5 Things to Know Before the Stock Market Opens

Big banks are reporting results to kick off second-quarter earnings season; Russell 2000 futures are pointing higher after the small-cap index soared Thursday amid a rotation out of large-cap tech stocks; Tesla (TSLA) shares are extending their declines in premarket trading after a report the electric vehicle (EV) maker plans to postpone unveiling its robotaxi; the European Union (EU) says X, the Elon Musk-owned social media network, has breached online content rules; and Novo Nordisk (NVO) is rising on an Oxford study that showed the Danish drugmaker’s Ozempic diabetes drug was linked to lower rates of dementia and a range of mental problems. U.S. stock futures are little changed after cooling inflation data Thursday boosted Fed rate-cut hopes and drove the rotation into small caps while the Nasdaq and S&P 500 plunged. Here’s what investors need to know today.

1. JPMorgan Posts Results Above Expectations; Wells Fargo Net Interest Income Sinks 

Second-quarter earnings season has arrived for the big U.S. banks, with JPMorgan Chase (JPM) and Wells Fargo (WFC) first out of the gate. JPMorgan posted revenue on a managed basis of $50.99 billion, while earnings per share (EPS) of $6.12 also came in above analysts’ expectations. Still, its shares are down 1% in premarket trading, while those of Wells Fargo are plummeting almost 6% as it reported 9.4% lower net interest income at $11.9 billion. JPMorgan Chief Executive Officer (CEO) Jamie Dimon, whose comments are always closely monitored by investors, warned that inflation and interest rates “may stay higher than the market expects” despite progress made in cooling inflation, since “there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world.”

2. Russell 2000 Rises as Rotation From Large-Cap Tech Stocks Persists

Russell 2000 futures are pointing higher after the underlying index jumped 3.6% on Thursday to significantly outperform the S&P 500 and Nasdaq Composite. Gains in the index of small-cap companies came as investors rotated from mega-cap tech stocks into firms perceived to get a bigger boost from Federal Reserve rate cuts, which now look more likely after June’s inflation report showed an unexpected fall in consumer prices last month. Nasdaq and S&P 500 futures are both little changed.

3. Tesla Falls Further as Reported Robotaxi Delay Weighs on EV Maker 

Tesla (TSLA) shares are slipping more than 1% in premarket trading after suffering the steepest losses of any S&P 500 constituent Thursday with an 8.4% plunge on a report the EV maker is postponing its robotaxi unveiling by two months. The company previously indicated it would hold an event to introduce the autonomous vehicles on Aug. 8, but Bloomberg reported the presentation has been pushed back to October. Tesla shares entered Thursday on an 11-session winning streak to move into the green for the year, fueled by its better-than-expected second quarter deliveries report, but returned into negative territory for 2024 on yesterday’s plunge.

4. EU Says Elon Musk’s X Breaches Online Content Rules

The European Union (EU) has leveled a formal warning against X, charging the Elon Musk-owned social media network formerly known as Twitter with breaching online content rules. The European Commission, the EU’s enforcement arm, charged X with violating the Digital Services Act (DSA) by featuring blue checkmarks that users can buy and can deceive others into thinking the content was trustworthy. “Since anyone can subscribe to obtain such a ‘verified’ status, it negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and the content they interact with,” the Commission said. 

5. Novo Nordisk Gains as Ozempic Found to Lower Dementia Rates 

American depositary receipts (ADRs) of Novo Nordisk (NVO) are rising more than 1% in premarket trading after the release of an Oxford study that showed the Danish drugmaker’s Ozempic diabetes drug was linked to lower rates of dementia and a range of mental problems. The researchers said in The Lancet’s eClinicalMedicine journal that patients had a 48% lower risk of dementia after a year on Ozempic versus those who had taken an older drug, sitagliptin. The study is the latest to show that semaglutide, the active ingredient in both Novo’s Ozempic and its obesity medicine Wegovy, can treat more than diabetes or weight loss, noted Bloomberg.

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