U.S. equity futures are mixed ahead of June CPI, Federal Reserve testimony and the first major bank earnings reports. At 5:13 a.m. ET, S&P 500 futures were essentially flat, Nasdaq 100 futures were up 0.48% and Dow futures were down 0.22%. The Russell 2000 remains the weakest major index tactically after falling 0.8% Monday and declining 2.35% month to date. Technology is attempting to rebound from Monday’s semiconductor selloff, while higher oil prices continue to pressure the Dow, smaller companies and consumer-sensitive exposures.
U.S. equities declined Monday as an oil-price shock and renewed selling in AI-related stocks weighed on risk appetite. The S&P 500 fell 0.8%, the Dow declined 0.3%, the Nasdaq dropped 1.6% and the Russell 2000 lost 0.8%. Month-to-date performance now stands at Dow +0.34%, S&P 500 +0.21%, Nasdaq -1.30% and Russell 2000 -2.35%.
Breadth confirmed that selling extended beyond a few mega-cap stocks. Decliners led advancers by 1.25:1 on the NYSE and 2.05:1 on the Nasdaq. Exchange volume totaled 11.57B shares on the NYSE and 16.03B shares on the Nasdaq, excluding regional activity.
The cross-asset backdrop became materially less supportive. The 2-year Treasury yield rose 6 basis points to 4.27%, the 10-year increased 5 basis points to 4.61% and the 30-year rose 4 basis points to 5.10%. The DXY climbed to 101.28, while the euro and sterling weakened and the dollar strengthened to ¥162.43.
August WTI crude jumped 8.89% to $77.76 Monday and traded above $80 early Tuesday after another round of U.S. strikes on Iran and threats of a 20% charge on cargo moving through the Strait of Hormuz. Brent reached its highest level in roughly a month. August gold fell 2.47% Monday to $4,012.20, although spot gold recovered about 0.5% early Tuesday as geopolitical concerns persisted.
The main macro event is the June CPI report at 8:30 a.m. ET. Reuters consensus expects headline inflation to slow to 3.8% year over year from 4.2%, while core CPI is expected to rise 0.2% month over month and 2.8% year over year. Any relief may be treated cautiously because gasoline and crude prices have risen sharply since the June measurement period.
Federal Reserve Chair Kevin Warsh delivers the central bank’s semiannual monetary-policy report to Congress at 10:00 a.m. ET. Markets are pricing a 43% probability of a 25-basis-point rate increase at the July 29 meeting, up from 34% before Governor Christopher Waller warned that rates may need to rise in the near term if inflation remains elevated.
Sector Highlights
Sector performance reflected a sharp oil-and-defensives rotation. Energy surged 3.16%, while Utilities gained 0.67%, Financials 0.61%, Consumer Staples 0.59%, Real Estate 0.50% and Health Care 0.25%. Consumer Discretionary fell 0.73% but still outperformed the worst growth and cyclical groups. Technology declined 2.07%, Communication Services 0.97%, Industrials 0.89% and Materials 0.79%.
Information Technology
- SK Hynix (SKHY +7% premarket) rebounded after falling 9.3% Monday. Its U.S.-listed shares were trading at a substantial premium to the company’s South Korean stock.
- Micron Technology (MU +3% premarket) and Sandisk (SNDK +6%) also recovered after Monday’s memory-stock rout. Sandisk had fallen 12.6%, while Micron lost 4.3% in the prior session.
- The iShares Semiconductor ETF (SOXX +2.4% premarket) indicated a broader chip rebound after Technology fell 2.07% Monday.
- Intuit (INTU +5.4%) outperformed Monday, while Salesforce and Workday also advanced as software held up better than semiconductor and AI-hardware stocks.
- Apple (AAPL +0.6%) gained after Citi raised its price target, making it a rare large-cap Technology winner during Monday’s selloff.
Communication Services
- AppLovin (APP -12.7%) was one of Monday’s largest decliners as investors raised concerns about slowing e-commerce advertising growth.
- Meta Platforms (META -1.9%) declined despite announcing a roughly $50B data-center expansion, reinforcing investor concerns about the scale and near-term profitability of AI capital spending.
Financials
- JPMorgan Chase (JPM), Goldman Sachs (GS), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) report second-quarter results before the opening bell. The reports will provide early reads on trading revenue, deal activity, net interest income, loan growth and credit quality.
Energy
- Exxon Mobil (XOM), Chevron (CVX) and ConocoPhillips (COP) remain the most direct large-cap beneficiaries of the crude-price surge. Their relative strength will depend on whether WTI can hold above $80 without triggering broader recession or policy concerns. This is an inference based on the latest oil move.
Industrials
- SpaceX (SPCX -4.2%) fell to a new low Monday and is now below its IPO price as investors question future profitability and prepare for an upcoming share-lockup expiration.
- Airlines including Delta (DAL), United Airlines (UAL) and American Airlines (AAL) remain exposed to renewed fuel-cost pressure as crude extends above $80.
Consumer Discretionary
- Stellantis (STLA +1.3%) advanced after reporting stronger vehicle shipments, providing a rare positive read-through within an otherwise weak Consumer Discretionary sector.
Data sourced from FactSet Research Systems Inc.
Disclaimer: This article is for information purposes only and does not constitute investment advice.
