Markets look ahead to a pivotal week for technology companies
US equity futures traded higher on Tuesday as investors prepared for a busy earnings calendar led by major technology companies, while continuing to monitor escalating tensions in the Middle East and questions surrounding the sustainability of artificial intelligence investment.
By 02:49 ET (06:49 GMT), Dow Jones futures had gained 170 points, or 0.3%, S&P 500 futures were up 39 points, or 0.5%, and Nasdaq 100 futures advanced 359 points, or 1.3%.
Wall Street ended Monday’s session lower after concerns resurfaced over whether the current pace of AI-related capital spending can be maintained. Semiconductor companies linked to artificial intelligence erased much of their earlier gains, with a sector index closing just 0.6% higher after previously climbing more than 3%.
Investor sentiment was also affected by growing competition from new Chinese artificial intelligence models.
Separately, President Donald Trump signed executive orders imposing a 50% tariff on a broad range of Canadian exports, including paper, plywood and hockey sticks. The measures are scheduled to take effect in 30 days.
Middle East conflict keeps energy markets on edge
Geopolitical risks remained elevated after the Iran-backed Houthi movement in Yemen announced plans to impose a blockade on Saudi shipping, raising concerns that the conflict could spread further across the region.
The announcement came as military exchanges between the United States and Iran entered a tenth consecutive day despite diplomatic efforts aimed at securing a temporary pause in hostilities.
Attention also remained focused on the Strait of Hormuz, one of the world’s most important energy shipping routes. Any further disruption, combined with potential restrictions in the Bab al-Mandab Strait, could significantly affect global energy supplies.
Oil prices ease but remain well above pre-conflict levels
Oil prices edged lower on Tuesday, although they continued to trade considerably above levels seen before the conflict intensified.
Brent crude slipped 0.1% to $89.17 per barrel, while US West Texas Intermediate crude added 0.2% to $83.40 per barrel.
Before military operations began in late February, Brent crude had traded close to $70 per barrel. Although prices briefly retreated following the preliminary ceasefire agreement reached in June, renewed hostilities have kept energy markets volatile.
Higher oil prices continue to fuel concerns that inflationary pressures could strengthen again, potentially influencing future central bank interest rate decisions.
Heavy earnings calendar expected to drive markets
Investors are preparing for another busy day of corporate earnings before the opening bell, with Charles Schwab (NYSE:SCHW), Danaher (NYSE:DHR), 3M (NYSE:MMM), Northrop Grumman (NYSE:NOC) and General Motors (NYSE:GM) all scheduled to report.
Following the close of trading, quarterly updates are expected from Interactive Brokers, Chubb and Capital One.
In Europe, Novartis (NYSE:NVS) exceeded second-quarter core operating profit expectations as lower operating costs offset weaker sales of its Entresto heart medication. Shares in the Swiss pharmaceutical group gained more than 1% in early trading.
Market attention will then shift to the technology sector on Wednesday, when Alphabet (NASDAQ:GOOG), Tesla (NASDAQ:TSLA) and Texas Instruments (NASDAQ:TXN) release quarterly results that could provide fresh insight into AI-related spending trends.
Nvidia expands investment in Nebius
Nvidia (NASDAQ:NVDA) disclosed that it now holds a 9.3% stake in cloud computing company Nebius (NASDAQ:NBIS), following its previous $2 billion investment earlier this year.
Regulatory filings showed the position totals approximately 22.26 million shares, including shares linked to warrants obtained through the earlier investment.
The filing also confirmed that Nvidia cannot exercise those warrants before 11 September. Nebius shares rose around 5% in after-hours trading.
Amsterdam-based Nebius focuses on artificial intelligence cloud infrastructure and was created following its separation from Yandex. The company aims to build more than five gigawatts of computing capacity by 2030 and has already established a partnership with Nvidia.
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