U.S. equities enter the week cautiously as investors brace for new Iran sanctions, Nvidia earnings and Fed Chair Kevin Warsh’s Jackson Hole speech. At 5:30 a.m. ET, S&P 500 futures were down 0.17%, Nasdaq 100 futures were down 0.60% and Dow futures were down 0.02%. The Russell 2000 enters Monday after gaining 0.9% Friday, but remains vulnerable to long-term yields near multi-decade highs. Technology is the main source of premarket pressure as investors reassess AI infrastructure costs ahead of Nvidia’s Wednesday report.
U.S. equities rebounded Friday, with the Dow up 0.98%, the S&P 500 up 0.43%, the Nasdaq up 0.44% and the Russell 2000 up 0.9%. The recovery trimmed losses from a volatile week, but the S&P 500 still fell 1.43%, the Nasdaq 2.05%, the Dow 0.85% and the Russell 2000 1.65% for the week. Total U.S. exchange volume was relatively light at 14.91 billion shares, below the recent 20-session average of 16.62 billion.
The rates backdrop remains the central valuation constraint. Friday’s 2-year Treasury yield rose 5 basis points to 4.23%, the 10-year gained 4 basis points to 4.73% and the 30-year rose 3 basis points to 5.27%. Long yields are easing somewhat this morning, with the 30-year around 5.25%, but remain close to the recent 19-year high of 5.34%. Treasury Secretary Scott Bessent’s expanded bond-buyback program has reduced some volatility but has yet to produce a sustained decline in long-term yields.
The DXY ended Friday at 98.83, while the euro traded around $1.1680, sterling near $1.3647 and the dollar near ¥159.00. The dollar index is up modestly near 98.98 this morning, while the euro is around $1.1666 and the dollar near ¥159.2. The currency remains close to multi-month lows as fiscal concerns and Treasury-market intervention weigh on demand for U.S. assets.
October WTI crude slipped 0.20% Friday to $86.66, while December gold surged 2.25% to $4,674.40. Oil is lower this morning, with WTI near $85.0, as traders take profits ahead of Treasury Secretary Bessent’s planned announcement of tougher sanctions on Iran. The underlying supply risk remains elevated because shipments through the Strait of Hormuz remain constrained. Gold is extending its rally, with spot bullion around $4,649, supported by the weak dollar and concerns about government debt despite elevated real yields.
Friday’s flash PMIs showed that U.S. activity remains considerably stronger than recent payroll and retail data suggested. The S&P Global Services PMI rose to 56.8, its highest since December 2024, lifting the Composite PMI to 56.0, the strongest reading since April 2022. Manufacturing growth slowed to 53.2, with supply-chain disruptions and reduced inventory building weighing on factories. The results point to third-quarter growth near a 3% annualized pace but also keep pressure on the Fed to remain vigilant on inflation.
Monday’s calendar is relatively light. The July Chicago Fed National Activity Index is due at 8:30 a.m. ET, followed by the New York Fed’s Labor Market Survey at 11:00 a.m. The larger catalysts arrive later this week: July PCE inflation, durable-goods orders and revised second-quarter GDP are due Wednesday, Nvidia reports Wednesday night, and Fed Chair Kevin Warsh speaks at Jackson Hole Friday. Markets currently imply roughly a 40% probability of a September rate increase and fully price another 25-basis-point move by year-end.
Sector Highlights
Sector performance was broadly constructive Friday. Materials led with a 2.20% gain, followed by Health Care +1.32%, Financials +1.01%, Consumer Discretionary +0.91%, Communication Services +0.86% and Consumer Staples +0.58%. Industrials gained 0.29%, while Technology and Real Estate were roughly flat. Utilities fell 2.31% and Energy slipped 0.23%. Breadth confirmed the broader participation, with advancers leading 1.55:1 on the NYSE and 1.77:1 on the Nasdaq.
Information Technology
- Nvidia (NVDA +0.1% premarket) is the week’s central equity catalyst ahead of Wednesday’s earnings. Analysts expect quarterly revenue near $92 billion, while reports that AI-server prices could rise more than 15% because of higher memory costs are adding another variable to the AI-spending debate.
- Sandisk (SNDK -4.5% premarket) and Seagate Technology (STX -3.3%) are leading renewed weakness in storage and semiconductor-adjacent shares as investors trim AI infrastructure exposure.
- Apple (AAPL +0.5% premarket) is outperforming the broader Technology tape, while Alphabet and Amazon are modestly lower.
Consumer Discretionary
- Alibaba (BABA -3.4% premarket) fell after launching a $10.2 billion discounted share sale to fund AI investment. The offering equals roughly 3.6% of enlarged share capital and highlights investor concern about the amount of outside capital required to finance the global AI buildout.
- Ross Stores (ROST +4.4% Friday) rallied after raising its annual profit forecast and reporting better-than-expected quarterly results, providing a positive read-through for value-oriented retail.
Financials
- Robinhood (HOOD +13.7% Friday) and Coinbase (COIN +8.2%) rallied as bitcoin surged 6.4% to its highest level since mid-May. Crypto-linked equities remain sensitive to congressional progress on digital-asset legislation and shifts in the dollar and Treasury market.
Communication Services
- Alphabet (GOOGL -0.4% premarket) is modestly weaker as investors continue to scrutinize free-cash-flow pressure from large AI infrastructure budgets. The broader theme will be tested again by Nvidia’s results and Salesforce earnings later this week.
