Markets prepare for a crucial week of corporate results
US stock index futures moved higher on Tuesday as investors looked ahead to a wave of earnings from leading technology companies while continuing to monitor developments in the Middle East and the outlook for artificial intelligence investment.
As of 02:49 ET (06:49 GMT), Dow Jones futures were up 170 points, or 0.3%, S&P 500 futures had gained 39 points, or 0.5%, and Nasdaq 100 futures climbed 359 points, or 1.3%.
The gains followed a weaker session on Wall Street, where concerns over the long-term sustainability of AI spending weighed on sentiment. Semiconductor stocks tied to artificial intelligence surrendered much of their earlier rally, with the sector finishing only 0.6% higher after posting gains of more than 3% during the session.
Markets were also digesting increased competition from emerging Chinese AI developers, adding another layer of uncertainty to the sector.
Meanwhile, President Donald Trump signed executive orders introducing a 50% tariff on a wide range of Canadian imports, including paper products, plywood and hockey sticks. The new duties are due to take effect within 30 days.
Geopolitical uncertainty keeps investors cautious
Risk appetite remained restrained after Yemen’s Iran-backed Houthi movement threatened to block Saudi shipping, raising concerns that the regional conflict could spread further and disrupt global energy supplies.
The warning came as military exchanges between Washington and Tehran entered a tenth consecutive day despite continuing diplomatic contacts aimed at reducing tensions.
Investors also remained focused on the Strait of Hormuz and the Bab al-Mandab Strait, two critical maritime routes whose disruption could have significant implications for global oil and liquefied natural gas exports.
Oil holds above pre-war levels
Crude prices eased slightly but continued to trade well above the levels seen before the conflict escalated.
Brent crude slipped 0.1% to $89.17 per barrel, while US West Texas Intermediate gained 0.2% to $83.40.
Before hostilities intensified in late February, Brent had been trading close to $70 per barrel. Renewed geopolitical instability has kept prices elevated despite earlier ceasefire efforts.
Higher energy costs continue to raise concerns that inflation could remain stubborn, potentially influencing future monetary policy decisions.
Earnings season gathers pace
Investors are awaiting results from Charles Schwab (NYSE:SCHW), Danaher (NYSE:DHR), 3M (NYSE:MMM), Northrop Grumman (NYSE:NOC) and General Motors (NYSE:GM) before US markets open.
After the closing bell, Interactive Brokers, Chubb and Capital One are also due to report.
In Europe, Novartis (NYSE:NVS) exceeded expectations for second-quarter core operating profit as cost controls offset softer sales of Entresto. The company’s shares rose more than 1% in early trading.
Attention will quickly turn to Alphabet (NASDAQ:GOOG), Tesla (NASDAQ:TSLA) and Texas Instruments (NASDAQ:TXN), whose quarterly reports later this week are expected to provide important signals about the pace of AI-related investment.
Nvidia increases exposure to Nebius
Nvidia (NASDAQ:NVDA) disclosed a 9.3% ownership stake in AI cloud infrastructure company Nebius (NASDAQ:NBIS), following its previous $2 billion investment.
Regulatory filings showed the holding totals approximately 22.26 million shares, including shares associated with warrants that cannot be exercised before 11 September.
Nebius shares gained around 5% in after-hours trading.
Headquartered in Amsterdam, Nebius was created from the separation of Yandex and plans to build more than five gigawatts of AI computing capacity by 2030.
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