US stock futures wavered on Tuesday morning as markets awaited a key consumer inflation report, recalibrated bets on the AI trade, and monitored rising oil prices amid the renewed US-Iran war.
Contracts on the Dow Jones Industrial Average (YM=F) slipped 0.3% in premarket trading, while those on the S&P 500 (ES=F) declined 0.2%. Futures on the Nasdaq 100 (NQ=F) rose 0.2%.
Investors awaited the Consumer Price Index report at 8:30 a.m. ET for a key read of the inflation situation. Economists expect consumer price inflation cooled in June; however, that has not deterred bond traders from increasing their bets that the Federal Reserve will hike interest rates at its July 28-29 meeting.
A combination of rate-hike speculation, capex spending concerns, and profit-taking has put AI chip stocks on the back foot, with newly listed US shares of South Korea’s SK Hynix (SKHY) dropping further after a successful US IPO on Friday.
Oil prices, meanwhile, edged higher after Brent crude futures (BZ=F) notched their biggest single-day jump in years on Monday. The US plans to begin enforcing a blockade of the Strait of Hormuz on Tuesday afternoon and charge a 20% fee on all cargo crossing the waterway, reviving concerns that an energy shock could flow through to core inflation.
On the earnings docket this morning are a series of second quarter reports from JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), and Goldman Sachs (GS). Expectations are high: Analysts are expecting the big Wall Street banks to post one of their strongest quarters ever.
