U.S. equity futures opened lower on Tuesday, reflecting renewed market anxiety over the collapse of a potential peace deal with Iran. A senior Iranian official told Reuters that Tehran will adopt a “fully offensive” military stance after negotiations to end the conflict with the United States stalled. Washington, meanwhile, has signaled it will not extend the temporary cease‑fire that expired on August 17.
Oil and bond markets react
Brent crude futures rose 0.4%, positioning the benchmark for a third straight session of gains. Higher oil prices have rekindled inflation concerns, and Treasury yields responded sharply. The yield on the 30‑year Treasury bond climbed to its highest level since 2007, while the 10‑year benchmark hovered near its peak from January 2025.
Technology stocks feel the pressure
Heavyweight technology shares slipped as investors weighed the impact of higher government bond yields on the present value of future earnings and on corporate borrowing costs. Growth leaders Tesla and Nvidia each fell more than 1% in pre‑market trading. Meta Platforms, Microsoft and Alphabet also traded lower.
Semiconductor and chip makers retreated after a day of gains. Micron Technology, Marvell Technology, Advanced Micro Devices and Intel each dropped between 2.6% and 4.8%. Data‑storage firms Sandisk and Western Digital fell more than 5%, making them among the biggest decliners.
Market volatility and Fed outlook
The CBOE Volatility Index, Wall Street’s “fear gauge,” jumped to its highest level in roughly two weeks. At 04:50 a.m. ET, Dow E‑minis were down 79 points (‑0.15%), S&P 500 E‑mins down 42.75 points (‑0.55%) and Nasdaq 100 E‑mins down 351.5 points (‑1.17%).
The S&P 500 closed lower in the prior session, pulling back from record highs as higher crude prices revived inflation worries. Money‑market data still show traders assigning a 96% probability to a 25‑basis‑point rate hike this year, though the odds of an increase as early as September have eased after tame inflation data last week.
Upcoming economic events
Federal Reserve minutes from the July meeting, due Wednesday, may provide more insight into the central bank’s view of the current environment. Investors will also watch Fed Chair Kevin Warsh’s remarks at the Jackson Hole symposium next week for clues on forward guidance.
The quarterly earnings season is winding down. Home Depot is slated to report before the bell on Tuesday, offering a barometer of consumer health after weak July retail sales. Walmart is scheduled to release results on Thursday. Earlier this month, strong earnings from AI‑focused companies helped lift the S&P 500 and the Dow to all‑time highs; the next test for the AI trade could be Nvidia’s earnings due next week.
Tech sector volatility
U.S. technology stocks have experienced pronounced swings in recent months as investors grapple with whether heavy AI spending is delivering returns. Media reports note that Anthropic, the creator of the Claude AI model, saw its annual revenue run rate exceed $65 billion by the end of July, underscoring rapid growth ahead of a possible public listing later this year.
Overall, the combination of heightened geopolitical risk, rising oil prices and climbing Treasury yields is keeping markets on edge as investors assess the path forward for inflation, interest rates and corporate profitability.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
