Stock Index Futures Climb as Chipmakers Rebound and Bond Yields Fall, U.S. Economic Data in Focus

September S&P 500 E-Mini futures (ESU26) are up +0.47%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.94% this morning as chipmakers rebounded, with lower bond yields providing additional support after oil prices extended declines.

Chip and AI infrastructure stocks climbed in pre-market trading, rebounding from yesterday’s rout. The gains signaled cautious optimism ahead of Nvidia’s second-quarter earnings report on Wednesday, a key test for the AI trade and the broader market.

Also aiding sentiment, the price of WTI crude fell over -3% on Tuesday as traders viewed U.S. measures aimed at economically isolating Iran as posing less risk to supply than a military escalation. Also, the New York Times reported that the U.S. is preparing to return diplomats to embassies in the Middle East, signaling that Washington does not expect a resumption of a full-scale conflict with Iran. The drop in oil prices helped push Treasury yields lower, with the 10-year T-note yield falling three basis points to 4.67%.

Investors are now awaiting a fresh batch of U.S. economic data.

In yesterday’s trading session, Wall Street’s main stock indexes closed mostly lower. Chip and AI infrastructure stocks sank, with Seagate Technology Holdings (STX) sliding over -6% to lead losers in the S&P 500 and Nasdaq 100 and Micron Technology (MU) falling more than -5%. Also, energy stocks declined as oil prices fell, with Diamondback Energy (FANG) and Halliburton (HAL) dropping over -2%. In addition, Regenxbio (RGNX) cratered more than -24% after the FDA placed a clinical hold on its investigational gene therapy RGX-121 for Hunter syndrome. On the bullish side, Expedia Group (EXPE) rose over +5% and was the top percentage gainer on the S&P 500 after Evercore ISI raised its price target on the stock to $430 from $375.

U.S. President Donald Trump said on Monday that the U.S. would impose 50% tariffs on automobiles and auto parts imported from Canada starting in January, marking the latest escalation in a tit-for-tat trade conflict that flared up over the weekend. “On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” Trump said on Truth Social. U.S. tariffs on Canadian automobiles currently stand at 25%, with discounts for U.S.-made content in vehicles, while tariffs on steel are set at 50%. Canada’s government will announce its response to U.S. tariffs later today.

Today, investors will focus on the U.S. Conference Board’s Consumer Confidence Index, which is set to be released in a couple of hours. Economists, on average, forecast that the August CB Consumer Confidence Index will come in at 90.3, down from last month’s reading of 90.8.

The U.S. S&P/CS HPI Composite - 20 n.s.a. will also be released today. Economists expect the June figure to pick up to +1.8% y/y from +1.6% y/y in May.

U.S. New Home Sales data will be published today. Economists project July new home sales at 620K, compared with 628K in June.

The U.S. Richmond Fed Manufacturing Index will be released today as well. Economists expect the index to come in at 6 in August, up from 5 in July.

In addition, market participants will be anticipating a speech from Richmond Fed President Tom Barkin.

On the earnings front, tax software company Intuit (INTU), aerospace and electronics components maker Heico (HEI), and retailer Dick’s Sporting Goods (DKS) are set to report their quarterly figures today.

Later this week, attention will shift to Nvidia’s earnings report after the bell on Wednesday and Kevin Warsh’s first Jackson Hole speech as Fed chairman on Friday.

“This is a key week for markets with Nvidia’s earnings and the annual Jackson Hole speech, which normally wouldn’t have a link, but Nvidia needs to impress in order to keep one leg of the stock market stable, and Warsh needs to provide clarity on interest rates in order to keep the other leg of the stock market stable,” said Richard Reyle at Questar Capital Partners.

U.S. rate futures have priced in a 59.6% chance of no rate change and a 40.4% chance of a 25-basis-point rate hike at the September FOMC meeting.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.67%, down -0.60%.

The Euro Stoxx 50 Index is up +0.51% this morning as lower oil prices eased inflation concerns and bond-market pressures, boosting investors’ risk appetite. Defence stocks led the gains on Tuesday, with Melrose Industries (MRO.LN) climbing over +9% after the company said it expects to resume full production at its Garden Grove facility by September 28 and pay up to $100 million to settle damage claims stemming from a May incident involving an overheating chemical tank. Chip-related stocks also advanced, rebounding from Monday’s selloff. At the same time, luxury and automobile stocks slid, limiting the broader market’s gains. German statistics agency Destatis said on Tuesday that the nation’s economy grew faster than initially reported in the second quarter, boosted by stronger exports. Separately, a survey showed that German business confidence rose in August to its highest level since before the Middle East conflict began, adding to evidence that Europe’s largest economy is finally gaining momentum toward a long-awaited recovery. “Companies were more satisfied with their current situation, and they revised their expectations significantly upward,” according to Ifo President Clemens Fuest. In other corporate news, Vistry Group Plc (VTY.LN) surged over +16% after the U.K. homebuilder said it would receive an initial 350 million pounds ($477.1 million) in government funding to help build social and affordable housing across the country.

Germany’s Ifo Business Climate Index, Germany’s GDP, and France’s Consumer Confidence data were released today.

The German August Ifo Business Climate Index stood at 88.8, stronger than expectations of 87.2.

The German GDP rose +0.3% q/q and +1.0% y/y in the second quarter, stronger than expectations of +0.2% q/q and +0.9% y/y.

The French August Consumer Confidence came in at 86, weaker than expectations of 87.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.19%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.50%.

China’s Shanghai Composite Index ended higher today after a choppy session. A-share trading volume dropped to 1.83 trillion yuan ($272.20 billion) on Tuesday, the lowest level since April 7th, as investors turned cautious ahead of Nvidia’s earnings and Fed Chairman Kevin Warsh’s speech at the annual Jackson Hole symposium later this week. Technology stocks edged higher on Tuesday, tracking a recovery among regional peers. However, the benchmark index’s gains were limited as non-ferrous metal stocks slumped, tracking a retreat in gold prices. Also weighing on sentiment was the roughly 45% plunge in shares of humanoid robot maker Unitree since its more than fivefold surge on its Shanghai debut, raising concerns about bubble risks, retail investor losses, and shortcomings in the IPO system. Meanwhile, Reuters reported on Tuesday that the order book for online fast-fashion retailer Shein’s Hong Kong IPO, which aims to raise up to $1.8 billion, was fully covered by investor demand. In corporate news, XPeng sank over -9% in Hong Kong after the EV maker issued weaker-than-expected Q3 delivery guidance. Investor attention this week is on China’s July industrial profits data, which will offer another gauge of the health of the corporate sector in the world’s second-largest economy. Investors are also watching the National People’s Congress Standing Committee meeting, which runs from August 25th to August 28th, for possible policy signals aimed at bolstering growth as economic momentum weakens.

Japan’s Nikkei 225 Stock Index reversed earlier losses and closed higher today, buoyed by a rebound in chip-related stocks. The Nikkei initially fell as much as -1.4% as chip-related stocks tracked overnight losses among their U.S. peers, but most later erased their early declines and turned higher as Nasdaq 100 futures climbed, lifting the benchmark index. Strength in financial stocks also provided support to the Nikkei. The Bank of Japan said on Tuesday that its gauge of underlying inflation rose by +2.3% in July from a year earlier on a 2025-base basis, remaining above the central bank’s 2% target and reinforcing widespread expectations for a September rate hike. Separately, data showed that Japan’s June leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, was revised upward. Meanwhile, Japanese government bond yields edged higher on Tuesday, tracking a modest rise in U.S. Treasury yields during Asian trade, though moves were limited as investors awaited speeches from central bank officials in Japan and the U.S. Elsewhere, Japanese Finance Minister Satsuki Katayama said on Tuesday that the government will carefully consider possible tax incentives for retail investors in government bonds. Investor focus this week is on Japan’s August Tokyo Core CPI, along with the Corporate Services Price Index and employment data for July. Market participants will also closely watch a speech from BOJ Deputy Governor Ryozo Himino. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +8.11% to 30.41.

The Japanese June Leading Index was revised upward to 116.5 from the preliminary reading of 116.4.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks climbed in pre-market trading, rebounding from yesterday’s rout. Sandisk (SNDK) and Intel (INTC) were up over +4%, Marvell Technology (MRVL) was up more than +3%, and Micron Technology (MU) was up over +2%.

Advanced Micro Devices (AMD) gained more than +3% in pre-market trading after Raymond James upgraded the stock to Strong Buy from Outperform with a price target of $641.

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

Bloom Energy (BE) climbed more than +5% in pre-market trading, extending yesterday’s gains after a congressional disclosure revealed that Nancy Pelosi had taken a position in the clean-energy company for the first time.

Energy stocks fell in pre-market trading as oil prices extended losses, with Occidental Petroleum (OXY) and APA Corp. (APA) dropping over -1%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - August 25th

Intuit (INTU), Heico (HEI), Zoom Communications (ZM), Dick’s Sporting Goods (DKS), Semtech (SMTC), Box, Inc. (BOX), The Marzetti Company (MZTI), nCino (NCNO), CURRENC Group (CURR), Electromed (ELMD), Strattec Security (STRT), SCHMID Group (SHMD).