rising over 13% to $18.85 billion.
Thursday's reports offered a mixed early read on the consumer. PepsiCo posted mixed results for its second quarter, with adjusted earnings of $2.20 per share falling short of the $2.21 a share expected from analysts polled by LSEG. U.S. food and beverage performance "moderated" with consumer budgets tightening due in part to rising gas prices, the company said. Shares of Levi Strauss were off by more than 4%, despite the company reporting a top and bottom line beat, with adjusted earnings coming in at 28 cents per share, compared to expectations for 24 cents.
Stocks to watch
- CCC Intelligent Solutions (CCC) climbed about 8% in premarket on reports that the software company is exploring strategic alternatives, including a potential sale.
- Strategy — Gained nearly 5% as Bitcoin climbed
- Chipmakers, Micron Technology, Intel and Nvidia were all down, dragged by profit taking following their recent advance.
- SpaceX - down more than 1% amid the stock's volatile ride post its initial public offering (IPO) and Nasdaq 100 inclusion
Macro backdrop
The economic calendar for the day is light, with only the USDA's World Agricultural Supply and Demand Estimate (WASDE) July report and Commodity Futures Trading Commission's (CFTC) weekly Commitment of Traders (COT) report due for the day. The former could create some ripples in the agricultural commodity futures market, while the latter will give insights into market positioning of speculative and commercial traders.
The slow calendar tees off into a busy week ahead, which will see the release of some first-tier U.S. economic data, including the June consumer and producer price inflation (CPI) data, retail sales and a slew Fed speeches, including Chair Kevin Warsh's Semi-Annual Monetary Policy testimony before Congress.
Premarket snapshot
| Instrument | Level / Move | Context |
|---|---|---|
| S&P 500 futures (Sep, E-mini) | ~7,586 | Little changed near recent range highs |
| Dow futures (E-mini) | 52,888 | higher after rising modestly on Thursday, although off its peak above 53K. |
| Nasdaq 100 futures | 29,847 | Chip strength led by Micron, Sandisk, SK Hynix |
| US 10-year Treasury yield | ~4.54% | Second consecutive daily decline |
| US 30-year Treasury yield | ~5.06% | Tested key psychological level midweek |
| Brent crude | $76.20/down 0.12% | Off week's highs above $80 as Iran talks continue |
| WTI crude | $71.97/down 0.15% | Prices had risen more than 4% Wednesday |
| VIX | Below 16 | rose to nearly 19 midweek |
Check out MarketFramework's Trade Validator tool for retail sentiment toward futures contract.
Overseas Markets
Asian stocks closed solidly higher on Friday, tracking the positive lead from Wall Street overnight. South Korea's Kospi continued it recovery, rising for a second straight session, after tanking into bear territory earlier this week. European stocks are showing tentativeness in early trading.
