September S&P 500 futures (ESU23) are down -0.26%, and September Nasdaq 100 E-Mini futures (NQU23) are down -0.35% this morning as U.S. bond yields hit 9-month peaks, while market participants looked ahead to earnings reports from U.S. tech mega-caps Apple and Amazon.

In Wednesday’s trading session, Wall Street’s major averages closed sharply lower, with the benchmark S&P 500 falling to a 2-week low and the tech-heavy Nasdaq 100 dropping to a 3-week low. Advanced Micro Devices Inc (AMD) slid about -7% after analysts expressed concerns over the chip designer’s ambitious targets for an artificial intelligence ramp-up. Also, rate-sensitive mega-cap stocks tumbled after the 10-year T-note yield climbed to an 8-1/2 month high, with Tesla Inc (TSLA) dropping more than -2% and NVIDIA Corporation (NVDA) plunging over -4%. In addition, Devon Energy Corporation (DVN) fell more than -7% after the company posted downbeat Q2 results and reduced its fixed plus variable dividend to $0.49 a share. On the bullish side, CVS Health Corp (CVS) rose over +3% after the healthcare giant reported better-than-expected Q2 results.

On the economic front, the ADP National Employment report showed on Wednesday that private payrolls increased by +324K last month, stronger than expectations of +189K, highlighting the persistent strength of the labor market.

Meanwhile, the U.S. Treasury announced Wednesday an increase in the size of its quarterly sales of longer-term debt for the first time in more than two and a half years. Also, the Treasury plans to continue gradually raising auction sizes to align with the government’s borrowing requirements.

Second-quarter earnings season continues in full flow, and investors await new reports from big-name companies, including Apple (AAPL), Amazon.com (AMZN), ConocoPhillips (COP), Amgen (AMGN), Booking (BKNG), Gilead (GILD), and Airbnb (ABNB).

Today, all eyes are focused on the U.S. ISM non-manufacturing index in a couple of hours. Economists, on average, forecast that the July ISM Non-Manufacturing PMI will stand at 53.0, compared to the previous value of 53.9.

Also, investors will likely focus on U.S. S&P Global Composite PMI, which came in at 53.2 in June. Economists foresee the July figure to be 52.0.

U.S. Unit Labor Costs preliminary data will be reported today. Economists foresee this figure to stand at +2.6% q/q in the second quarter, compared to the first-quarter number of +4.2% q/q.

U.S. S&P Global Services PMI will also be closely watched today. Economists expect July’s figure to be 52.4, compared to June’s value of 54.4.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 227K, compared to last week’s value of 221K.

In the bond markets, United States 10-Year rates are at 4.152%, up +1.86%.

The Euro Stoxx 50 futures are down -1.08% this morning as investors digested key economic data and more earnings reports while awaiting the latest monetary policy decision from the Bank of England. Losses in technology stocks are leading the overall market lower, with Infineon Technologies Ag (IFX.D.DX) plunging over -8% after the chipmaker’s Q4 margin and revenue guidance missed analyst estimates. Data on Thursday showed that the Eurozone’s business activity downturn in July was worse than initially estimated, with manufacturing experiencing a slump and the dominant services industry also facing a slowdown in growth. Meanwhile, the BoE is scheduled to announce its interest rate decision later in the day, with economists expecting a 25 basis-point rate increase. In other corporate news, Deutsche Lufthansa Ag (LHA.D.DX) slid more than -5% amid concerns over debt and higher costs. 

Spain’s Services PMI, Italy’s Services PMI, France’s Services PMI, Germany’s Services PMI, Eurozone’s S&P Global Composite PMI, Eurozone’s Services PMI, U.K.’s Composite PMI, U.K.’s Services PMI, and Eurozone’s PPI data were released today.

The Spanish July Services PMI came in at 52.8, weaker than expectations of 53.4.

The Italian July Services PMI was at 51.5, weaker than expectations of 52.2.

The French July Services PMI arrived at 47.1, weaker than expectations of 47.4.

The German July Services PMI came in at 52.3, stronger than expectations of 52.0.

Eurozone July S&P Global Composite PMI has been reported at 48.6, weaker than expectations of 48.9.

Eurozone July Services PMI was at 50.9, weaker than expectations of 51.1.

U.K. July Composite PMI has been reported at 50.8, stronger than expectations of 50.7.

U.K. July Services PMI came in at 51.5, in line with expectations.

Eurozone June PPI arrived at -0.4% m/m and -3.4% y/y, weaker than expectations of -0.2% m/m and -3.1% y/y.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.58%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.68%.

China’s Shanghai Composite today closed higher after a private survey revealed that the services sector in the country grew more than anticipated in July. Data showed on Thursday that China’s services activity expanded at a slightly quicker pace in July, driven by a surge in business during the summer travel season. At the same time, Morgan Stanley downgraded MSCI China shares to Equal Weight on Wednesday, citing the ongoing negative earnings revisions and weak return on equity and profit margins. “Despite the policy easing signals from the July Politburo meeting, key issues, including local government financing vehicle debt, property and labor markets, and the geopolitical situation, need to improve significantly for sustainable capital inflows and further re-rating,” Morgan Stanley analysts said in a note. Meanwhile, Evergrande Property Services Group Ltd., a unit of the heavily indebted developer, tumbled over -47% after the company resumed trading for the first time since March 2022. In other news, China stated on Thursday that it is “willing to maintain communications” with the United States on a potential future visit by Chinese Foreign Minister Wang Yi to Washington, D.C.

The Chinese July Caixin Services PMI stood at 54.1, stronger than expectations of 52.5. 

At the same time, Japan’s Nikkei 225 Stock Index closed sharply lower today, tracking overnight losses on Wall Street, as the rise in yields in both the United States and Japan dampened investors’ appetite for equities. The 10-year Japanese government yield hit a more than 9-year high on Thursday, tracking a rise in long-term U.S. Treasury yields. Data showed on Thursday that Japan’s service sector activity expanded at a slightly slower rate in July as new business growth eased and cost pressures remained high. Meanwhile, TDK Corp plunged about -10% after the sensor maker slashed its full-year guidance. Also, Yamaha Corp tumbled over -14% after the musical instruments maker cut its annual profit guidance. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +8.21% to 19.51.

The Japanese July Services PMI came in at 53.8, weaker than expectations of 53.9. 

Pre-Market U.S. Stock Movers

Qualcomm Incorporated (QCOM) plunged over -8% in pre-market trading after the semiconductor company reported mixed Q3 results and offered weak Q4 guidance.

PayPal Holdings Inc (PYPL) tumbled more than -8% in pre-market trading after the fintech company posted in-line Q2 earnings and its quarterly operating margin fell short of expectations.

Etsy Inc (ETSY) slid over -7% in pre-market trading after the company posted better-than-expected Q2 results but issued weak Q3 revenue guidance.

Upwork Inc (UPWK) climbed more than +18% in pre-market trading after reporting upbeat Q2 results.

Roku Inc (ROKU) fell over -1% in pre-market trading after Citi downgraded the stock to Neutral from Buy. 

Doximity Inc (DOCS) dropped more than -3% in pre-market trading after Piper Sandler downgraded the stock to Neutral from Overweight.

You can see more pre-market stock movershere

Today’s U.S. Earnings Spotlight: Thursday - August 3rd

Apple (AAPL), Amazon.com (AMZN), ConocoPhillips (COP), Amgen (AMGN), Booking (BKNG), Stryker (SYK), Gilead (GILD), Airbnb (ABNB), Cigna (CI), Regeneron Pharma (REGN), Becton Dickinson (BDX), Southern (SO), EOG Resources (EOG), Air Products (APD), Canadian Natural (CNQ), ICE (ICE), Monster Beverage (MNST), Fortinet (FTNT), Parker-Hannifin (PH), Microchip (MCHP), Motorola (MSI), Sempra Energy (SRE), Apollo Global Management A (APO), Block (SQ), Moderna (MRNA), Corteva (CTVA), BCE Inc (BCE), Cheniere Energy (LNG), Cummins (CMI), ResMed (RMD), Consolidated Edison (ED), Constellation Energy (CEG), Warner Bros Discovery (WBD), Extra Space Storage (EXR), Vulcan Materials (VMC), Quanta Services (PWR), Banco Bradesco (BBD), Alnylam (ALNY), Kellogg (K), Cloudflare (NET), Coinbase Global (COIN), Ventas (VTR), Targa Resources (TRGP), Ball (BALL), Iron Mountain (IRM), Expedia (EXPE), Westlake Chemical (WLK), Pembina Pipeline (PBA), ChipMOS Tech (IMOS), Entegris (ENTG), DraftKings (DKNG), Alliant Energy (LNT), Trimble (TRMB), Magellan (MMP), Hyatt (H), Smith&Nephew SNATS (SNN), Ivanhoe Mines (IVPAF), Bio-Rad Labs (BIO), Gen Digital (GEN), Floor & Decor (FND), Camden Property (CPT), Godaddy Inc (GDDY), Teleflex (TFX), Ryan Specialty Group Holdings (RYAN), Regency Centers (REG), Black Knight (BKI), Open Text (OTEX), Bruker (BRKR), HF Sinclair (DINO), ADS (WMS), Lamar (LAMR), CubeSmart (CUBE), Reinsurance of America (RGA), MasTec (MTZ), Pinnacle West (PNW), DaVita (DVA), Huntington Ingalls Industries (HII), Dropbox (DBX), Hasbro (HAS), Cognex (CGNX), Americold Realty (COLD), Dentsply (XRAY), Topbuild Corp (BLD), WestRock Co (WRK), Dolby Labs (DLB), Pharming Group (PHAR), Wayfair Inc (W), Arrow Electronics (ARW), Jones Lang LaSalle (JLL), Middleby Corp (MIDD), Tempur Sealy International (TPX), Karuna Therapeutics (KRTX), 10X Genomics (TXG), Southwestern Energy (SWN), Api Group Corp (APG), Timken (TKR), Energy of Minas Gerais (CIG), Universal Display (OLED), Murphy Oil (MUR), Starwood Property (STWD), BWX Tech (BWXT), PBF Energy (PBF), Planet Fitness Inc (PLNT), Globus Medical (GMED), Intracellular Th (ITCI), Altair Engineering (ALTR), DXC Technology (DXC), Lantheus Holdings Inc (LNTH), Ryman Hospitality Properties (RHP), Beacon Roofing (BECN), Schneider National (SNDR), Gildan Activewear (GIL), Workiva Inc (WK), Post (POST), Shift4 Payments Inc (FOUR), Sotera Health (SHC), Power Integrations (POWI), Hilton Grand Vacations (HGV), Natera Inc (NTRA), Qualys (QLYS), Dun And Bradstreet (DNB), Wix.Com Ltd (WIX), Brookfield Infra (BIPC), Red Rock Resorts (RRR), Insight Enterprises (NSIT), MACOM Tech (MTSI), Vontier (VNT), Advanced Energy (AEIS), Air Lease (AL), MDU Resources (MDU), Fox Factory (FOXF), Cirrus (CRUS), Denbury Resources (DEN), Guardant Health (GH), NewJersey Resources (NJR), AMN Healthcare Services (AMN), Visteon (VC), Livent (LTHM), Cable One Inc (CABO), DigitalOcean Holdings (DOCN), Focus Financial Partners (FOCS), Belden (BDC), Acushnet Holdings (GOLF), MP Materials (MP), Select Medical (SEM), Progyny (PGNY).

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