Equity futures point to a higher opening this morning as the market attempts to look past the latest ramp in geopolitical hostilities.

The S&P 500 and Nasdaq Composite notched record highs yesterday morning amid strength in software and select mega-cap names, but the major averages finished lower following an intraday bounce in oil prices. The U.S. and Iran exchanged fire yesterday in the Strait of Hormuz, but President Trump told reporters that it did not constitute a breach of the current ceasefire, according to The New York Times.

Oil is slightly higher this morning, hovering around the $95 per barrel mark.

Elsewhere, the market has another batch of earnings reports to wrap up a busy week on the earnings front that acted as a major catalyst for the recent push to record highs.

The market also has an important data release on the calendar this morning in the form of the April Employment Situation Report. The report is always closely watched for its potential rate-cut implications, though the surge in energy prices due to the war in Iran has pushed out the market's rate cut expectations significantly.

In corporate news:

• The White House is distancing itself from increased artificial intelligence regulation, according to Politico.
• Airbnb (ABNB 140.74, +0.28, +0.2%) missed EPS expectations by $0.04, beat revenue expectations, and guided Q2 revenues above consensus.
• Akami Technologies (AKAM 143.00, +26.31, +22.5%) beat EPS expectations and reported revenues in-line. The company said that a leading frontier model provider has committed to $1.8 billion over seven years for CIS.

Equity indices in the Asia-Pacific region ended the week on a mostly lower note with Japan's Nikkei (-0.2%) tagging a fresh record while South Korea's Kospi (+0.1%) also extended its push into record territory, recording a slim gain. Japan's Nikkei: -0.2%, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: UNCH, India's Sensex: -0.7%, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: -1.4%.

In news:

• Kospi saw its biggest single-day foreign outflow of nearly $5 bln yesterday.
• Malaysia's central bank left its policy rate at 2.75%, as expected, while Indonesia's central bank warned about a big intervention to support the rupiah.

In economic data:

• Japan's April Services PMI 51.0 (expected 51.2; last 53.4). March Overall Wage Income 2.7% yr/yr (expected 3.2%; last 3.4%) and Overtime Pay 1.9% yr/yr (last 3.4%)
• South Korea's March Current Account surplus $37.33 bln (last surplus of $23.19 bln)

Major European indices are on track for a mostly lower finish to the week. STOXX Europe 600: -0.5%, Germany's DAX: -0.9%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.8%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.4%.

In news:

• Maersk CEO said that he has not observed any demand destruction due to the conflict with Iran with volumes returning to levels from the start of the year.
• President Trump gave the EU a July 4 deadline to fulfill the trade agreement or face higher tariffs.
• Local elections in the U.K. resulted in a trouncing for the ruling Labour party and big losses for Conservative opposition while Reform had the best showing.
• Prime Minister Starmer said today that he will not resign despite the public's sharp turn against his party but calls for his departure are growing louder.
• Secretary of State Rubio is meeting with Italy's Prime Minister Meloni today.

In economic data:

• Germany's March trade surplus EUR14.3 bln (expected surplus of EUR17.8 bln; last surplus of EUR19.5 bln). March Imports 5.1% m/m (expected 0.8%; last 4.9%) and Exports 0.5% m/m (expected -1.7%; last 3.6%). March Industrial Production -0.7% m/m (expected 0.4%; last -0.5%); -3.0% yr/yr (last -0.3%)
• Spain's March Industrial Production 1.8% yr/yr (last -0.9%)
• Swiss Q2 SECO Consumer Climate -40 (expected -46; last -30)

[BRIEFING.COM] The stock market pulled back from this morning's record-highs as oil prices bounced off their earlier lows, with broad weakness sending the S&P 500 (-0.4%), Nasdaq Composite (-0.1%), and DJIA (-0.6%) lower.

The S&P 500 and Nasdaq Composite did manage to capture fresh all-time highs, as a strong showing from software stocks and resilience across mega-cap names initially pushed the indices higher despite relative weakness in the broader market.

The information technology sector (+0.1%) managed a slightly higher finish, but gave up most of its gain that exceeded 1.0% earlier in the session. Software stocks still posted impressive gains, buoyed by several monster rallies across the latest batch of names to report earnings.

Datadog (DDOG 188.73, +45.02, +31.33%) and Fortinet (FTNT 107.97, +18.02, +20.03%) were the best-performing S&P 500 components, contributing to the iShares GS Software ETF's (+3.6%) solid gain. Meanwhile, semiconductor stocks faced some profit-taking after yesterday's rally, sending the PHLX Semiconductor Index 2.7% lower.

NVIDIA (NVDA 211.38, +3.55, +1.71%), however, managed a higher finish, which, in conjunction with Microsoft's (MSFT 420.92, +6.96, +1.68%) gain, helped the sector avoid a loss for the day.

Relative strength across other "magnificent seven" names kept the communication services sector (+0.1%) in positive territory and kept losses modest in the consumer discretionary sector (-0.2%). However, those sectors gave up most of their earlier gains following the intraday bounce in oil prices.

Crude oil traded firmly lower for much of the morning amid lingering optimism that the U.S. and Iran could soon strike a peace deal. Oil bounced off its early lows just before midday, further pressuring the broader market and eroding gains across the technology sector. Crude oil futures ultimately settled today's session $0.33 lower (-0.4%) at $94.89 per barrel.

The U.S. is still awaiting Iran's response to an updated peace proposal, though a senior Iranian official said Iran will not allow the U.S. to reopen the Strait of Hormuz with "an unrealistic plan", according to The Wall Street Journal.

Even with the intraday bounce in oil prices, the energy sector (-1.8%) finished as one of the worst-performing S&P 500 sectors.

The materials (-1.8%) and industrials (-1.6%) sectors posted similar losses. Profit-taking in Caterpillar (CAT 895.26, -31.38, -3.39%) and weakness across electrical product names weighed on industrials, while DuPont (DD 48.37, -1.70, -3.40%), Intl Flavors (IFF 78.26, -4.67, -5.63%), and other recent post-earnings winners pressured materials.

Meanwhile, the latest batch of earnings reports outside of the software space lacked the broader market impact seen earlier this week. McDonald's (MCD 283.66, -0.44, -0.15%), Arm Holdings plc (ARM 213.33, -23.97, -10.10%), and DoorDash (DASH 171.35, +3.38, +2.01%) were among the more notable names to report, though their results did little to alter the overall tone of the session.

Outside of the S&P 500, the Russell 2000 (-1.6%) and S&P Mid Cap 400 (-1.2%) finished with notably steeper losses than the major averages, reflecting the softer tone across the broader market.

Despite today's pullback, the losses remained relatively modest in the context of the market's recent run to record highs. Software stocks provided a notable area of strength following another solid round of earnings reports, though the intraday rebound in oil prices and profit-taking across cyclical areas of the market weighed on broader participation throughout the afternoon.

U.S. Treasuries tried to extend their midweek rally, but some early resistance invited an intraday pullback from two days of gains. The 2-year note yield settled up five basis points to 3.92%, and the 10-year note yield settled up four basis points to 4.39%.

• Russell 2000: +14.4% YTD
• S&P Mid Cap 400: +11.4% YTD
• Nasdaq Composite: +11.0% YTD
• S&P 500: +7.2% YTD
• DJIA: +3.2% YTD

Reviewing today's data:

• Q1 Productivity-Prel 0.8% (Briefing.com consensus 1.8%); Prior was revised to 1.6% from 1.8%, Q1 Unit Labor Costs-Prel 2.3% (Briefing.com consensus 2.7%); Prior was revised to 4.6% from 4.4%
  • The key takeaway from the report is that, while productivity undershot expectations, unit labor costs decelerated in a move that should placate inflation hawks at the Fed. That won't change the prevailing belief that the Fed isn't going to be cutting rates soon, but it will temper some of the budding fears about entertaining the idea of a rate hike.
• Weekly Initial Claims 200K (Briefing.com consensus 205K); Prior was revised to 190K from 189K, Weekly Continuing Claims 1.766 mln; Prior was revised to 1.776 mln from 1.785 mln
  • The key takeaway from the report is its quiet disposition in the sense that it isn't showing wide swings in either initial claims or continuing claims, which suggests some welcome steadiness in the labor market.
• February Construction Spending -0.2% (Briefing.com consensus 0.2%); Prior was revised to -1.9% from -0.3%, March Construction Spending 0.6% (Briefing.com consensus 0.4%); Prior 0.2%
  • The key takeaway from the report is that the strength in March was concentrated in the residential sector and particularly in new single-family construction.
• Consumer credit increased by $24.9 billion in March (Briefing.com consensus: $12.5 billion), the largest increase in a year, following a downwardly revised $8.9 billion increase (from $9.5 billion) in February.
  
  • The key takeaway from the report is the recognition that consumer credit saw its largest expansion in a year, driven by both revolving and nonrevolving credit. The former will stir some concerns about consumers perhaps needing to use credit more in the face of higher energy prices to pay for basic needs.