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Pre-Markets Mixed Despite Strong Earnings Results

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Pre-market futures right now are split, but weakening. Understandable, as we have seen record high closes on the S&P 500 so far this year in double digits, mostly in just the past couple weeks. Profit-taking wouldn’t be the craziest idea anyone had from current levels, and considering the morning’s data remains strong, we don’t see anything else pushing market futures down.

Only the tech-heavy (AI-trade-heavy) Nasdaq is in the green at this hour, +42 points, +0.18%. This itself is off early-morning highs near +0.4%. Otherwise, the Dow — led downward by UnitedHealth (UNH - Free Report) , which announced it is under a Department of Justice probe — is -300 points currently, -0.67%, while the S&P 500 is flat as a pancake: -0.004%. The small-cap Russell 2000, which has led market indexes for much of this near-term rally, is -9 points, -0.42%.

Initial Claims Down 6 Straight Weeks

Weekly Jobless Claims continue to defy concerns about a weakening jobs market. Initial Jobless Claims this morning came in at 217K, the lowest in 14 weeks and the 6th straight week of lower near-term claims. In early June, we were at 250K new jobless claims, looking to reach higher. There are no news headlines associated with this development; likely companies are waiting to see how their business environments unfold before deciding what to do with their workforces.

Continuing Claims, reported a week in arrears from new claims, are also captured within a better-than-expected situation: 1.955 million is above the downwardly revised 1.951 million from the previous week, but have stalled out just shy of 2 million longer-term jobless claims, which would change the narrative on whether or not we have a healthy labor market.  This amounts to seven straight weeks above 1.94 million, after we had climbed from 1.83 million in mid-April to 1.91 a month later.

Q2 Earnings Recap: AAL, HON, UNP

American Airlines (AAL - Free Report) posted a solid earnings beat in its Q2 report this morning: 95 cents versus expectations for 79 cents — a +20.25% positive earnings surprise. Revenues also outperformed expectations, albeit less impressively: by +0.73% to +$14.39 billion for the quarter. Yet warnings of softer demand leading to a Q3 loss are sending shares down -6% on the news, compounding the -27% loss year to date at the airline major. 

Honeywell (HON - Free Report) also outpaced expectations on its bottom line, by +4.2% to $2.75 per share, and notably above the $2.49 per share reported in the year-ago quarter. Revenues o $10.35 billion surpassed the Zacks consensus by +3.33%, though shares are trading down -2.7% in the pre-market, as the company prepares to break into three pieces: Aerospace, Automation and Advanced Materials, to be actualized in the second half of 2026. 

Union Pacific (UNP - Free Report) also reported better-than-expected numbers ahead of the opening bell, with earnings of $3.03 per share easily bettering the $2.89 anticipated, for a +4.84% earnings surprise. Revenues of $6.2 billion improved over the $6.11 billion forecast. The railroad major confirmed its efforts to merge with Norfolk Southern (NSC - Free Report) . Shares are -3% ahead of the opening bell.

What to Expect from the Stock Market Today

After today’s open, S&P flash Services and Manufacturing PMI for July will be released, and are expected to move subtly in opposite directions. Services look to grow to 53.2 from 52.9 reported a month ago, while Manufacturing looks to dip to 52.7 from 52.9 in June’s print. Both metrics will most certainly remain above the 50 threshold, which determines growth.

New Home Sales for June are also expected once regular trading gets underway this morning. A total of 645K seasonally adjusted, annualized units are expected to have been sold as new homes last month, up from the 623K reported the prior month. Yesterday’s Existing Home Sales was a bit of a disappointment, however, coming in sub-4 million for the first time since September of last year.

Q2 earnings reports continue after today’s closing bell: Intel (INTC - Free Report) and Deckers Outdoor (DECK - Free Report) will be among those reporting quarterly results.

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