Stock Index Futures Muted as Bond Yields Climb on Inflation Worries

September S&P 500 E-Mini futures (ESU26) are up +0.03%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.11% this morning, pointing to small moves at the open as rising oil prices reignited inflation concerns a day before the release of key U.S. inflation data, pushing Treasury yields higher.

The price of WTI crude rose over +2% on Tuesday, extending its advance to a fifth day, as negotiations to reopen the Strait of Hormuz hit an impasse. U.S. President Donald Trump issued sweeping new demands on Iran on Monday after Tehran renewed its calls for reparations as part of negotiations to bring the conflict to an end. “I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts. Additionally, compensation should be paid to the families of the hundreds of thousands of innocent protestors that Iran has killed over the last 50 years,” Trump wrote on social media. The new demands from Trump, which he said would be included “firmly into any, and all, future negotiations,” dimmed hopes for a quick deal to reopen the Strait of Hormuz.

Treasury yields climbed as rising oil prices reignited inflation concerns, dampening investors’ appetite for risk. The 10-year T-note yield rose two basis points to 4.73% after climbing six basis points on Monday.

In yesterday’s trading session, Wall Street’s main stock indexes closed lower. Chip stocks slid, with Arm Holdings (ARM) falling over -5% and Marvel Technology (MRVL) dropping more than -4%. Also, optical-networking stocks sank, with Coherent (COHR) plunging over -14% to lead losers in the S&P 500 and Lumentum Holdings (LITE) slumping more than -8% to lead losers in the Nasdaq 100. In addition, Nvidia (NVDA) slipped over -2% following reports that a group of U.S. investment giants was close to partnering with the company on $500 billion in funding for the buildout of AI infrastructure. On the bullish side, energy stocks climbed as oil prices advanced, with APA Corp. (APA) surging over +9% and Marathon Petroleum (MPC) gaining more than +7%.

Cleveland Fed President Beth Hammack said on Monday that several interest rate hikes may be needed to bring inflation back to the central bank’s 2% target, but she does not want to predetermine where rates will ultimately end up. Hammack said in an interview with Yahoo Finance that interest rates are not “meaningfully restricting” the economy and she does not expect inflation to return to target on its own.

Meanwhile, U.S. rate futures have priced in a 51.9% chance of a 25-basis-point rate hike and a 48.1% chance of no rate change at next month’s monetary policy meeting.

Today, investors will watch earnings reports from several high-profile companies. AI server maker Super Micro Computer (SMCI), laser and optics hardware maker Lumentum Holdings (LITE), and AI computing firm CoreWeave (CRWV) are scheduled to report their quarterly results.

On the economic data front, investors will focus on the National Association of Realtors’ existing home sales report, set to be released in a couple of hours. The report will provide insight into market momentum in the third quarter, after a decline in pending home sales pointed to softer buyer demand. Economists expect sales of previously owned U.S. homes to come in at 4.05 million units (annualized) in July, compared to 4.09 million units in June.

Investor attention will then turn to Wednesday’s July consumer inflation report for clues on the path of interest rates. Headline inflation is forecast to slow to +3.4% y/y in July, while core inflation is expected to ease to +2.5% y/y, marking the smallest increase since February. Readings in line with or below these estimates would strengthen the case for the Fed to stay on hold.

“Hotter-than-expected inflation data would likely hurt U.S. stocks more than a dovish report would boost the benchmark,” according to the JPMorgan Market Intelligence team.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.74%, up +0.47%.

The Euro Stoxx 50 Index is down -0.01% this morning, swinging between modest gains and losses as investors assessed developments surrounding the U.S.-Iran conflict. Oil prices climbed for a fifth straight day as hopes for the reopening of the Strait of Hormuz faded, keeping inflation risks and the interest-rate outlook in focus. Travel and leisure stocks led the declines on Tuesday, weighed down by concerns over elevated fuel costs. Limiting losses, energy stocks climbed. Technology stocks also gained, buoyed by news that Intel raised $20 billion in an upsized share sale and that U.S. investment giants were partnering with Nvidia to source $500 billion in funding for AI infrastructure. Meanwhile, Eurozone government bond yields rose on Tuesday, extending yesterday’s advance as rising oil prices reignited inflation concerns. Traders are currently pricing in 41 basis points of monetary tightening from the European Central Bank this year. Attention now turns to the U.S. inflation report due tomorrow, which will provide fresh clues on the Fed’s interest-rate path and ripple through global bond markets. In corporate news, Alcon (ALC.Z.EB) rose about +4% after the eye-care company boosted its full-year earnings guidance.

The European economic data slate is mainly empty on Tuesday.

China’s Shanghai Composite Index (SHCOMP) closed down -0.82%, while Japan’s financial markets were closed for a public holiday.

China’s Shanghai Composite Index closed lower today, snapping a five-session winning streak as sentiment weakened amid fading hopes for the reopening of the Strait of Hormuz and any Middle East peace deal. U.S. President Donald Trump hardened his stance toward Iran on Monday, saying he would demand war reparations from Tehran after the Islamic Republic called for compensation for damage caused by the conflict. The latest twist makes it unlikely that Washington and Tehran will reach any immediate agreement on the Strait of Hormuz. Non-ferrous metal stocks led the declines on Tuesday. Semiconductor stocks also slumped as investors rotated out of an increasingly crowded AI trade. At the same time, robotics stocks climbed after Unitree said on Monday its $900 million Shanghai initial public offering was more than 8,000 times oversubscribed by retail investors. Meanwhile, China’s central bank said the volume of seven-day reverse repos conducted through open-market operations was zero on Tuesday. It marked the first time since June that the People’s Bank of China injected no liquidity through reverse repos. Investor attention this week is on China’s money-supply and credit data for July, which will provide further insight into business investment and consumer demand in the world’s second-largest economy. Economists anticipate that credit growth will remain subdued.

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

Pre-Market U.S. Stock Movers

Upwork (UPWK) cratered over -19% in pre-market trading after the freelancing platform cut its full-year guidance.

Hims & Hers Health (HIMS) slid more than -4% in pre-market trading after the telehealth company posted a wider-than-expected Q2 loss, overshadowing an increase in its full-year guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - August 11th

Lumentum Holdings (LITE), Cardinal Health (CAH), CoreWeave (CRWV), Venture Global (VG), Super Micro Computer (SMCI), Quantinuum (QNT), Aramark (ARMK), Smithfield Foods (SFD), DPC Holdings (DPC), CAVA Group (CAVA), Erasca (ERAS), The Middleby Corporation (MIDD), H&R Block (HRB), Veradermics (MANE), Firefly Aerospace (FLY), Astronics (ATRO), ERock (EROC), Cardinal Infrastructure Group (CDNL), Mineralys Therapeutics (MLYS), Biohaven (BHVN), NextNav (NN), Taysha Gene Therapies (TSHA), Flowco Holdings (FLOC), Vestis (VSTS), Bicara Therapeutics (BCAX), Anterix (ATEX), Septerna (SEPN), Ambiq Micro (AMBQ), Absci (ABSI), Savara (SVRA), Aktis Oncology (AKTS), LB Pharmaceuticals (LBRX), Vor Biopharma (VOR), Rackspace Technology (RXT), Lightwave Logic (LWLG), Sana Biotechnology (SANA), Evolv Technologies Holdings (EVLV), United States Antimony (UAMY), TXO Partners (TXO), Janus International Group (JBI), Hyliion Holdings (HYLN), Energy Vault Holdings (NRGV), Enviri (NVRI), Factorial Energy (FAC), Terrestrial Energy (IMSR), Sagimet Biosciences (SGMT), Aquestive Therapeutics (AQST), NeuroPace (NPCE).