Key facts
- U.S. stock index futures were subdued as a deadlock in U.S.-Iran talks pushed up oil prices.
- President Donald Trump countered Iran's conditions for a peace deal by demanding reparations, complicating efforts to reopen the Strait of Hormuz.
- Brent crude futures gained 2% to hit over one-week highs, building on a more than 5% jump clocked in the previous session.
- Rising energy costs have spurred inflation concerns and chances of interest rate hikes by central banks.
- Readings of July consumer and producer price inflation due later this week could be key in ascertaining the U.S. Federal Reserve's interest rate path.
- The Nasdaq Composite closed lower Monday as confidence in a deal regarding the Strait of Hormuz faded.
U.S. stock index futures were subdued on Tuesday as a deadlock in U.S.-Iran talks pushed up oil prices and discouraged investors from taking risks while the inflation outlook remained uncertain. President Donald Trump on Monday countered Iran's conditions for a peace deal by demanding reparations for people killed in wars, attacks and protests, complicating efforts to reopen the Strait of Hormuz.
Brent crude futures gained 2% to hit over one-week highs, building on a more than 5% jump clocked in the previous session as supply disruption anxiety continued. Rising energy costs have spurred inflation concerns and chances of interest rate hikes by central banks around the world.
Readings of July consumer and producer price inflation due later this week could be key in ascertaining the U.S. Federal Reserve's interest rate path, given the central bank's focus on the inflation mandate and Chair Kevin Warsh's stance on cutting back forward guidance on rates. As things stand, money market data shows traders are almost evenly split between a rate-hike and a pause in September, according to the CME FedWatch Tool.
At 5:45 a.m. ET, Dow E-minis were down 48 points, or 0.09%, and S&P 500 E-minis were up 1.75 points, or 0.02%. Nasdaq 100 E-minis were up 33 points, or 0.11%.
Wall Street's main indexes closed lower in the previous session as investors assessed the situation in the Middle East, though the S&P 500 and the Dow hovered near their all-time highs. The Nasdaq, meanwhile, sits about 2.1% from its all-time highs, but well above its July lows, which saw the tech-heavy index fall almost 10% from its last record closing high. A strong showing of corporate earnings in the current quarter across several sectors has boosted U.S. stocks to new peaks, with evidence of high AI-related spending showing signs of paying off also easing some jitters.
On Tuesday, megacap and growth stocks were mixed. Nvidia inched up 0.9% in premarket trading after falling 2.9% in the last session. Intel dipped 1%, extending Monday's losses as the company announced the pricing of its $20 billion upsized stock offering. Riot Platforms jumped 21%, following a media report that the cloud computing firm clinched a $9 billion deal with Anthropic. Rocket Lab slid 9.3% after the space company appeared to push back the timeline for the first flight of its Neutron rocket. U.S.-listed shares of On dropped 16.2% after the sportswear brand missed Wall Street estimates for second-quarter net sales. Hims & Hers Health shed 6.4% after the telehealth company posted a wider-than-expected second-quarter loss.
The quarterly earnings season was in its last stretch, with almost 90% of the S&P 500 companies having reported already. LNG company Venture Global and drug distributor Cardinal Health are some of the companies reporting earnings before markets open on Tuesday.