The S&P 500 futures currently trade poins below fair value.

Equity indices in the Asia-Pacific markets finished mixed on Wednesday, with investors cautious ahead of the Trump-Xi summit and technology shares coming under renewed pressure in Hong Kong. China's Shanghai Composite fell 0.4%, while the Shenzhen Component declined 0.6% after preliminary US-China talks failed to produce an agreement to extend the trade truce, keeping trade, AI, Taiwan, and other geopolitical issues in focus ahead of Thursday's meeting. Bank of China (-1.1%), CNOOC (-2.4%), CATL (-1.2%), Suzhou Dongshan Precision Manufacturing (-2.6%), and Weichai Power (-4.2%) led the mainland weakness. Hong Kong's Hang Seng Index dropped 1.0%, snapping a three-session winning streak, with Alibaba (-4.2%), Tencent (-2.4%), Xiaomi (-3.8%), MiniMax (-4.0%), and Z.AI (-12.4%) among the notable technology decliners. Brent crude falling below $100 provides some relief from recent inflation concerns, although it does little to offset the cautious tone surrounding US-China relations. Japan's Nikkei 225 was closed for the Autumnal Equinox holiday but will return to action on Thursday.

• In economic data:
  • South Korea's September Consumer Confidence 106.6 (prior 104.5)
  • Australia's September S&P Global Manufacturing PMI 49.3 (prior 52.0) and S&P Global Services PMI 51.4 (prior 53.2)
  • India's September HSBC Manufacturing PMI 55.7 (prior 52.8) and HSBC Services PMI 55.8 (prior 54.1)
  • Hong Kong's August CPI 0.1% m/m (prior 0.2%) and 1.7% yr/yr (prior 1.7%)

---Equity Markets---

• Japan's Nikkei: closed for holiday
• Hong Kong's Hang Seng: -1.0%
• China's Shanghai Composite: -0.4%
• India's Sensex: +0.4%
• South Korea's Kospi: +0.9%
• Australia's All Ordinaries: +0.1%

Major European indices trade mostly lower on Wednesday, with falling oil prices and signs of progress in US-Iran diplomacy providing some support while investors continue to monitor geopolitical risks. Separately, improved Composite PMI readings for September are driving speculation about another ECB rate hike in October. Germany's DAX 40 is down 0.8% despite stronger-than-expected services activity, with SAP, MTU Aero Engines, Siemens, and Rheinmetall gaining between 0.8% and 2.0%, while Daimler Truck, Scout24, Deutsche Telekom, and Infineon Technologies come under pressure. France's CAC 40 is down 0.1% after flash Composite PMI jumps to 51.2 in September from 48.5, returning to expansion territory, with LVMH (+1.3%), Safran (+1.1%), BNP Paribas (+1.0%), and EssilorLuxottica (+1.0%) exhibiting relative strength. London's FTSE 100 trades slightly lower, with JD Sports (+1.0%) advancing after maintaining guidance, while Diageo (-0.8%) slips after naming Joanne Wilson its next CFO. Brent crude oscillates amid diplomatic efforts to end the Middle East conflict and potentially reopen the Strait of Hormuz. Investors also monitor the Trump-Xi summit, with trade and broader US-China relations expected to feature in the talks.

• In economic data:
  • Eurozone's September HCOB Manufacturing PMI 52.7 (expected 52.6; prior 52.7) and Services PMI 53.0 (expected 51.4; prior 51.6); Composite PMI 53.1 (expected 51.7; prior 52.0)
  • Germany's September HCOB Manufacturing PMI 53.8 (expected 54.1; prior 54.3) and Services PMI 52.9 (expected 49.9; prior 49.7); Composite PMI 53.8 (expected 51.8; prior 51.8)
  • France's September HCOB Manufacturing PMI 50.3 (expected 50.9; prior 51.1) and Services PMI 51.4 (expected 48.3; prior 48.0); Composite PMI 51.2 (prior 48.5)
  • U.K.'s September S&P Global Manufacturing PMI 52.0 (expected 51.5; prior 51.7) and Services PMI 51.7 (expected 52.0; prior 52.5); Composite PMI 51.7 (expected 52.0; prior 52.5)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.8%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: -0.1%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: -0.4%

The S&P 500 futures currently trade five points below fair value.

On the earnings front, General Mills (GIS 36.59, +0.21, +0.6%) beat EPS expectations by $0.03, reported revenue in line, and reaffirmed its FY27 EPS guidance.

KB Home (KBH 47.15, -1.44, -3.0%) beat earnings estimates by $0.16 on in-line revenue, though its homebuilding operating income margin fell to 5.2% from 8.1% due to a lower housing gross profit margin and a higher SG&A expense ratio.

Equity futures point to a slightly lower opening this morning following Tuesday's mixed session, with relatively little in the way of new developments overnight to provide a clear directional catalyst.

Crude oil is modestly higher after settling lower yesterday as investors continue to monitor developments surrounding Iran and the Strait of Hormuz. The U.S. and Iran held talks yesterday, with Iran presenting conditions for reopening the strait that reportedly include lifting the U.S. naval blockade, releasing frozen Iranian assets, and ending the war on all fronts, according to Axios.

AI also remains in focus ahead of President Trump's meeting with Chinese President Xi Jinping. The two leaders have pushed back against slowing AI development, even as the U.S. and China explore potential areas of cooperation surrounding risks from increasingly capable AI models.

For now, however, neither development has produced a significant shift in the market backdrop, leaving equity futures modestly lower ahead of the open.

In corporate news: 

• Meta Platforms' (META 739.00, +2.41, +0.3%) Muse could disrupt wealth managers, financial companies, and brokerages, according to The Wall Street Journal. 
• IONQ (IONQ 45.80, +5.06, +12.4%) moves sharply higher after demonstrating the industry's first end-to-end real-time quantum error correction decoder running on a standard CPU.
• Microsoft (MSFT 502.63, +4.63, +0.9%) was upgraded to Buy from Hold at Stifel, with a target price of $575

On the U.S. data front:

• 09/19 MBA Mortgage Applications Index -1.5%; prior -4.1%

Today's remaining economic calendar:

• 9:45 AM ET: September S&P Global U.S. Manufacturing PMI - Prelim; prior 53.9
• 9:45 AM ET: September S&P Global U.S. Services PMI - Prelim; prior 56.5
• 10:30 AM ET: 09/19 EIA Crude Oil Inventories; prior -0.64M

In corporate news:

• Worthington Enterprises (WOR 68.76, +9.82, +16.66%) beat fiscal first-quarter earnings and revenue estimates, with revenue increasing 13.2% from a year ago.
• Cracker Barrel (CBRL 48.99, +3.51, +7.72%) topped fiscal fourth-quarter earnings and revenue estimates and issued fiscal 2027 revenue guidance in line with expectations.
• NN Inc. (NNBR 3.68, +0.31, +9.20%) raised its fiscal 2026 revenue and adjusted EBITDA guidance, with the revenue range extending above the FactSet consensus.
• AC Immune (ACIU 2.81, +0.08, +2.93%) said its Parkinson's vaccine candidate met all primary safety, tolerability, and immunogenicity endpoints in Part 1 of a Phase II trial.
• European Markets Update: DAX -0.8%, FTSE -0.1%, CAC -0.1% (VGK 88.75, -0.68, -0.76%). Major European indices trade mostly lower on Wednesday, with falling oil prices and signs of progress in US-Iran diplomacy providing some support while investors continue to monitor geopolitical risks. Separately, improved Composite PMI readings for September are driving speculation about another ECB rate hike in Octob.

Reviewing overnight developments:

Nikkei reported that Asia-Pacific markets finished mixed as investors remained cautious ahead of the Trump-Xi summit and technology shares faced renewed pressure in Hong Kong. Japan's market was closed for a holiday.

In news:

• Preliminary U.S.-China talks did not produce an agreement to extend the trade truce, leaving trade, artificial intelligence, Taiwan, and other geopolitical issues in focus.
• Technology shares in Hong Kong weakened, while lower Brent crude prices provided some relief from recent inflation concerns.

In economic data:

• South Korea's September Consumer Confidence 106.6 (prior 104.5)
• Australia's September S&P Global Manufacturing PMI 49.3 (prior 52.0) and S&P Global Services PMI 51.4 (prior 53.2)
• India's September HSBC Manufacturing PMI 55.7 (prior 52.8) and HSBC Services PMI 55.8 (prior 54.1)
• Hong Kong's August CPI 0.1% m/m (prior 0.2%) and 1.7% yr/yr (prior 1.7%)

Equity Markets:

• Japan's Nikkei: closed for holiday
• Hong Kong's Hang Seng: -1.0%
• China's Shanghai Composite: -0.4%
• India's Sensex: +0.4%
• South Korea's Kospi: +0.9%
• Australia's All Ordinaries: +0.1%

Major European markets trade mostly lower as investors assess geopolitical developments and stronger preliminary business activity readings.

In news:

• Falling oil prices and signs of progress in U.S.-Iran diplomacy have provided some support, though geopolitical risks remain in focus.
• The stronger eurozone Composite PMI reading has prompted speculation about another ECB rate increase in October.

In economic data:

• Eurozone's September HCOB Manufacturing PMI 52.7 (expected 52.6; prior 52.7) and Services PMI 53.0 (expected 51.4; prior 51.6); Composite PMI 53.1 (expected 51.7; prior 52.0)
• Germany's September HCOB Manufacturing PMI 53.8 (expected 54.1; prior 54.3) and Services PMI 52.9 (expected 49.9; prior 49.7); Composite PMI 53.8 (expected 51.8; prior 51.8)
• France's September HCOB Manufacturing PMI 50.3 (expected 50.9; prior 51.1) and Services PMI 51.4 (expected 48.3; prior 48.0); Composite PMI 51.2 (prior 48.5)
• U.K.'s September S&P Global Manufacturing PMI 52.0 (expected 51.5; prior 51.7) and Services PMI 51.7 (expected 52.0; prior 52.5); Composite PMI 51.7 (expected 52.0; prior 52.5)

Equity Markets

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.8%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: -0.1%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: -0.4% ---FX--- EUR/USD: -0.4% to 1.1413 GBP/USD: -0.4% to 1.3285 USD/CHF: +0.3% to 0.8229

[BRIEFING.COM] The major averages finished mixed on Tuesday as continued strength in semiconductor stocks and improving participation beneath the surface offset pronounced weakness in financials and other pockets of the large-cap market. The S&P 500 ended unchanged following Monday's sizable advance, while the Nasdaq Composite (+0.5%) outperformed, reaching record highs. The DJIA (-0.4%) lagged, while the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.3%) showed relative strength.

Semiconductor stocks remained the clearest source of support throughout the session. The PHLX Semiconductor Index climbed 2.1%, helping the information technology sector (+0.6%) finish among the better-performing groups, with memory stocks again showing pronounced strength. Chip stocks reached fresh highs during the session after President Trump reiterated his support for continued AI development during his UN General Assembly address, saying the U.S. should be careful with the technology but should not stifle its growth.

The broader mega-cap picture was less supportive than Monday, however. The communication services sector (-1.0%) finished among the laggards after trading higher early in the session, limiting the benefit of semiconductor strength for the cap-weighted S&P 500. That divergence was evident in the stronger performance of small and mid-cap stocks, with the Russell 2000 and S&P Mid Cap 400 both comfortably outperforming the large-cap index.

The financials sector (-1.6%) remained a significant drag through the close. Selling extended across banks, regional banks, insurers, and asset managers amid increased attention to a flattening yield curve, technical weakness across several industry groups, and concerns about softer trading and investment banking activity. Charles Schwab (SCHW 100.35, -6.53, -6.11%), Allstate (ALL 229.36, -13.50, -5.56%), and Wells Fargo (WFC 83.16, -3.38, -3.91%) were particularly pressured, with the group's weakness weighing particularly heavily on the DJIA.

Allstate also faced another potential source of pressure after a New York Times report indicated that Meta Platforms' (META 736.60, -4.65, -0.63% )Muse AI agent has helped users find insurance, highlighting the potential for AI agents to disrupt established consumer-service channels. The same report initially pressured Expedia Group (EXPE 280.70, -0.32, -0.11%), although the stock subsequently recovered after Expedia announced a partnership with Muse to bring AI-powered trip planning to hotels and other travel offerings.

Strength elsewhere was fairly broad. The materials (+1.9%) and consumer staples (+1.2%) sectors finished atop the standings, while the health care sector (+0.6%) also outperformed as Moderna (MRNA 182.56, +9.62, +5.56%) extended its recent surge to fresh multi-year highs.

Homebuilders were another standout pocket of strength, with the iShares U.S. Home Construction ETF climbing 3.2%. Lennar (LEN 83.05, +4.97, +6.37%) remained a notable outperformer after Berkshire Hathaway increased its stake in the company, building on the group's early-session strength.

Crude oil ultimately finished lower despite recovering substantially from its overnight decline. WTI crude settled $0.56 lower (-0.6%) at $95.21 per barrel after President Trump said during his UN address that he believes Iran will reach a deal with the U.S. after the midterm elections. He later said U.S. representatives met with Iranian officials for three hours today in a meeting that went "very well."

The swings in crude were mirrored to some extent in the Treasury market. The overnight decline in oil initially helped pull yields lower, with the 2-year note yield reaching 4.71% and the 10-year note yield falling to 4.92%, before those moves reversed as crude recovered during the session. The 2-year note yield finished unchanged at 4.75%, and the 10-year note yield settled up one basis poiint to 4.97%.

Tuesday's session ultimately featured a sharp divide across the market, with semiconductor strength and gains among small and mid-cap stocks contrasting with pronounced weakness in financials and several mega-cap areas. That dynamic left the S&P 500 little changed, while continued strength in chip stocks helped propel the Nasdaq to record highs

There was no economic data of note today.

• Nasdaq Composite: +17.2% YTD
• Russell 2000: +16.4% YTD
• S&P 500: +13.4% YTD
• S&P Mid Cap 400: +11.2% YTD
• DJIA: +7.9% YTD