5 things to know before the stock market opens

Major banks report results to kick off second-quarter earnings season; Russell 2000 futures point higher after the small-cap index climbed Thursday amid a rotation out of large-cap tech stocks; Tesla (TSLA) shares extend their decline in premarket trading after a report that the electric vehicle (EV) maker plans to delay the launch of its robotaxi; the European Union (EU) says Elon Musk-owned social media network X violated online content rules; and Novo Nordisk (NVO) is up on an Oxford study that showed the Danish drugmaker's diabetes drug Ozempic is linked to lower rates of dementia and a range of mental health problems. U.S. stock futures were little changed after cooling inflation data Thursday bolstered Fed rate cut hopes and led to a rotation into small caps as the Nasdaq and S&P 500 plunged. Here's what investors need to know today.

1. JPMorgan reports better-than-expected results; Wells Fargo net interest income falls

Second-quarter earnings season is here for major U.S. banks, led by JPMorgan Chase (JPM) and Wells Fargo (WFC). JPMorgan posted revenue of $50.99 billion on a managed basis, while earnings per share (EPS) of $6.12 also beat analysts' expectations. Still, its shares are down 1% in premarket trading, while Wells Fargo shares are down nearly 6% after the bank reported a 9.4% drop in net interest income to $11.9 billion. JPMorgan CEO Jamie Dimon, whose comments are always closely watched by investors, has warned that inflation and interest rates could remain higher than the market expects despite progress in calming inflation, because multiple inflationary forces are still ahead: large budget deficits, infrastructure needs, trade restructuring and a remilitarization of the world.

2. Russell 2000 Index Advances as Rotation Out of Large-Cap Tech Stocks Continues

Russell 2000 futures are trending higher after the underlying index jumped 3.6% on Thursday, handily outperforming the S&P 500 and Nasdaq Composite. The gains in the small-cap index came as investors shifted away from mega-cap technology stocks toward companies seen as getting a bigger boost from the Federal Reserve’s rate cuts, which now seem more likely after the June inflation report showed an unexpected drop in consumer prices last month. Nasdaq and S&P 500 futures were both little changed.

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

Tesla (TSLA) shares are falling more than 1% in premarket trading after suffering the biggest losses of any S&P 500 component on Thursday, dropping 8.4% following a report that the electric vehicle maker is delaying the unveiling of its robotaxi by two months. The company had previously said it would hold an event to showcase the autonomous vehicles on August 8, but Bloomberg Tesla announced that the presentation has been pushed back to October. Tesla shares entered an 11-session winning streak on Thursday to move into the green for the year, fueled by its better-than-expected second-quarter deliveries report, but returned to negative territory for 2024 after yesterday's plunge.

4. EU says Elon Musk's X violates online content rules

The European Union (EU) has issued a formal warning against X, accusing the Elon Musk-owned social media network, formerly known as Twitter, of violating rules on online content. The European Commission, the EU’s law enforcement agency, has accused X of violating the Digital Services Act (DSA) by introducing blue checkmarks that users can purchase and that can mislead others into believing that content is trustworthy. Since anyone can sign up for such a “verified” status, this negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and content they interact with, the Commission said.

5. Novo Nordisk advances on discovery that Ozempic reduces dementia rates

Novo Nordisk's (NVO) American depositary receipts (ADRs) are up more than 1% in premarket trading after the release of an Oxford study that showed the Danish drugmaker's diabetes drug Ozempic was linked to lower rates of dementia and a range of mental health problems. The researchers said in The Lancetm Electronic clinical medicine One study found that patients had a 48% lower risk of dementia after one year of treatment with Ozempic compared with those who took an older drug, sitagliptin. The study is the latest to show that semaglutide, the active ingredient in Novos Ozempic and its obesity drug Wegovy, can treat more than just diabetes or weight loss, he noted. Bloomberg.