US Futures Mixed, VIX Up; Euro Rises on Rate Expectations, China Output Slows

Lead US equity futures are mixed this morning, with Nasdaq futures down 0.15% while Dow futures are up 0.01%. The VIX is up 0.25%. The Euro strengthens near $1.1613 on shifting rate expectations, while China's industrial output growth slows to 4.5% YoY. Geopolitical tensions remain a key focus, with the UAE cutting economic ties with Tehran and NATO addressing alleged Iran plans. In corporate news, Target and Estée Lauder reported strong earnings, while Lowe's delivered mixed results. Session narrative European markets are displaying a mixed performance as the session progresses. Macroeconomic data from the Eurozone saw the final CPI confirm 2.9% year-over-year, with core CPI at 2.5%, both aligning with forecasts. In bond markets, Germany successfully sold 10-year bonds at an average yield of 3.26%, an increase from the prior 3.13%, while Hungary issued 3-year bonds at a 5.32% average yield. Geopolitical developments are drawing attention, with the United Arab Emirates announcing a cut of all economic ties with Tehran following accusations of missile attacks. A NATO official also commented on alleged Iranian plans to attack US targets in Europe, stating the alliance is prepared to defend its allies. Corporate earnings continue to drive individual stock movements. Target reported robust Q2 results, with EPS of $4.11 significantly exceeding the $2.26 expectation, and raised its full-year outlook. Despite the strong figures, Target shares are down 3% in premarket trading. Estée Lauder also surpassed Q4 estimates and provided an optimistic FY27 margin outlook, leading to a 5.6% rise in its shares premarket. Conversely, Lowe's delivered mixed results and narrowed its FY26 guidance, resulting in a 3.2% drop in its premarket shares. SK Hynix announced a substantial $29 billion share buyback, which has sent its US-listed ADRs higher. Meanwhile, OpenAI's second-quarter sales growth was reported as tepid, accompanied by deepening losses. Samsung has increased prices for some advanced contract chipmaking services by up to 15% due to strong demand. Cross-asset check The S&P 500 futures are down 0.0032% and Nasdaq futures are down 0.1538%, while Dow futures are up 0.0169%. The VIX is up 0.2525%. In the FX market, the US Dollar Index is down 0.291%, with EUR/USD up 0.311% to 1.1613. USD/JPY is down 0.3183%. The US 10-year yield is down 0.381%. Commodities are generally higher, with WTI crude up 1.3086% and Brent crude up 1.1866%. Gold is up 0.0724%. Themes & continuing stories Geopolitical tensions in the Middle East remain a significant concern, with the UAE's decision to cut economic ties with Tehran and NATO's statement on alleged Iranian plans. This situation is contributing to higher oil prices and concerns about global fuel supplies, as evidenced by the surge in diesel refining margins. The mixed corporate earnings season continues, with some companies like Target and Estée Lauder outperforming, while others like Lowe's face challenges. The tech sector is also under scrutiny, with OpenAI's tepid sales growth and Samsung's price hikes for chipmaking services highlighting ongoing dynamics in the industry. What’s ahead Traders will continue to monitor geopolitical developments in the Middle East and their potential impact on energy markets. Further corporate earnings reports are anticipated, which could provide additional insights into the health of various sectors. The market will also be looking for any new economic data releases that could influence central bank policy expectations.