Stocks Set to Open Higher as Oil Sinks on U.S.-Iran Deal Hopes, Jobs Data and Earnings Awaited

September S&P 500 E-Mini futures (ESU26) are up +0.57%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.47% this morning, pointing to a higher open on Wall Street as oil prices sank after U.S. President Donald Trump revived hopes for a deal to ease tensions in the Middle East.

The price of WTI crude slumped more than -6% on Monday after U.S. President Donald Trump abandoned plans to strike Iran and said new U.S.-Iran talks would begin. President Trump late Saturday called off a strike on Iran, saying on social media that Iran and other Middle Eastern countries had asked the U.S. not to attack and that the “perimeters of a deal has been agreed to.” He added that the deal would include reopening the Strait of Hormuz to commercial shipping. Mr. Trump told reporters on Sunday that the U.S. would begin talks with Iran on Monday afternoon. “It would have been the biggest attack since World War II,” Trump said, adding that they would see whether the deal could be reached and that he was not seeking to kill people. Meanwhile, Iranian Foreign Minister Abbas Araghchi said talks with Oman on a mechanism for ships to pass through the Strait of Hormuz were “nearing completion and in their final stages.”

Treasuries rose across the curve on Monday as a sharp drop in oil prices eased inflation concerns. The 10-year T-note yield fell five basis points to 4.69%.

This week, market participants are looking ahead to a new batch of corporate earnings reports, comments from Federal Reserve officials, and a slew of U.S. labor market data.

In Friday’s trading session, Wall Street’s major equity averages closed higher. Amazon.com (AMZN) jumped over +15% and was the top percentage gainer on all three major Wall Street averages after the company’s cloud-computing unit, Amazon Web Services, recorded the fastest quarterly revenue growth since 2021 in Q2. Also, DexCom (DXCM) surged nearly +12% after the diabetes-device maker posted upbeat Q2 results and raised the lower end of its full-year revenue guidance. In addition, Monolithic Power Systems (MPWR) climbed more than +8% after the company reported better-than-expected Q2 results and issued above-consensus Q3 revenue guidance. On the bearish side, Apple (AAPL) slumped over -7% and was the top percentage loser on the Dow and Nasdaq 100 after the iPhone maker provided FQ4 revenue growth guidance that fell short of analysts’ expectations.

Economic data released on Friday showed that the University of Michigan’s U.S. July consumer sentiment index was unexpectedly revised upward to a 5-month high of 55.2. Economists had forecast a downward revision to 53.9. Also, the U.S. Q2 employment cost index rose +0.9% q/q, stronger than expectations of +0.8% q/q. In addition, the U.S. Chicago PMI unexpectedly rose to 57.6 in July, stronger than expectations of 56.0.

Three Fed officials said in statements on Friday that stubborn inflation prompted their dissenting votes for higher interest rates at the July FOMC meeting. Cleveland Fed President Beth Hammack said, “In my view, now is the time for the FOMC to act to speed the return of PCE inflation to our 2% objective and deliver on our commitment to price stability for the American people,” adding that “the longer that high inflation persists, the more challenging and costly it can be to bring it back down.” Also, Dallas Fed President Lorie Logan said she believes that even if inflation eases, it is unlikely to fall all the way back to the Fed’s 2% target unless the central bank raises interest rates. “Without any policy restraint, inflation will likely continue to trend above target until there’s an unanticipated shock,” Logan said. In addition, Minneapolis Fed President Neel Kashkari said that while he supports the economic practice of “looking through” the inflationary impact of supply shocks, he is also concerned that the series of shocks the U.S. has experienced in recent years could cause inflation to become entrenched. “To manage against the risk that high inflation could become entrenched, I would rather tighten policy incrementally as we gather the data on the path of inflation and employment,” Kashkari said.

Richmond Fed President Tom Barkin said in an interview with The Wall Street Journal on Friday that it is “a close call” whether the central bank’s current interest-rate setting is restrictive enough to lower inflation, adding that he was unsure whether he would have joined three fellow regional Fed presidents who voted for higher rates.

Meanwhile, U.S. rate futures have priced in a 64.7% chance of a 25 basis point rate hike and a 35.3% chance of no rate change at the next FOMC meeting in September.

The U.S. July Nonfarm Payrolls report will be the main highlight this week as investors assess the outlook for interest rates over the coming months. Economists expect the key jobs report to show the unemployment rate holding steady at 4.2% while payrolls increase by 88K. Such a headline figure would represent a “Goldilocks-type” outcome—weak enough to support the case for the Fed to remain on hold in September, yet firm enough not to raise concerns about an economic downturn. Other labor market data to watch include JOLTS Job Openings, the ADP Nonfarm Employment Change, and Initial Jobless Claims. The U.S. Trade Balance, Factory Orders, the S&P Global Services PMI, the ISM Non-Manufacturing PMI, Nonfarm Productivity (preliminary), Unit Labor Costs (preliminary), and Consumer Credit data will also attract attention.

Market participants will also pay close attention to speeches from Fed officials. Fed Governor Lisa Cook, Richmond Fed President Tom Barkin, St. Louis Fed President Alberto Musalem, and Kansas City Fed President Jeff Schmid are scheduled to speak this week.

Second-quarter corporate earnings season continues in full force, and investors await new reports from prominent companies this week, including Advanced Micro Devices (AMD), Sandisk (SNDK), SpaceX (SPCX), Western Digital (WDC), ON Semiconductor (ON), Palantir Technologies (PLTR), Walt Disney (DIS), McDonald’s (MCD), Caterpillar (CAT), Eli Lilly and Company (LLY), Gilead Sciences (GILD), Pfizer (PFE), Shopify (SHOP), Uber Technologies (UBER), and Cloudflare (NET). 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.

Today, investors will focus on the U.S. ISM Manufacturing PMI, set to be released in a couple of hours. Economists expect the July ISM manufacturing index to be 54.0, compared to the previous month’s value of 53.3. Investors will be closely watching the “Prices Paid” component for signs of renewed inflationary pressures stemming from an escalation in the Middle East, along with the new orders sub-index for clues about future demand. A stronger-than-expected print would strengthen the case for a Fed rate hike before year-end.

The U.S. S&P Global Manufacturing PMI will also be released today. Economists anticipate that the final July figure will remain unrevised at 53.8.

U.S. Construction Spending data will be released today as well. Economists project June ​construction spending to rise +0.2% m/m after the +0.1% m/m gain a month earlier.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.69%, down -1.03%.

The Euro Stoxx 50 Index is up +1.00% this morning, buoyed by a sharp drop in oil prices after U.S. President Donald Trump said fresh U.S.-Iran talks would begin on Monday. Trump’s remarks fueled optimism that the two sides could reach an agreement to reopen the Strait of Hormuz. Travel and leisure stocks were among the biggest gainers on Monday. Defense and automobile stocks also climbed. At the same time, energy stocks slumped. A survey released on Monday showed that Eurozone factory output jumped at its fastest pace in nearly 4-1/2 years in July, though growth was driven mainly by firms working through order backlogs rather than stronger demand, highlighting the fragility of the recovery. Separately, data showed that Switzerland’s annual inflation rate eased in July despite a rebound in global energy prices following the resumption of hostilities in the Middle East. In addition, data showed that Germany’s monthly retail sales fell more than expected in June. Investor focus now shifts to the Eurozone’s June retail sales data, along with June industrial production figures from France, Spain, Italy, and Germany, scheduled for release later this week. In corporate news, AstraZeneca Plc (AZN.LN) slumped over -6% following reports that the U.K. drugmaker had held merger talks with U.S. rival Bristol Myers Squibb.

Germany’s Retail Sales, Switzerland’s CPI, and Eurozone’s Manufacturing PMI were released today.

The German June Retail Sales fell -1.1% m/m, weaker than expectations of -0.4% m/m.

Switzerland’s July CPI fell -0.1% m/m and rose +0.4% y/y, in line with expectations.

Eurozone’s July Manufacturing PMI was revised lower to 51.9 from the preliminary reading of 52.0.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.59%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.94%.

China’s Shanghai Composite Index closed lower today, dragged down by weakness in the tech sector. Semiconductor and other AI-related stocks sank on Monday. Also weighing on sentiment, a private survey released on Monday showed that China’s manufacturing sector unexpectedly slowed in July, adding to signs of economic weakness. Meanwhile, China’s central bank said in a statement released on Sunday that it would adjust its monetary policy tools in a timely manner and support panda bond issuance. The People’s Bank of China will continue to pursue an appropriately loose monetary policy and ensure ample liquidity, according to a readout from a work meeting held on Saturday to outline priorities for the second half of the year. Elsewhere, China’s top securities regulator said on Monday that China and Hong Kong will introduce more exchange-traded fund products tracking Chinese assets. In corporate news, Alibaba Group surged over +7% in Hong Kong after releasing its latest flagship AI model, Qwen3.8-Max, with performance claims putting it on par with global leaders such as Anthropic’s Fable. Investor attention this week is on China’s inflation and trade data for July. Economists expect China’s consumer inflation to moderate further, while producer inflation is projected to ease after accelerating for three consecutive months. A weaker-than-expected CPI reading would likely strengthen calls for more forceful policy support and could place greater focus on the “effective and practical new measures” pledged by the Politburo for the September-October period. At the same time, economists project the nation’s exports and imports to remain robust in July.

The Chinese July RatingDog Manufacturing PMI stood at 50.9, weaker than expectations of 51.9.

Japan’s Nikkei 225 Stock Index closed lower today as a sharp appreciation in the yen weighed on equities. The Japanese currency gained as much as 1.4% on Monday amid the prospect of further intervention by monetary authorities in the foreign-exchange market following the first coordinated U.S.-Japan action to support the yen in 15 years. Japan’s Ministry of Finance said it carried out a yen-buying operation on July 31st, U.S. time, in coordination with the U.S. Treasury Department and would not hesitate to conduct further joint intervention. Export-oriented stocks such as automakers were among the biggest losers on Monday. A stronger yen reduces the value of overseas earnings for Japanese exporters. Meanwhile, Japanese government bond yields climbed on Monday as the joint intervention prompted investors to step up bets on an early Bank of Japan interest rate hike. “Japan and the U.S. conducted joint currency intervention, which means Japan is under pressure to support the yen with fundamentals this time, such as with monetary policy,” said Rinto Maruyama at SMBC Nikko Securities. On the economic front, a survey released on Monday showed that Japan’s manufacturing output grew at its fastest rate in more than 12 years in July, with broad-based improvements across the sub-indexes. In corporate news, Kioxia Holdings climbed over +5% after the memory chipmaker announced a large share buyback and a stock split. Investor focus this week is on Japan’s wage data for June, which will be scrutinized for signs that stronger pay growth is supporting underlying inflation and the case for further policy normalization by the BOJ. Market participants will also closely watch the minutes of the BOJ’s June meeting, at which it raised interest rates to a three-decade high of 1.00%. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +20.83% to 35.50.

The Japanese July S&P Global Manufacturing PMI was revised lower to 54.5 from the preliminary reading of 54.7.

Pre-Market U.S. Stock Movers

Most members of the Magnificent Seven advanced in pre-market trading. Amazon.com (AMZN), Meta Platforms (META), Microsoft (MSFT), Alphabet (GOOGL), and Tesla (TSLA) were up more than +1%.

Airlines and other travel stocks gained in pre-market trading as oil prices sank, with United Airlines Holdings (UAL) rising over +2% and Carnival (CCL) advancing more than +1%.

Ferguson Enterprises (FERG) surged nearly +8% in pre-market trading after S&P Dow Jones Indices announced that the stock would join the S&P 500 Index on August 5th.

Bristol Myers Squibb (BMY) climbed over +6% in pre-market trading after the Financial Times reported that the U.S. drugmaker and its U.K.-based rival AstraZeneca had held talks over a potential merger.

Chip and AI infrastructure stocks slipped in pre-market trading, with Sandisk (SNDK) and Arm Holdings (ARM) falling over -2%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - August 3rd

Palantir Technologies (PLTR), McDonald’s (MCD), Vertex Pharmaceuticals (VRTX), Marriott International (MAR), The Williams Companies (WMB), ONEOK (OKE), Diamondback Energy (FANG), TKO Group Holdings (TKO), ON Semiconductor (ON), EchoStar (ECHO), Loews (L), Tyson Foods (TSN), SBA Communications (SBAC), Sterling Infrastructure (STRL), Viper Energy (VNOM), Jazz Pharmaceuticals (JAZZ), BWX Technologies (BWXT), Grab Holdings (GRAB), CNA Financial (CNA), Trimble (TRMB), CNH Industrial (CNH), The Clorox Company (CLX), Advanced Energy Industries (AEIS), Krystal Biotech (KRYS), Allison Transmission Holdings (ALSN), Alexandria Real Estate Equities (ARE), Protagonist Therapeutics (PTGX), Jackson Financial (JXN), Hess Midstream LP (HESM), Vornado Realty Trust (VNO), Snap Inc. (SNAP), Powell Industries (POWL), TG Therapeutics (TGTX), JBT Marel (JBTM), Matson (MATX), New Jersey Resources (NJR), Twist Bioscience (TWST), MakeMyTrip (MMYT), Sabra Health Care REIT (SBRA), CRISPR Therapeutics AG (CRSP), Cabot (CBT), Sportradar Group AG (SRAD), Paymentus Holdings (PAY), Independence Realty Trust (IRT), Dorman Products (DORM), Crescent Energy Company (CRGY), Ultra Clean Holdings (UCTT), Tidewater (TDW), Otter Tail (OTTR), Avista (AVA), Golub Capital BDC (GBDC), Black Stone Minerals (BSM), People (PPLI), Celldex Therapeutics (CLDX), Adeia (ADEA), Gulfport Energy (GPOR), V2X, Inc. (VVX), InvenTrust Properties (IVT), Boise Cascade Company (BCC), Ichor Holdings (ICHR), Danaos (DAC), Whirlpool (WHR), The Andersons (ANDE), Custom Truck One Source (CTOS), Diversified Healthcare Trust (DHC), Addus HomeCare (ADUS), Vertex (VERX), UFP Technologies (UFPT), Innovex International (INVX), Lindblad Expeditions Holdings (LIND), Alamo Group (ALG), GeneDx Holdings (WGS), Stoke Therapeutics (STOK), Damora Therapeutics (DMRA), Innovative Industrial Properties (IIPR), Kosmos Energy (KOS), Hillman Solutions (HLMN), Capital Southwest (CSWC), Voyager Technologies (VOYG), Inspire Medical Systems (INSP), Sally Beauty Holdings (SBH), Atlas Energy Solutions (AESI), United Fire Group (UFCS), Alexander's (ALX), Ethos Technologies (LIFE), Easterly Government Properties (DEA), TETRA Technologies (TTI), Ameresco (AMRC), Tortoise Energy Infrastructure (TYG), Douglas Dynamics (PLOW).