September S&P 500 E-Mini futures (ESU25) are trending up +0.19% this morning, extending yesterday’s gains as rising confidence in the strength of the U.S. economy and positive earnings reports bolstered investors’ risk appetite.

In yesterday’s trading session, Wall Street’s major indices closed higher, with the S&P 500 and Nasdaq 100 notching new record highs. Snap-On (SNA) surged nearly +8% and was the top percentage gainer on the S&P 500 after the company reported stronger-than-expected Q2 results. Also, PepsiCo (PEP) climbed more than +7% and was the top percentage gainer on the Nasdaq 100 after the beverages and snacks company posted better-than-expected Q2 results and maintained its full-year outlook. In addition, Lucid Group (LCID) jumped over +36% after the company announced a self-driving partnership with Uber and Nuro. On the bearish side, Elevance Health (ELV) plunged more than -12% and was the top percentage loser on the S&P 500 after the health insurer cut its full-year earnings guidance.

Economic data released on Thursday showed that U.S. retail sales grew +0.6% m/m in June, stronger than expectations of +0.1% m/m, while core retail sales, which exclude motor vehicles and parts, increased +0.5% m/m, stronger than expectations of +0.3% m/m. Also, the U.S. Philly Fed manufacturing index rose to a 5-month high of 15.9 in July, stronger than expectations of -1.2. In addition, the number of Americans filing for initial jobless claims in the past week unexpectedly fell -7K to a 3-month low of 221K, compared with the 233K expected. Finally, the U.S. import price index rose +0.1% m/m in June, weaker than expectations of +0.3% m/m.

“The consumer came back to life in June. Other data like initial jobless claims and Philly Fed also painted the picture of a strong economy,” said David Russell at TradeStation. “While it’s good for growth overall, it makes it harder to justify rate cuts.”

Fed Governor Adriana Kugler said on Thursday that the central bank should continue to hold interest rates steady “for some time,” citing accelerating inflation as tariffs begin to drive up prices. At the same time, Fed Governor Christopher Waller stated that policymakers should lower interest rates this month to support a weakening labor market. Also, San Francisco Fed President Mary Daly stated that the inflationary impact of tariffs may be more muted than previously anticipated, reiterating that two interest rate cuts this year remain a “reasonable” expectation.

Meanwhile, U.S. rate futures have priced in a 97.4% probability of no rate change and a 2.6% chance of a 25 basis point rate cut at the July FOMC meeting.

Today, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. Economists, on average, forecast that the preliminary July figure will stand at 61.4, compared to 60.7 in June.

U.S. Building Permits (preliminary) and Housing Starts data will also be reported today. Economists expect June Building Permits to be 1.390M and Housing Starts to be 1.290M, compared to the prior figures of 1.394M and 1.256M, respectively.

On the earnings front, notable companies like American Express (AXP), Charles Schwab (SCHW), 3M (MMM), Truist Financial (TFC), and Schlumberger (SLB) are slated to release their quarterly results 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 ahead of pre-season expectations of 2.8%.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.443%, down -0.47%.

The Euro Stoxx 50 Index is up +0.41% this morning as investors monitor corporate earnings reports and remain hopeful that companies can weather U.S. tariffs. Defense stocks outperformed on Friday, with Saab AB (SAABB.S.DX) surging over +11% after the Swedish defense material maker posted better-than-expected Q2 earnings and lifted its sales guidance. The benchmark index is on track to post a modest weekly gain. Data from the Federal Statistical Office released on Friday showed that Germany’s annual producer prices fell in June at the steepest pace since September last year. Meanwhile, investors also remain on alert for any indications of progress in trade talks between the U.S. and the European Union. White House spokeswoman Karoline Leavitt stated at a press conference on Thursday that the EU remains highly eager to negotiate a trade deal with the U.S. Michal Baranowski, Polish undersecretary of state at the Ministry of Economic Development and Technology, said in an interview with CNBC that the EU-U.S. trade agreement framework was “close” prior to the bloc receiving President Trump’s tariff letter. In other corporate news, Electrolux AB (ELUXB.S.DX) tumbled more than -15% after the home appliances manufacturer flagged weak Q2 performance in Europe.

Germany’s PPI data was released today.

The German June PPI came in at +0.1% m/m and -1.3% y/y, in line with expectations.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.50%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.21%.

China’s Shanghai Composite Index ended higher today as Beijing’s efforts to curb cut-throat price competition continued to bolster sentiment. Rare earth stocks outperformed on Friday. The benchmark index notched its fourth consecutive weekly gain. China’s top leaders vowed this week to tighten oversight of aggressive price-cutting by domestic firms, as the world’s second-largest economy continues to grapple with persistent deflationary pressures. UBS analysts expect China to ramp up its efforts against involution competition in the coming quarters. Meanwhile, China’s Commerce Minister Wang Wentao stated on Friday that the country wants to restore commercial relations with the U.S. to a path of healthy and sustainable development, urging the U.S. to act in a manner consistent with its status as a major power. Wang stated at a press conference that China’s trade has strong resilience and momentum, and the country will expand both imports and exports in its next five-year plan. On the negative side, Bloomberg News reported that the U.S. is preparing to impose preliminary anti-dumping duties of 93.5% on graphite imported from China, following a determination that the material had been unfairly subsidized. In corporate news, Piotech climbed over +4% after the semiconductor thin film deposition equipment maker gave a strong Q2 net profit forecast. Investor focus is now on the upcoming Politburo meeting, which is expected to guide economic policy for the remainder of the year.

Japan’s Nikkei 225 Stock Index reversed earlier gains and closed lower today as investors turned cautious ahead of a closely watched election this weekend. Real estate and chip stocks underperformed on Friday. Still, the benchmark index posted gains for the week. Government data released on Friday showed that Japan’s core inflation eased slightly more than expected in June, though it remained well above the Bank of Japan’s target. Despite the slowdown, the data underscored the underlying strength of inflation. Capital Economics’ Abhijit Surya said that Japan’s underlying inflation remains elevated and is almost certain to overshoot the BOJ’s projections. “There continues to be a compelling case for the BOJ to resume its tightening cycle later this year,” Surya said. Meanwhile, investors are gearing up for a possible triple dip in Japanese bonds, stocks, and the yen following Sunday’s upper house election, as polls indicate a defeat for Prime Minister Shigeru Ishiba’s Liberal Democratic Party. A loss of majority for the ruling bloc, which is already in the minority in the lower house, risks disrupting economic policy and driving up government spending. That could spark selloffs across assets, according to strategists and investors. Japan’s trade outlook is also on the line as the August 1st deadline for U.S. President Donald Trump’s “reciprocal” 25% tariffs fast approaches. Investors fear that a loss for Ishiba could derail trade talks with the U.S., hurting shares of exporters such as automakers and potentially weighing on the yen. In corporate news, Disco slumped over -8% after the chipmaking device supplier provided below-consensus Q2 shipment guidance. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +1.64% to 24.75.

The Japanese June National Core CPI stood at +3.3% y/y, weaker than expectations of +3.4% y/y.

Pre-Market U.S. Stock Movers

Talen Energy (TLN) surged over +15% in pre-market trading after the company agreed to acquire two Caithness Energy combined-cycle gas-fired plants for $3.5 billion.

Interactive Brokers (IBKR) climbed more than +4% in pre-market trading after the online brokerage platform posted upbeat Q2 results.

Norfolk Southern (NSC) rose over +3% in pre-market trading after the Wall Street Journal reported that Union Pacific was holding talks to acquire the company.

Chipotle Mexican Grill (CMG) gained more than +1% in pre-market trading after BMO Capital upgraded the stock to Outperform from Market Perform with a price target of $65.

Netflix (NFLX) fell over -1% in pre-market trading even after the streaming giant reported stronger-than-expected Q2 results and raised its full-year revenue guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - July 18th

American Express (AXP), Charles Schwab (SCHW), 3M (MMM), Truist Financial Corp (TFC), Schlumberger (SLB), Huntington Bancshares (HBAN), Regions Financial (RF), Ally Financial Inc (ALLY), Autoliv (ALV), Comerica (CMA), Independent Bank (INDB), Veritex Holdings (VBTX).