Stock Index Futures Climb as Chipmakers Extend Rebound, Earnings in Focus

September S&P 500 E-Mini futures (ESU26) are up +0.57%, and September Nasdaq 100 E-Mini futures (NQU26) are up +1.39% this morning, pointing to a higher open on Wall Street as a rebound in chipmakers gained momentum.

Chip and AI infrastructure stocks climbed in pre-market trading as investors snapped up names tied to the AI buildout at lower valuations after they suffered their worst week in more than a year. Sandisk (SNDK) was up over +8%, Marvell Technology (MRVL) was up more than +6%, and Intel (INTC) was up over +5%. The positive mood followed strong gains for semiconductor and other AI-related stocks in South Korea, Taiwan, and Japan.

Meanwhile, the price of WTI crude edged higher on Tuesday as the U.S. and Iran exchanged strikes for a 10th straight day even as mediators worked to revive a truce, while Yemen’s Houthi militant group threatened shipping in the Red Sea.

Investors are now awaiting a new wave of corporate earnings reports.

In yesterday’s trading session, Wall Street’s main stock indexes ended mixed. Warner Bros. Discovery (WBD) fell over -3% and was among the top percentage losers on the Nasdaq 100 after a federal judge temporarily paused Paramount Skydance’s $110 billion takeover of the company, saying it “likely” violates antitrust law. Also, shares of home builders and suppliers slid after the 10-year T-note yield jumped, with D.R. Horton (DHI) falling more than -3% and KB Home (KBH) dropping over -2%. In addition, Sweetgreen (SG) slumped more than -6%, extending last week’s slide amid concerns that an outbreak of a diarrhea-causing parasite linked to fresh produce will prompt U.S. consumers to avoid the salad chain. On the bullish side, chip and AI infrastructure stocks advanced, with Marvell Technology (MRVL) rising over +3% and Sandisk (SNDK) gaining more than +2%. 

Economic data released on Monday showed that U.S. leading economic indicators edged lower in June amid weaker consumer spending. The Conference Board’s Leading Economic Index for the U.S. fell -0.2% m/m in June, weaker than expectations of -0.1% m/m.

In tariff news, the Trump administration pledged to impose a new 50% tariff on some Canadian goods, including milk, hockey equipment, beer, and plywood, over what it described as unfair treatment of American alcohol, automobiles, and dairy products.

“While the geopolitical situation is fluid and volatility may pick up, solid overall earnings should provide support for equities in the coming months,” according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.

Second-quarter corporate earnings season is gathering pace, with investors awaiting reports from notable companies today, including Charles Schwab (SCHW), Danaher (DHR), 3M Company (MMM), Northrop Grumman (NOC), and General Motors (GM). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +26% jump in quarterly earnings for Q2 compared to the previous year.

The U.S. economic data slate is largely empty on Tuesday.

U.S. rate futures have priced in an 83.4% probability of no rate change and a 16.6% chance of a 25 basis point rate hike at the upcoming monetary policy meeting.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.60%, up +0.11%.

The Euro Stoxx 50 Index is up +0.70% this morning, boosted by tech and defense stocks. Technology stocks were among the biggest gainers on Tuesday as investors grew more optimistic about names exposed to AI. Defense and mining stocks also climbed. At the same time, media stocks underperformed. The ZEW economic research institute said on Tuesday that German investor morale improved more than expected in July, supported by stronger confidence in industries affected by the Middle East conflict and the reform package proposed by the country’s government. “The economic outlook continues to improve in July,” ZEW President Achim Wambach said. Separately, data showed that the U.K.’s unemployment rate held steady and wage growth remained unchanged in the three months through May, reinforcing expectations that the Bank of England will keep interest rates unchanged next week. In addition, the European Central Bank’s quarterly Bank Lending Survey showed that Eurozone banks tightened credit standards in the second quarter amid concerns over geopolitical instability, and they expect further tightening in the current quarter. Meanwhile, investors are looking ahead to earnings from major U.S. technology companies and the ECB’s monetary policy decision due later this week. Investors are also awaiting fresh policy details from new U.K. Prime Minister Andy Burnham. In corporate news, Wienerberger AG (WIE.V.DX) sank over -5% after issuing a profit warning.

U.K. Average Earnings ex Bonus, U.K. Unemployment Rate, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.

U.K. Average Earnings ex Bonus rose +3.4% in the three months to May, in line with expectations.

The U.K. Unemployment Rate was 4.9% in the three months to May, in line with expectations.

The German July ZEW Economic Sentiment Index came in at 26.3, stronger than expectations of 15.1.

The Eurozone July ZEW Economic Sentiment Index arrived at 23.4, stronger than expectations of 11.2.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.79%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +3.26%.

China’s Shanghai Composite Index closed higher today, led by gains in the tech sector. Semiconductor and other AI-related stocks rallied on Tuesday. China is undertaking one of its broadest efforts in years to stabilize the stock market, with regulators, state-backed investors, insurers, and asset managers all taking steps to bolster confidence following a recent selloff in technology shares. The latest indication of support came on Monday, when the ChinaAMC STAR 50 ETF, the largest fund tracking the index, drew a record 13.8 billion yuan ($2 billion) in inflows. While the source of the buying was not immediately clear, traders said the magnitude of the inflows indicated that state-backed capital was being channeled into technology shares. “Investors in AI had been searching for any sign that policymakers were still willing to back the trade. The national team’s buying of the STAR 50 ETF provided exactly that signal, prompting funds to wade back in after interpreting the move as an official vote of confidence,” said Zhuang Jiapeng at Shenzhen JM Capital. Elsewhere, the Financial Times reported on Tuesday that Chinese authorities are weighing tightening export controls on AI and semiconductor technologies, reflecting Beijing’s effort to keep domestic AI at home. Investors are now shifting their focus to a late-July meeting of the Politburo, China’s top decision-making body, where policymakers typically review the economy and fine-tune policy to support growth.

Japan’s Nikkei 225 Stock Index closed sharply higher today as investors returned from the long weekend to snap up bargains following the benchmark’s steepest weekly drop in more than a year. Chip and other AI-related stocks were among the biggest gainers on Tuesday, rebounding from the recent selloff, while investors awaited key U.S. tech earnings this week for further insight into the sustainability of the AI-driven rally. Memory chipmaker Kioxia Holdings jumped over +17% and chip-testing equipment maker Advantest climbed more than +7%. Gains in financial and energy stocks also supported the Nikkei. In addition, sentiment was buoyed by hopes for a new U.S.-Iran ceasefire. Meanwhile, Japanese Prime Minister Sanae Takaichi pledged to boost investment in growth areas in her first economic blueprint, finalized on Tuesday. However, Takaichi’s vow was overshadowed by rising bond yields amid fears that the government could interfere in monetary policy. Investors’ focus this week is on Japan’s National Core CPI for June, as they continue to gauge how quickly the Bank of Japan can move forward with policy normalization. Japan’s July flash PMIs will also attract attention, providing insight into whether growth is broadening across the manufacturing and services sectors. In addition, investors will monitor the nation’s June trade data, with strong export growth expected amid robust chip-related demand and a weak yen. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -10.28% to 33.07.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks climbed in pre-market trading, with Sandisk (SNDK) jumping over +8% and Marvell Technology (MRVL) surging more than +6%.

Most members of the Magnificent Seven advanced in pre-market trading, with Tesla (TSLA) and Nvidia (NVDA) rising over +1%.

Nebius Group N.V. (NBIS) surged more than +6% in pre-market trading after Nvidia disclosed a 9.3% passive stake in the neocloud operator.

3M Company (MMM) jumped over +5% in pre-market trading after the industrial conglomerate posted upbeat Q2 results and raised its full-year guidance.

Adobe (ADBE) slumped over -4% in pre-market trading after Morgan Stanley downgraded the stock to Underweight from Equal Weight.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - July 21st

The Charles Schwab Corporation (SCHW), Danaher (DHR), Capital One Financial (COF), Marsh & McLennan Companies (MRSH), 3M Company (MMM), Northrop Grumman (NOC), General Motors Company (GM), MSCI Inc. (MSCI), D.R. Horton (DHI), Interactive Brokers Group (IBKR), EQT Corporation (EQT), Halliburton Company (HAL), KeyCorp (KEY), Synchrony Financial (SYF), Equifax (EFX), East West Bancorp (EWBC), Genuine Parts Company (GPC), Annaly Capital Management (NLY), Ally Financial (ALLY), Mueller Industries (MLI), Webster Financial (WBS), Hasbro (HAS), Vicor (VICR), Valmont Industries (VMI), Western Alliance Bancorporation (WAL), Range Resources (RRC), Hancock Whitney (HWC), Atlantic Union Bankshares (AUB), Weatherford International (WFRD), Bank OZK (OZK), AAR Corp. (AIR), Pegasystems (PEGA), Alaska Air Group (ALK), Neptune Insurance Holdings (NP), United Community Banks (UCB), WesBanco (WSBC), First Financial Bancorp. (FFBC), Nicolet Bankshares (NIC), OFG Bancorp (OFG), National Bank Holdings (NBHC), Triumph Financial (TFIN), Forestar Group (FOR), Peoples Bancorp (PEBO), Metropolitan Bank Holding (MCB), Mercantile Bank (MBWM), TrustCo Bank Corp NY (TRST), Hanmi Financial (HAFC), Capital City Bank Group (CCBG), Orrstown Financial Services (ORRF), Northpointe Bancshares (NPB), AMERISAFE (AMSF), Bridgewater Bancshares (BWB), Southern First Bancshares (SFST), KKR Real Estate Finance Trust (KREF).