US stock futures moved higher on Monday as investors tracked developments in the US-Iran conflict and looked ahead to a key week of Big Tech earnings. Dow Jones futures were trading 0.18% higher at 52,469 points, indicating a more than 300-point higher opening on Wall Street, while S&P 500 index futures were up 0.43% at 7,529.75 points, suggesting a 70-point higher opening. Nasdaq-100 futures gained 0.88% at 29,026.50 points, indicating a more than 400-point opening compared to Friday's close. The move came after US Secretary of State Marco Rubio indicated that the United States is receiving signals through multiple channels that Iran is looking to negotiate amid continued military attacks. As per MarketWatch, the Dow Jones Industrial Average closed 0.77% lower at 52,146.42 points on Friday, while the S&P 500 index fell 1.01% to 7,457.69 points and the Nasdaq 100 dropped 1.49% to 28,592.66 points after a market-wide selloff due to rising geopolitical tensions and AI technology skepticism among global investors.
The week ahead is light on economic data as the entire period falls inside the Fed's blackout period ahead of the July 28-29 FOMC meeting. As reported by Investing.com India, odds are that the committee's statement will remain hawkish but postpone any rate hiking. The Fed Jackson Hole Conference from August 27-29 will be closely watched for policy signals, with the current funds rate range at 3.50%-3.75%. Market expectations for a potential rate hike have receded following softer-than-anticipated inflation pressures. However, the benchmark 10-year Treasury yield has risen to 4.56%, up 2 basis points on Monday, while 30-year Treasuries are back above the psychological 5.0% barrier. According to The Economic Times, futures markets are pricing in at least one Federal Reserve rate hike by year-end, with the policy-sensitive German 2-year yield rising to a peak of 2.817% on Monday, its highest in two years.
According to Investing.com India, markets have their own summer fixture list to fill the World Cup-shaped void. July 20th marks Britain's new prime minister appointment, with Andy Burnham inheriting discontented football fans and inflation concerns expected to edge closer to 3.5% this summer. July 23rd features the European Central Bank decision, where energy prices are dragging the ECB closer to its June base case forecasts. July 30th brings US Core PCE inflation data and Bank of England decision, while August 7th includes the US jobs report. The Fed Jackson Hole Conference from August 27-29 will be closely watched for policy signals. As reported by The Economic Times, money markets see more tightening from the European Central Bank, which they see as likely to raise rates again in September, with traders pricing an 80% chance of a further move by year-end.
The earnings reporting season is jam-packed this week, with Wednesday stacking up as the busiest day featuring major tech giants. As reported by Investing.com India, GE Vernova (NYSE:GEV), Texas Instruments (NASDAQ:TXN), Alphabet (NASDAQ:GOOGL), IBM (NYSE:IBM), and Tesla (NASDAQ:TSLA) all report on Wednesday, while Intel reports on Thursday. The consensus of analysts' estimates now implies Q2-2026 operating EPS growth for S&P 500 companies of 22.9% y/y, up from 21.6% a week earlier. However, one major downside is that earnings might only meet analysts' already high expectations, with hyperscalers potentially scaling back guidance for capital spending. BofA analyst Savita Subramanian remains upbeat on the earnings outlook, tipping a 5% beat versus consensus, or 28% growth, with tech expected to drive over half of growth and semiconductors expected to rise around 130% year-on-year. As reported by The Economic Times, the earnings will reinforce or challenge this year's gains, which have been driven by a surge in AI capital spending lifting semiconductor stocks.
The oil market faces significant risks from escalating Middle East tensions, with US forces carrying out nine rounds of military attacks in Iran to destroy the country's ability to attack vessels in the Strait of Hormuz. As reported by LiveMint, Brent crude slipped to around $87.68 per barrel during evening market hours on Monday, compared to $88.1 per bbl at the previous commodity market close, though crude oil prices rose 4% during Monday's trading session as energy rates hit $91.41 per barrel as investors fear another upcoming period of supply chain disruption if Iran shuts down the key maritime oil trading route. The renewed exchange of attacks has seen the US target bridges and electrical infrastructure inside Iran, with Iran reportedly firing missiles toward Jordan, raising fears that the conflict could spread further across the region. Brent crude has risen 5.3% in the last five trading sessions and gained nearly 10% in the last one-month period, according to Investing.com data, though prices have been down 3% in the last three months. The latest developments show Yemen's Iran-aligned Houthis declaring a naval blockade against Saudi Arabia, adding to regional tensions, though reports suggest mediators had passed Iran a proposal to de-escalate the war with the U.S..
The semiconductor sector remains under significant pressure as renewed geopolitical tensions in the Middle East, coupled with stretched valuations, prompt investors to rotate into defensive and value-oriented sectors. As reported by LiveMint, the Philadelphia Semiconductor Index (SOX) plunged 2% on Friday, extending its decline to more than 20% from its late-June peak, officially pushing the index into bear market territory. The renewed concerns over the sustainability of the artificial intelligence trade and whether hyperscalers will be able to continue investing trillions of dollars in AI infrastructure and capital expenditure have further intensified the selloff in semiconductor stocks. Last week, all three major US indices ended in negative territory, with technology stocks bearing the brunt of the selling pressure after reports emerged that Chinese AI startup Moonshot had developed a new artificial intelligence model capable of competing with leading offerings from OpenAI and Anthropic. According to The Economic Times, investors are already jittery, and the powerful rally in chip stocks gave way to a sharp reversal last week, with the earnings season providing more clarity on secondary effects of the war and broader economic implications.
