U.S. equity futures move lower ahead of Nvidia earnings
U.S. stock futures traded lower early Tuesday, suggesting Wall Street may open under pressure as investors remain cautious following Monday’s uneven session.
Technology shares are expected to remain in focus as concerns grow that valuations across the sector have become stretched after the market’s recent surge to record highs.
Traders are now turning their attention toward Nvidia’s (NASDAQ:NVDA) quarterly earnings report due after Wednesday’s close, with markets closely watching for signals on artificial intelligence demand and future growth expectations.
Given Nvidia’s dominant position in the AI industry, the company’s results and outlook are expected to play a major role in shaping broader market sentiment.
Oil prices and bond yields continue to influence sentiment
Investors are also keeping a close eye on elevated oil prices and the recent rise in Treasury yields, although both eased modestly during Tuesday morning trading.
“While the Nasdaq remains near highs and the broader AI trade is still intact, recent sessions have seen some profit-taking in semiconductors and mega-cap tech as yields rise and positioning looks increasingly stretched,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, “The market is not abandoning the earnings and AI story but the combination of higher oil, higher yields and extremely strong positioning is making it harder for the sector to continue its near-vertical ascent without pauses or pullbacks.”
Markets recover late after another volatile session
Following Friday’s sharp decline, U.S. stocks remained under pressure for much of Monday before staging a partial recovery late in the trading session.
The major indexes finished well above their intraday lows, with the Dow Jones Industrial Average managing to close in positive territory.
The Dow gained 159.95 points, or 0.3%, ending at 49,686.12. The S&P 500 slipped 5.45 points, or 0.1%, to close at 7,403.05, while the Nasdaq Composite dropped 134.41 points, or 0.5%, to 26,090.73.
Geopolitical tensions remain a key market risk
Early selling pressure on Wall Street was linked to persistent concerns over the conflict in the Middle East after President Donald Trump warned that for Iran the “clock is ticking.”
Posting on Truth Social, Trump said Iran “better get moving, FAST, or there won’t be anything left of them,” sparking renewed concerns that the United States could resume military operations.
Axios reported, citing two U.S. officials, that Trump is expected to meet with senior national security advisers on Tuesday in the Situation Room to review military options.
The conflict between the United States and Iran has effectively disrupted shipping through the Strait of Hormuz, a critical route for global oil flows, intensifying concerns about inflation and interest rate expectations.
Treasury yields surged on Friday as traders increasingly speculated that the Federal Reserve’s next move could potentially involve raising rates rather than cutting them.
Oil prices and Treasury yields continued climbing through much of Monday’s session, adding to negative sentiment across equity markets.
However, stocks trimmed losses later in the day after Trump said he had chosen to delay military action against Iran following appeals from Middle Eastern leaders.
Trump said he instructed the military to remain “prepared to go forward with a full, large scale assault of Iran, on a moment’s notice, in the event that an acceptable Deal is not reached.”
Semiconductor shares lead declines while energy stocks outperform
Chipmakers recorded some of the steepest losses during Monday’s session, dragging the Philadelphia Semiconductor Index down 2.5%.
Computer hardware companies also faced heavy selling pressure, with the NYSE Arca Computer Hardware Index falling 2.2%.
Meanwhile, oil service companies benefited from higher crude prices, helping lift the Philadelphia Oil Service Index by 3.4%.
Oil producers, telecom companies and commercial real estate stocks also posted gains, helping reduce the broader market’s overall losses.
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