US EQUITY OPEN: Stocks open lower while yields and oil climb

OPEN: Stocks are lower at the open with weakness in the Dow Jones after weak Walmart (WMT) guidance and comp sales but Russell 2000 underperforms. Sectors are mixed, Consumer Staples underperform on the WMT numbers while Consumer Discretionary also lags alongside Health Care, with the latter giving back some of its rally on Wednesday following the Moderna (MRNA) and Merck (MRK) positive cancer updates. On the flip side, energy stocks lead the gains - tracking crude gains higher, while Real Estate, Utilities and Tech also rise at the open. 

Crude trades higher amid reports Houthis are preparing to enter a new phase of escalation against Saudi Arabia, while the Iranian Supreme Leader advisor Rezaei said the best response to Trump's escalation of economic warfare is to withdraw from the Nuclear Non Proliferation Treaty, which legally binds the country to maintain a peaceful nuclear energy programme. US President Trump also told his team that chances of a deal with Iran are slim, and he has ordered a freeze on talks with Iran for several weeks. 

Treasury yields are higher across the curve, with the 30-year yield now back at pre-buyback announcement levels. Fed's Daly spoke, noting rise in long-term bond yields is a global issue which reduces its usefulness as a signal for the Fed, but moves in the short end show the market understands the Fed's reaction function. She also said policy is in a good place and reiterated she supported a hold in July.  US data saw initial jobless claims below expectations while continued claims were above.  The Philly Fed was strong, with a very optimistic future outlook. 

In FX, the Dollar flat despite the move higher in yields and energy prices, while Yen underperforms amid the yield move while Kiwi, Pound and Looney outperform. Gold prices are lower due to the yield environment.  

• Coty (COTY): Sees weaker-than-expected next-quarter profit outlook and withholds FY guidance amid its business overhaul
• Nordson (NDSN): Top and bottom line surpassed Wall Street expectations alongside raising FY outlook
• Deere & Company (DE): EPS and revenue beat alongside lifting FY net income view
• Walmart (WMT): Comparable sales light with next-quarter and FY profit outlook short
• Microsoft (MSFT): Meta has quietly become one of Microsoft's largest AI customers
• Etsy (ETSY): Rosenblatt Securities initiated coverage with a 'Buy' rating
• Moderna (MRNA) gives up some of the huge gains seen on Wednesday. 

Session combinations of this kind, rising yields, rising crude, weaker equities led by staples and the Dow, have historically pointed to a supply-side risk premium rather than a growth scare, and the usual sequencing is that energy and rates lead while the broad tape follows only if the crude move persists beyond a few sessions. The crude bid here is tied to Gulf escalation headlines, a channel that in past episodes of this type has moved freight and insurance costs and front-month spreads first, with equity sector rotation into energy a standard second-order feature. On rates, the read on long-end yields from Fed speakers, that the move is global and therefore less informative domestically, is a familiar framing when term premium rises faster than policy expectations; the distinction worth drawing is between the front end, which reflects the understood reaction function, and the long end, where buyback and supply dynamics have been the swing factor. The WMT print matters as a read-through on the consumer: guidance misses from that name have in comparable episodes weighed on staples and discount retail peers and fed into the soft-versus-hard-landing debate more than the single stock. The data mix, firm claims and a strong regional survey against higher continued claims, fits the recurring late-cycle pattern of healthy headline prints with deteriorating internals. Follow-ons are whether the Gulf headlines produce concrete supply disruption versus rhetorical escalation, whether other officials echo the dismissal of the long-end signal, and whether the energy-led rotation survives a crude retracement.