Investor sentiment is shifting to Europe as elections across the EU and the potential rise of populist parties give traders another thing to worry about in a region already shaken up by central bank policies, potential U.S. tariffs and Brexit. The results are particularly important in Italy, where the performance of the coalition parties could heavily influence budget talks with the bloc and spook Italian bonds and equities. Gains for their ideological peers across the continent might also hurt the pound and the euro - which is languishing near a two-year low against the dollar - by increasing the chances of a hard Brexit and making it more difficult for proponents of closer European ties.

DJIA futures fall more than 250 points

EU elections, Brexit drama and the usual U.S.-China tensions are rattling U.S. stock index futures, with Dow and the S&P 500 down 1% and Nasdaq off by 1.5%. A flurry of U.S economic reports are also on tap, including the latest weekly jobless claims data, a flash reading of manufacturing and services PMI figures for May, as well as new home sales for April. In corporate news, Medtronic (NYSE:MDT), Best Buy (NYSE:BBY), Hewlett Packard (NYSE:HPQ) and Intuit (NASDAQ:INTU) are all set to report their earnings for the first quarter.

Markets assess Modi re-election

Official data from India's Election Commission is showing Prime Minister Narendra Modi's Bharatiya Janata Party set to win more than 340 seats available in the lower house of parliament, well over the 272 needed for a majority. It's a historic back-to-back victory in India's general election, allowing Modi to push ahead with reforms to combat unemployment and rural distress that have persisted during his five years in power. The broad Nifty index rose 1.4% to historic highs on the news, but gave back gains towards the end of the session, closing down 0.7%.

May prepares resignation

Theresa May's job is hanging by a thread after Andrea Leadsom, a high-profile pro-Brexit Cabinet minister, quit on Wednesday. Pound investors are bailing out of the currency - down another 0.4% overnight to $1.2612 - amid increasing uncertainty about who will be running the country and who will handle further negotiations with the EU. The Times reported that May would name a date for her departure tomorrow, but would remain as prime minister while her successor is elected in a two-stage process.

Contentious shareholder meeting

Deutsche Bank (NYSE:DB) executives are expecting a tense meeting with shareholders today, as the bank’s tumbling share price and growing backlog of scandals place the board firmly in the firing line. A UBS downgrade on Monday sent shares to record lows, heaping pressure on the embattled German lender to trim its investment banking division following the collapse of merger talks with Commerzbank (OTCPK:CRZBY). Negative publicity in recent years also includes settlements with the DOJ, management reshuffles, weak earnings and constant restructuring.

Cyber attack downgrade

Moody’s has slashed its rating outlook on Equifax (NYSE:EFX) from stable to negative, marking the first time cybersecurity issues have been cited as the reason for a downgrade. The company took a $690M first-quarter charge for its massive 2017 breach of consumer data, representing an estimate for settling ongoing class action cases, as well as potential federal and state regulatory fines. The decision is significant because investors increasingly look to ratings firms and insurance companies to adequately predict the longer-term fallout of some of the biggest breaches, a difficult task given the relative lack of historical data. EFX -1.5% premarket.

Amazon emotional wearable coming soon?

Amazon (NASDAQ:AMZN) is developing a voice-activated wearable device that can recognize human emotions, according to Bloomberg. The wrist-worn gadget is described as a health and wellness product in internal documents, although it's unclear how far along the project is, or if it will ever become a commercial device. It's a collaboration between Lab126, the hardware development group behind Amazon’s Fire Phone and Echo smart speaker, and the Alexa voice software team.

Ending political ad sale commissions

Once seen as a growth area, political ads are now viewed within Facebook (NASDAQ:FB) as more of a headache. Senior leaders at the company have debated whether it should cease running political ads entirely, but CEO Mark Zuckerberg made the final call to stay in the business, though changes will be made to how it operates. The tech giant has now stopped paying commissions to employees who sell political ads - making its ad-buying portal largely self-serve - ahead of election campaigns for 2020.

Long grounding for 737 MAX

Aviation regulators from 30 countries are meeting today in Dallas to discuss progress in fixing the software of Boeing's (NYSE:BA) 737 MAX. However, the closed-door meeting, originally described by FAA officials as a way for the agency to secure an international stamp of approval, is now shaping up largely as an information sharing exercise. Ahead of the gathering, acting FAA chief Daniel Elwell said he couldn't predict when the MAX fleet would be back in the air, stressing that the return to flight would be driven by analysis rather than the calendar. "If you said October, I wouldn’t even say that" was a realistic deadline at this point, he declared, because "we haven’t finished determining exactly what the training requirements will be."

Wednesday's Key Earnings
Lowe's (NYSE:LOW) -11.9% on slimming gross margins.
Target (NYSE:TGT) +7.8% as digital sales skyrocketed 42%.

Today's Markets

In Asia, Japan -0.6%. Hong Kong -1.6%. China -1.4%. India -0.8%.
In Europe, at midday, London -1.5%. Paris -1.7%. Frankfurt -1.8%.
Futures at 6:20, Dow -1%. S&P -1.1%. Nasdaq -1.5%. Crude -1.6% to $60.41. Gold +0.2% to $1276.50. Bitcoin -3.3% to $7628.
Ten-year Treasury Yield -5 bps to 2.35%

Today's Economic Calendar

8:30 Initial Jobless Claims
9:45 PMI Composite Flash
10:00 New Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Fed's Bostic Speech
1:00 PM Fed's Barkin Speech
1:00 PM Fed's Maly Speech
1:00 PM Fed's Kaplan Speech