Investors aren't betting the Fed will raise its short-term interest rates today following Friday’s weak GDP report, which showed the U.S. economy growing at a 0.7% annual rate. The decision will be announced at 2:00 p.m. ET. Market-implied probabilities still show an over 50% chance of two rate hikes by the end of the year, so the FOMC statement will be scrutinized for further hints about an increase in June.

Economy

The EU has raised its opening demand for Britain's Brexit bill to an upfront gross payment of up to €100B, according to FT analysis of new stricter demands driven by France and Germany. Over a period of a decade or more, the figure would be reduced in net terms to roughly €55B-€75B as the U.K. received its share of EU spending and repaid loans.

"The euro has protected no one, quite the contrary. The euro has been a deadweight for prices, a deadweight for jobs, a deadweight for the competitiveness of our businesses," said Marine Le Pen, France's far-right presidential candidate. She wants to replace the euro with a looser type of currency, alongside a national one, which would begin circulation within two years.

Failing to reach a restructuring agreement, Puerto Rico has been hit with a fresh round of lawsuits just hours after a stay on litigation expired. Aurelius Capital Management and Monarch Alternative Capital sued the commonwealth in Manhattan, seeking to recoup past-due payments, while Ambac Assurance (NASDAQ:AMBC), which has $10B in guarantees on the line, filed suits challenging the territory's debt-cutting plan.

"Our country needs a good 'shutdown' in September to fix mess!" President Trump tweeted on Tuesday, calling for voters to elect more Republican Senators in 2018 or to undercut the ability to block legislation with filibusters. The suggestion to "change the rules now to 51%" is a variation of the so-called "nuclear option," which was deployed by the GOP during the Gorsuch Supreme Court fight.

Germany's Angela Merkel met with Vladimir Putin yesterday in Sochi, saying only implementing the Minsk accords would lift EU sanctions. Trump spoke with the Russian president later by phone, agreeing they must "do all they can to end the violence" in Syria. Meanwhile, Palestinian leader Mahmoud Abbas is due to arrive at the White House today to discuss the path forward in the Palestinian-Israeli conflict.

Crude prices bounced back overnight as a decline in U.S. inventories underpinned the market, although a dip in compliance with OPEC efforts to reduce output capped gains. "There is precautionary buying following API data and leading to EIA data tonight," said Ric Spooner, chief market analyst at CMC Markets. WTI futures are now up 1% after falling below $48 a barrel.

Stocks

Shares of Apple's European suppliers fell overnight after the company's much-awaited iPhone sales missed expectations in Q2. AAPL sank 1.8% AH on the news. CEO Tim Cook blamed the sluggish number on "rumors around future products," while reporting that Apple's cash hoard rose to a record $256.8B. In Europe: Dialog Semiconductor -3%, AMS -2%, STMicro -2%, Imagination Technologies -1%.

Microsoft's new suite of education products shows its determination to reverse a major shift that has recently taken place in U.S. classrooms, where Google's (GOOG, GOOGL) Chromebook is now the computer of choice. Taking a shot at Apple (NASDAQ:AAPL)? Microsoft (NASDAQ:MSFT) also rolled the Surface Laptop - a $999 device that comes with similar hardware specifications as the latest MacBook, but with newer processors.

The Writers Guild of America has reached a tentative agreement for a new film and TV contract, averting a potentially devastating strike that would have impacted the fall season. The finale even came with a plot twist - an intervention from studio executives, who normally take a less hands-on approach to union talks. Related tickers: CBS, DIS, CMCSA, FOX, FOXA, SNE, TWX, VIA, VIAB

Twitter closed 4% higher on Tuesday after Mark Cuban disclosed he had started buying TWTR shares because the company "finally got its act together on artificial intelligence." Fresh off a deal with Bloomberg to launch a 24-hour live newsfeed, Twitter also announced 16 more video deals, including partnerships with LiveNation, the WNBA, PGA Tour, BuzzFeed and Viacom (VIA, VIAB).

Helped by the airwaves it acquired (to the tune of $8B) in last month's FCC spectrum auction, T-Mobile (NASDAQ:TMUS) expects to deploy a 5G network nationwide by 2020. The pledge comes as AT&T (NYSE:T) and Verizon (NYSE:VZ) pour billions of dollars into wireless airwave licenses that might support the technology.

While it tries to engineer a successful turnaround, Moody's has cut Ericsson's (NASDAQ:ERIC) credit rating to junk as a weakening profit outlook erodes confidence in new CEO Borje Ekholm. Provisions and restructuring charges will lead to "credit metrics that will no longer be commensurate with investment-grade ratings," said analyst Alejandro Nunez. ERIC -2.1% premarket

Marking a first for the growing sector, the SEC has approved a request to trade quadruple-leveraged ETFs. Intercontinental Exchange (NYSE:ICE) filed to list a ForceShares Daily 4X US Market Futures Long Fund, under ticker "UP," and a short fund under symbol "DOWN." It comes as the Senate confirmed Jay Clayton to head the SEC, a change in leadership that could influence future investment products.

As it prepares for the U.K. to lose easy access to the EU's single market, JPMorgan (NYSE:JPM) is planning to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg. "We are going to use the three banks we already have in Europe as the anchors for our operations," said Daniel Pinto, the firm's head of investment banking.

Other bank news... BNP Paribas (OTCQX:BNPQF) posted a 4.4% rise in Q1 profits, thanks to a boost in its fixed income and equities trading units. Aiming to experiment and spot early trends, Barclays (NYSE:BCS) is opening the "biggest fintech center in Europe," located in east London. China's HNA Group increased its stake in Deutsche Bank (NYSE:DB) to almost 10%, making it the top shareholder in Europe's largest investment bank.

Perrigo -1.9% premarket after its offices were searched by investigators conducting a federal probe on price collusion. "The company is taking this investigation seriously and is cooperating with the appropriate authorities," Perrigo (NASDAQ:PRGO) said in a statement. The DOJ price-fixing probe has hung for months over the generic-drug industry.

The planned sale of a stake in Saudi Aramco (Private:ARMCO) will occur through an IPO in 2018, and the holdings sold "will not be very far off 5%," according to Deputy Crown Prince Mohammed bin Salman. The listing, expected to raise tens of billions of dollars, is a centerpiece of the government's ambitious plan - known as Vision 2030 - to diversify the economy beyond oil.

Solar companies are in the spotlight. The SEC is examining whether Sunrun (NASDAQ:RUN) and SolarCity (NASDAQ:TSLA) have adequately disclosed how many customers canceled contracts after signing up for home solar-energy systems, WSJ reports. Investors use that cancellation metric as one way to gauge the companies' health.

Trying to overcome Dieselgate, Volkswagen (OTCPK:VLKAY) is talking to Exxon Mobil (NYSE:XOM) and Gazprom (OTCQX:GZPFY) to back its efforts in promoting cars that run on natural gas. "We are now really trying to think out of the box and find solutions that can be helpful at least in this transition period of 10 to 20 years," CEO Matthias Mueller told Austria's ORF radio.

NuTonomy, the startup that beat UBER to the streets with a robot taxi, is partnering with Peugeot (OTCPK:PEUGF) to test self-driving cars in Singapore. On-road trials will involve the 3008 SUV. The project seeks to work on "level 5" autonomous capable vehicles, which require no driver input, allowing the firms to study how an "on-demand autonomous vehicle mobility service" performs.

Airlines including United (NYSE:UAL), Alaska (NYSE:ALK), American (NASDAQ:AAL) and Southwest (NYSE:LUV) were all in the congressional hot seat yesterday as members of the House Transportation Committee grilled executives about their business practices. "If we don't see meaningful results by the next hearing, I can assure you, you won't like the outcome," said Chairman Bill Shuster. "If we act, it's going to be one-size-fits-all."

Tuesday's Key Earnings

Altria (NYSE:MO) flat on lower cigarette volumes.
Apple (AAPL) -1.8% AH selling fewer iPhones.
Archer Daniels (NYSE:ADM) -8.9% with weak ag services.
BP (NYSE:BP) +1.3% beating expectations.
ConocoPhillips (NYSE:COP) -1.6% following an adjusted Q1 loss.
Cummins (NYSE:CMI) +6.1% posting strong results.
CVS Health (NYSE:CVS) -3.6% as same-store sales slipped.
Enterprise Products (NYSE:EPD) -0.8% growing profits.
Etsy (NASDAQ:ETSY) -15.7% AH replacing its CEO.
FireEye (NASDAQ:FEYE) +14.7% AH on sunny guidance.
Gilead Sciences (NASDAQ:GILD) -2.5% AH missing estimates.
Mastercard (NYSE:MA) +1.5% increasing transactions.
Merck (NYSE:MRK) +0.5% after boosting guidance.
Mondelez (NASDAQ:MDLZ) +2.9% AH as margins improved.
Pfizer (NYSE:PFE) -0.5% revenues off, reaffirming guidance.
Twilio (NYSE:TWLO) -30.3% AH after a disappointing outlook.

Today's Markets

In Asia, Japan closed. Hong Kong closed. China -0.3%. India -0.1%.
In Europe, at midday, London -0.3%. Paris -0.2%. Frankfurt -0.1%.
Futures at 6:20, Dow -0.1%. S&P -0.2%. Nasdaq -0.3%. Crude +1% to $48.12. Gold -0.2% to $1254.50.
Ten-year Treasury Yield flat at 2.29%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Gallup U.S. Job Creation Index
8:30 Treasury Refunding Quarterly Announcement
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement