Stocks Set to Open Higher as Chipmakers Rebound, Corporate Earnings in Focus

September S&P 500 E-Mini futures (ESU26) are up +0.30%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.59% this morning, buoyed by a mild rebound in chip stocks at the start of an earnings-packed week.

Chip stocks advanced in pre-market trading as investors stepped in to buy the dip following a rout that pushed the high-profile group into a bear market. Micron Technology (MU) was up over +4%, Advanced Micro Devices (AMD) was up more than +2%, and Marvell Technology (MRVL) was up about +2%.

Also aiding sentiment, the price of WTI crude erased earlier gains and fell on Monday after Iran said it was still pursuing a diplomatic solution and that it had received proposals from mediators. Oil prices initially jumped after the U.S. and Iran intensified hostilities, including attacks on vessels attempting to transit the Strait of Hormuz and a strike on an oil facility in Kuwait over the weekend.

Treasuries fell across the curve on Monday, with the benchmark 10-year yield rising two basis points to 4.57%. The risk of inflationary pressures stemming from the conflict nonetheless came into focus as U.S. gasoline prices climbed back above the $4-a-gallon mark.

In Friday’s trading session, Wall Street’s major equity averages closed lower. Most members of the Magnificent Seven slid, with Meta Platforms (META) and Alphabet (GOOGL) falling over -2%. Also, chip stocks sank after Chinese startup Moonshot unveiled its Kimi K3 AI model, with Applied Materials (AMAT) sliding over -5% and KLA Corp. (KLAC) dropping more than -3%. In addition, Intuitive Surgical (ISRG) tumbled over -14% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the company left its full-year da Vinci procedure growth guidance unchanged, disappointing investors. On the bullish side, Travelers Cos. (TRV) climbed more than +9% and was the top percentage gainer on the S&P 500 and Dow after the property and casualty insurer posted better-than-expected Q2 net premiums written.

“As we enter earnings season, a market defined by modest selloffs and rapid recoveries suggests bulls remain in control, but they’re waiting for an all-clear signal from earnings before pushing stocks to new highs,” said Mark Hackett at Nationwide.

Economic data released on Friday were mixed for equities. The University of Michigan’s preliminary U.S. consumer sentiment index rose to a 5-month high of 54.4 in July, stronger than expectations of 51.0. Also, U.S. industrial production rose +0.1% m/m in June, weaker than expectations of +0.2% m/m, while manufacturing production was unchanged m/m, weaker than expectations of +0.1% m/m. In addition, the U.S. import price index unexpectedly rose +0.3% m/m in June, stronger than expectations of -0.7% m/m. Finally, U.S. June housing starts jumped +19.0% m/m to 1.427 million, stronger than expectations of 1.310 million, while building permits, a proxy for future construction, fell -3.0% m/m to 1.367 million, weaker than expectations of 1.400 million.

Cleveland Fed President Beth Hammack said on Friday that persistently high inflation remains her bigger concern as consumer spending stays resilient and unemployment remains low. “There is no conflict in our mandate. Inflation is too high. The labor market is right around my level of maximum employment,” Hammack said.

Meanwhile, U.S. rate futures have priced in an 85.6% chance of no rate change and a 14.4% chance of a 25 basis point rate hike at the July FOMC meeting.

Second-quarter corporate earnings season heats up this week, with Big Tech in the spotlight. Investors will closely watch earnings reports from Magnificent Seven stalwarts Alphabet (GOOGL) and Tesla (TSLA). Besides the Mag Seven heavyweights, major companies such as Intel (INTC), Texas Instruments (TXN), International Business Machines (IBM), GE Vernova (GEV), ServiceNow (NOW), Philip Morris International (PM), AT&T Inc. (T), T-Mobile US (TMUS), RTX Corporation (RTX), Lockheed Martin (LMT), Charles Schwab (SCHW), 3M Company (MMM), and American Express Company (AXP) are set to report quarterly results this week. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +24% jump in quarterly earnings for Q2 compared to the previous year.

The busy earnings calendar is balanced out by a relatively light economic data slate. Preliminary U.S. July purchasing managers’ surveys for manufacturing and services will be the main highlight this week, offering a snapshot of how the economy has performed this month just as oil prices have surged again amid escalating tensions in the Middle East. Other noteworthy data releases include U.S. Initial Jobless Claims and New Home Sales.

U.S. central bankers are in a media blackout period before the July 28-29 policy meeting. During that period, policymakers do not speak publicly about the economic outlook or monetary policy.

Elsewhere, Advanced Micro Devices (AMD) will host a conference in San Francisco this week, where it is expected to unveil its latest AI chips. Some analysts believe new partnerships or customer wins could also be announced.

Today, investors will focus on the Conference Board’s Leading Economic Index for the U.S., which is set to be released in a couple of hours. Economists project the June figure to drop -0.1% m/m, following a +0.1% m/m gain in May.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.57%, up +0.46%.

The Euro Stoxx 50 Index is up +0.33% this morning, kicking off a busy week on a positive note. Energy stocks led the gains on Monday. Also, technology stocks edged higher. At the same time, travel stocks fell, weighed down by a more than -7% plunge in Ryanair (RYA.I.DX) after the budget airline posted a 34% decline in FQ1 profit. Investor focus this week is on the monetary policy decision from the European Central Bank. The ECB is widely expected to keep the deposit rate unchanged at 2.25% after raising it by 25 basis points at the June meeting. The central bank may signal that further increases in borrowing costs are possible after escalating tensions in the Middle East drove energy prices higher. Many economists expect ECB officials to deliver further tightening when they meet in September. Beyond monetary policy, attention will center on the preliminary Eurozone PMI for July, Germany’s ZEW economic sentiment index for July, and the ECB’s bank lending survey. Elsewhere, Andy Burnham is set to become the U.K.’s seventh prime minister in just over a decade, with many unanswered questions surrounding the composition of his cabinet and the policy direction he will take. In other corporate news, Thule (THULE.S.DX) slid over -2% after the sports and outdoor products maker reported slightly weaker-than-expected Q2 sales and warned of price increases.

Germany’s PPI data was released today.

The German June PPI fell -0.3% m/m, weaker than expectations of -0.2% m/m.

China’s Shanghai Composite Index (SHCOMP) closed up +0.85%, while Japan’s financial markets were closed for a national holiday.

China’s Shanghai Composite Index closed higher today as support measures, including equity purchases by two major state funds, boosted sentiment. Consumer, property, and utility stocks outperformed on Monday. China Reform Holdings and China Chengtong Holdings, two investment firms linked to a group of entities known as the national team, said on Sunday that they have increased their holdings of Chinese stocks. The state-owned capital operators recently spent about 60 billion yuan ($8.86 billion) buying equities and pledged further purchases to help stabilize markets. In another indication that Beijing was seeking to restore investor confidence, exchange-traded funds known to be favored by the national team of state funds saw strong inflows last week. Notably, turnover in a basket of ETFs favored by the national team surged in the final minutes of Monday’s session to 65 billion yuan ($9.6 billion), up from an average of about 30 billion yuan over the past two months. In addition, the head of the China Securities Regulatory Commission chaired a meeting with investor representatives in Beijing on Monday to hear their suggestions for the stable and healthy development of China’s capital markets. The CSRC will prevent risks in the capital market, strengthen supervision, and make “all efforts” to maintain stable market operations, Commission Chairman Wu Qing said at the meeting. The show of support and pledges followed a stock market rout that erased 10 trillion yuan ($1.48 trillion) from China’s market capitalization over the past two weeks. However, the Shanghai Composite Index’s gains were limited as semiconductor and other AI-related stocks extended their declines. Elsewhere, China left its benchmark lending rates unchanged for a 14th straight month on Monday, even as the world’s second-largest economy reported weaker-than-expected second-quarter growth. The one-year loan prime rate was held at 3.00%, while the five-year LPR remained unchanged at 3.50%, according to the People’s Bank of China. In corporate news, Alibaba Group rose more than +3% in Hong Kong after unveiling a preview of its flagship Qwen3.8 Max model, which the company said ranks second only to Anthropic’s Fable 5.

Japan’s Nikkei 225 Stock Index was closed today for the Marine Day holiday. The markets will reopen on Tuesday.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks staged a mild rebound in pre-market trading, with Micron Technology (MU) rising over +4% and Advanced Micro Devices (AMD) gaining more than +2%.

Nebius Group N.V. (NBIS) gained more than +4% in pre-market trading after Freedom Capital upgraded the stock to Buy from Hold with a price target of $200.

Lumentum Holdings (LITE) climbed over +3% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight with an unchanged price target of $1,000.

Boeing (BA) rose over +1% in pre-market trading after Riyadh Air announced it would purchase more aircraft from the company. Separately, SMBC Aviation Capital said it had ordered 100 Boeing jets.

Monster Beverage (MNST) fell about -1% in pre-market trading after Deutsche Bank downgraded the stock to Hold from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - July 20th

Steel Dynamics (STLD), W. R. Berkley (WRB), Crown Holdings (CCK), AGNC Investment (AGNC), Wintrust Financial (WTFC), Domino’s Pizza (DPZ), Zions Bancorporation, National Association (ZION), BOK Financial (BOKF), ServisFirst Bancshares (SFBS), Dynex Capital (DX), Calix (CALX), Monarch Casino & Resort (MCRI), AMC Entertainment Holdings (AMC), CNB Financial (CCNE), Southern Missouri Bancorp (SMBC), SmartFinancial (SMBK), Washington Trust Bancorp (WASH), Park Aerospace (PKE), Sierra Bancorp (BSRR), Home Bancorp (HBCP), RBB Bancorp (RBB), CoastalSouth Bancshares (COSO), Peoples Bancorp of North Carolina (PEBK), Magyar Bancorp (MGYR).