Stock Index Futures Slip as Bond Yields Surge, U.S. JOLTS Report in Focus

September S&P 500 E-Mini futures (ESU26) are down -0.49%, and September Nasdaq 100 E-Mini futures (NQU26) are down -0.91% this morning as rising oil prices drove bond yields higher, with traders ramping up bets on a Federal Reserve interest-rate hike this month.

The price of WTI crude rose over +2% on Tuesday, extending yesterday’s advance as fresh hostilities between the U.S. and Iran heightened concerns about prolonged disruptions to energy flows through the Strait of Hormuz. U.S. forces struck two Iranian rocket launchers on Sunday, while Tehran responded with a barrage of missiles and drones against U.S. air bases in Jordan. The latest exchange of strikes between the U.S. and Iran prompted President Trump to say the U.S. would “hit them hard.” Meanwhile, two oil supertankers attempting to leave the Strait of Hormuz were hit by projectiles in rapid succession late Monday, according to maritime security consultants Marisks.

Treasuries fell across the curve on Tuesday as rising oil prices fueled inflation concerns. Those concerns, in turn, raised expectations for a Fed rate hike, with traders boosting the odds of a September move to 66.4%. The 10-year T-note yield climbed three basis points to 4.79%, the highest level since January 2025.

Investors are now looking ahead to U.S. job openings data, remarks from a Federal Reserve official, and earnings reports from Palo Alto Networks and Dell Technologies.

In yesterday’s trading session, Wall Street’s main stock indexes ended mostly lower. Edison International (EIX) tanked over -23% to lead losers in the S&P 500, and PG&E Corp. (PCG) sank more than -20% after California lawmakers introduced a bill that would revise the state’s wildfire response without shifting liability away from publicly traded utilities. Also, airlines and other travel stocks slid as oil prices rose, with Carnival (CCL) falling over -3% and Delta Air Lines (DAL) dropping more than -2%. In addition, Take-Two Interactive Software (TTWO) slumped over -6% and was the top percentage loser on the Nasdaq 100 amid a series of leaks surrounding “Grand Theft Auto VI” ahead of the game’s November 19th release. On the bullish side, CrowdStrike Holdings (CRWD) climbed more than +5% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the company unveiled its new Falcon IQ solution at Fal.Con 2026, along with a range of platform integrations and strategic partnerships.

Meanwhile, a historically tough month for equities has just begun. The S&P 500 has fallen an average of 0.8% in September over the past three decades, though the index bucked that seasonal trend in each of the past two years, according to data compiled by Bloomberg. That makes September the worst-performing month of the year over that period, compared with an average gain of 0.9% in the other 11 months.

“With traders tracking geopolitical volatility as well as potential seasonal volatility, it will be interesting to see which market impulse from last week might carry over to this week. Unexpectedly strong labor-market data might be taken as bad news by the market, since it could reinforce expectations for a rate hike,” said Chris Larkin at E*Trade from Morgan Stanley.

U.S. rate futures have priced in a 66.4% chance of a 25-basis-point rate hike and a 33.6% chance of no rate change at the Fed’s monetary policy committee meeting later this month.

Today, investors will keep a close eye on U.S. JOLTS Job Openings data, set to be released in a couple of hours. Economists forecast that July JOLTS Job Openings will come in at 7.330 million, compared with 7.359 million in June.

The U.S. ISM Manufacturing PMI and S&P Global Manufacturing PMI will also be in focus today. Economists expect the August ISM manufacturing index to dip to 55.2 from 55.6 in July, while the final S&P Global manufacturing PMI is projected to be revised upward to 53.3 from the preliminary reading of 53.2.

U.S. Construction Spending data will be released today as well. Economists project July construction spending to be unchanged m/m after falling -0.1% m/m in June.

In addition, market participants will be looking toward a speech from Fed Governor Michael Barr.

On the earnings front, cybersecurity firm Palo Alto Networks (PANW), server maker Dell Technologies (DELL), and medical device maker Medtronic (MDT) are slated to release their quarterly results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.79%, up +0.71%.

The Euro Stoxx 50 Index is down -0.75% this morning, kicking off September on a sour note as oil prices and global bond yields climbed following renewed hostilities between the U.S. and Iran. Eurozone government bond yields jumped to fresh multi-year highs on Tuesday as higher oil prices fueled inflation concerns. Travel & Leisure and defense stocks were among the biggest losers on Tuesday. At the same time, energy stocks climbed as oil prices extended their advance after the U.S. and Iran returned to tit-for-tat strikes. Preliminary data from Eurostat released on Tuesday showed that the Eurozone’s annual inflation rate accelerated to its highest level in nearly three years in August, reinforcing the case for an interest-rate hike by the European Central Bank next week. Separately, a survey showed that the Eurozone’s manufacturing sector expanded at its fastest pace in more than four years in August. Meanwhile, European Central Bank Governing Council member Martin Kocher said on Tuesday that upside risks to inflation have increased and that an interest-rate hike may be needed soon if those risks are confirmed in the central bank’s next forecast. The ECB will announce its latest rate decision and publish updated macroeconomic projections next week. Money markets have fully priced in a 25-basis-point rate hike at the upcoming meeting. In corporate news, Air Liquide (AI.FP) gained over +2% following reports that activist investor Elliott Management had built a stake in the company.

Eurozone’s CPI (preliminary), Eurozone’s Core CPI (preliminary), Eurozone’s Manufacturing PMI, and Eurozone’s Unemployment Rate were released today.

Eurozone’s August CPI rose +3.3% y/y, in line with expectations.

Eurozone’s August Core CPI rose +2.4% y/y, weaker than expectations of +2.5% y/y.

Eurozone’s August Manufacturing PMI was revised lower to 52.7 from the preliminary reading of 52.8.

Eurozone’s July Unemployment Rate was 6.4%, weaker than expectations of 6.3%.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.16%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.15%.

China’s Shanghai Composite Index closed slightly lower today, dragged down by weakness in the tech sector. Semiconductor and other AI-related stocks slumped on Tuesday as a surge in global bond yields prompted investors to trim exposure to riskier assets. As risk appetite waned, investors rotated into more defensive corners of the market. Liquor, consumer, and bank stocks outperformed, limiting the benchmark index’s losses. Meanwhile, a private survey released on Tuesday showed that China’s manufacturing activity expanded at a faster pace in August, highlighting resilience among the country’s export-oriented firms despite a broader economic slowdown. “The manufacturing sector strengthened in August, with demand, output and exports all accelerating,” said Yao Yu, founder of RatingDog. The RatingDog general manufacturing PMI has been above the 50 threshold separating expansion from contraction for nine straight months, marking its longest expansionary streak in five years. In corporate news, Shein Global Holdings shares recovered from an early drop of as much as 10% to close little changed in their Hong Kong debut after a years-long journey to an initial public offering that ultimately valued the company at a fraction of its former valuation and still left investors questioning its appeal as a consumer play.

The Chinese August RatingDog Manufacturing PMI stood at 51.5, stronger than expectations of 51.0.

Japan’s Nikkei 225 Stock Index closed slightly lower today as a jump in bond yields prompted investors to rotate out of heavyweight technology stocks and into other sectors. Japan’s 10-year government bond yield touched 3% for the first time since 1996 on Tuesday as a selloff in U.S. Treasuries and regional bonds intensified after renewed Middle East tensions drove oil prices higher, fueling inflation concerns and raising the prospect of tighter monetary policy globally. Chip-related stocks were among the biggest losers on Tuesday. At the same time, utility, energy, and automobile stocks climbed, helping to limit the benchmark index’s losses. Meanwhile, data released on Tuesday showed that Japanese companies raised capital spending in the second quarter, signaling strong business confidence that could lead to an upward revision to second-quarter GDP growth and strengthen the case for near-term rate hikes by the Bank of Japan. “Strong global growth in AI is creating pressure on Japanese companies to boost investment so they do not fall behind competitors,” said Takeshi ⁠Minami at Norinchukin Research Institute. Separately, a survey showed that Japan’s manufacturing sector gained momentum in August as new business expanded at the fastest pace since January 2018, supported by robust demand for semiconductors and AI-related products. Elsewhere, Japanese Finance Minister Satsuki Katayama said Japan and the U.S. share a common view on the global importance of an “orderly yen” and continue to coordinate their efforts in the currency market. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -6.65% to 25.98.

The Japanese Capital Spending unexpectedly rose +1.6% y/y in the second quarter, stronger than expectations of -0.2% y/y.

The Japanese August S&P Global Manufacturing PMI was revised lower to 54.9 from the preliminary reading of 55.1. 

The Japanese August Household Confidence stood at 35.5, stronger than expectations of 35.3. 

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks edged lower in pre-market trading, with Nvidia (NVDA) and Tesla (TSLA) dropping over -1%.

Chip and AI infrastructure stocks slid in pre-market trading. Sandisk (SNDK) was down about -3%, Marvell Technology (MRVL) was down more than -2%, and Intel (INTC) was down over -1%.

Energy stocks gained in pre-market trading as oil prices extended their advance. ConocoPhillips (COP), Occidental Petroleum (OXY), and ExxonMobil (XOM) were up over +1%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - September 1st

Palo Alto Networks (PANW), Dell Technologies (DELL), Medtronic (MDT), Credo Technology Group Holding (CRDO), MongoDB (MDB), GameStop (GME), GitLab (GTLB), MiniMed Group (MMED), Yext, Inc. (YEXT).