U.S. stock index futures pointed to a softer open on Monday as traders weighed a fresh escalation in the Middle East against renewed bets on a Federal Reserve rate hike, with crude oil leading the overnight action and the dollar holding firm into month-end.
Oil jumped as Middle East tensions accelerated, with the WTI grade crude gaining more than 3% after the U.S. military on Sunday struck Iranian rocket launchers that were preparing to send mines into the Strait of Hormuz, ending weeks of relative calm. S&P 500 futures edged lower after the underlying index closed 0.3% down following Warsh's remarks on Friday.
The move in energy comes as month-end rebalancing flows collide with a thinner-than-usual European session, keeping cash equities on the back foot. Traders are also positioning ahead of a heavy US data slate later this week, with the ISM manufacturing print and payrolls in view.
Premarket Snapshot
| Instrument | Level | Change |
|---|---|---|
| S&P 500 futures | 7,708.50 | -0.18% |
| Dow futures | 53,499.00 | -0.16% |
| Nasdaq 100 futures | 29,460.50 | -0.11% |
| US 10-year yield | 4.724% | marginally higher |
| WTI crude | $86.31 | +3.49% |
| Brent crude | $90.98 | +3.27% |
| Gold futures | $4,498.00 | -0.70% |
| Dollar index (DXY) | 99.52 | -0.18% |
| VIX | 15.23 | +5.54% |
| Bitcoin | 78,485.86 | +0.45% |
NQ positioning is flashing an “Extreme Bearish Divergence” signal, with profitable traders significantly more defensive than losing traders. At 6:30, only 35.5% of profitable traders were long, compared with 72.7% of unprofitable traders. That means profitable traders were overwhelmingly positioned short while losing traders remained heavily long.
US Stocks in Focus
Energy names including Exxon Mobil (XOM), Chevron (CVX) and refiners are indicated higher on the back of the crude spike, while defense contractors are being watched for a geopolitical bid.
BioMarin (BMRN) shares climbed more than 6% following a settlement agreement with Ascendis Pharma, with the agreement providing for the former receiving a royalty equal to 20% of net sales of Yuviwel in the U.S., retroactive to the first commercial sale, and 18% of net sales in the European Union, Brazil and South Korea until May 2030.
Shares of Science Applications (SAIC) are in focus ahead of the company's quarterly results due before the market opens on Monday.
Asia Wrap: Mixed Close Amid Hormuz Jitters
Asian stock markets closed on a mixed note on Monday, with Japan's Nikkei 225 and Hong Kong's Hang Seng Index settling lower, while South Korea's Kospi and China's Shanghai Composite Index advanced. The negative close by Wall Street stocks on Friday weighed down on sentiment in Asia, while traders in the region also reacted to the renewed geopolitical tensions in the Middle East.
In economic news, China's manufacturing and services sectors continued to languish in recession territory in August, with the official purchasing managers' indices coming in at 49.8 and 49, respectively.
Europe: Thinner Session as London Shut
European trading is thinner because the London Stock Exchange is closed for the U.K. Summer Bank Holiday. Eurex has also suspended trading in British equity and equity index derivatives, so the early session leans harder on U.S. futures and Asian leads. The DAX and CAC 40 were trading lower in the mid-session.
Macro Data Preview
The US calendar is light on Monday. The focus will therefore stay on positioning ahead of ISM manufacturing on Tuesday and the payrolls print later in the week, with any Fed commentary parsed for confirmation of Warsh's hawkish tilt.
Technical Levels to Watch
- Nasdaq 100: The index is approacing resistance at 29,800, and this may give a negative reaction. However, a break upwards through 29,800 points will be a positive signal.
- S&P 500 futures: 7,678 acting as near-term pivot; downside focus on Friday's post-Warsh low.
- WTI crude: $87 handle back in play after the Hormuz strike; a sustained hold points to a retest of July highs.
