U.S. equity futures are modestly higher as strong AI-related earnings support the Nasdaq. At 5:16 a.m. ET, S&P 500 futures were up 0.07%, Dow futures were up 0.06% and Nasdaq 100 futures were up 0.45%. The Russell 2000 enters after gaining 1.7% Monday, with lower Treasury yields and improved breadth supporting smaller companies. Palantir and ON Semiconductor are leading the premarket AI rebound, while renewed uncertainty around U.S.-Iran negotiations is lifting crude prices.
U.S. equities rallied Monday as falling oil prices eased inflation concerns. The S&P 500 gained 1.5%, the Dow rose 1.3% to a record close, the Nasdaq advanced 2.1% and the Russell 2000 climbed 1.7%. The S&P 500 finished only 0.1% below its record high.
The supplied sector tape showed concentrated growth leadership. Communication Services gained 4.30%, followed by Consumer Discretionary +2.68%, Industrials +1.86% and Technology +1.62%. Materials and Financials also advanced, while Energy fell 1.23% as crude retreated. Consumer Staples and Health Care posted smaller declines.
Breadth was strong, with advancers leading decliners by 2.26:1 on the NYSE and 2.69:1 on the Nasdaq. Consolidated U.S. volume reached 19.36 billion shares, above the previous 20-session average of 17.66 billion, adding credibility to the broad rebound.
Treasury yields declined Monday, with the 2-year yield down 2 basis points to 4.25%, the 10-year down 3 basis points to 4.68% and the 30-year down 2 basis points to 5.23%. Yields are edging higher this morning, with the 10-year near 4.71%, as oil rebounds and markets retain a roughly 63% probability of a September Fed rate increase.
The DXY finished at 99.93, while the euro weakened to $1.1512, sterling fell to $1.3433 and the dollar declined to ¥156.97 following last week’s coordinated U.S.-Japan intervention. The dollar is firmer against the yen this morning as markets reassess how durable the intervention’s impact will be.
September WTI crude fell 5.35% Monday to $80.14, while December gold was nearly unchanged at $4,107.40. WTI has recovered toward $80.64 this morning after Iran disputed reports that negotiations were underway and another shipping incident near Oman renewed supply concerns. Brent rose toward $84.81.
July manufacturing data were stronger than expected. The ISM Manufacturing Index rose to 55.6 from 53.3, its highest level in four years, while the employment component returned to expansion. Construction spending fell 0.1% in June, however, versus expectations for an increase.
Tuesday’s calendar includes the June trade balance at 8:30 a.m. ET, followed by JOLTS job openings and factory orders at 10:00 a.m. Consensus expects job openings to ease toward 7.4 million from roughly 7.6 million. The reports will provide another read on labor demand and business investment ahead of Friday’s employment report.
Sector Highlights
Communication Services gained 4.30%, followed by Consumer Discretionary +2.68%, Industrials +1.86% and Technology +1.62%. Materials and Financials also advanced, while Energy fell 1.23% as crude retreated. Consumer Staples and Health Care posted smaller declines.
Information Technology
- Palantir Technologies (PLTR +17.2% premarket) raised its annual revenue forecast to approximately $8.15 billion after second-quarter revenue reached $1.94 billion. U.S. government revenue rose 90%, while domestic commercial revenue increased 149%.
- ON Semiconductor (ON +7.5% premarket) issued third-quarter revenue guidance above expectations, citing expanding demand for power-management chips used in AI data centers.
- Marvell Technology (MRVL +4.4%), Micron Technology (MU +2.3%) and Nvidia (NVDA +0.7%) also advanced premarket as AI infrastructure sentiment improved.
- Advanced Micro Devices (AMD) and Arista Networks (ANET) report after the close, providing additional tests of data-center and AI-networking demand.
Communication Services
- Snap (SNAP +8.1% premarket) exceeded second-quarter revenue expectations as World Cup advertising and stronger spending by large North American advertisers supported results.
- Spotify (SPOT) reported 300 million premium subscribers and record gross margins, but its third-quarter profit outlook came in below expectations as growth slowed in North America and Europe.
Industrials
- SpaceX (SPCX +1.0% premarket) reports its first quarterly results since becoming public after the close. Starlink growth, launch activity, capital spending and profitability will be the main focus.
- Caterpillar (CAT) reports before the open, offering an important read on construction, mining, energy and global capital-spending demand.
Consumer Discretionary
- McDonald’s (MCD) reports before the open, with traffic, value-menu performance and U.S. operating trends in focus. The report arrives as the company manages potential disruption from a record cyclosporiasis outbreak linked to lettuce.
- Amazon (AMZN +4.6% Monday) surpassed $3 trillion in market value after strong AWS results continued to support the AI and cloud-investment thesis.
Health Care
- Merck (MRK) and Pfizer (PFE) report before the opening bell. Investors will focus on pharmaceutical pipelines, patent exposure and whether newer products can offset slower growth from mature franchises.
