US stock index futures pointed to a firmer open Monday as a sharp drop in crude oil prices lifted risk sentiment, while investors braced for a data-heavy week culminating in the July nonfarm payrolls report.
WTI crude broke below the $80 level, with an intraday decline of about 7% during the Asian session, while Brent fell in tandem, after President Donald Trump signaled the suspension of new military strikes against Iran and OPEC+ moved to keep raising production. The pullback reversed part of last week's geopolitical premium and eased pressure on inflation-sensitive assets.
Equity futures held modest gains in early US trading. The tone follows a strong finish to July, with the S&P 500 rising 0.7%, the Nasdaq 100 gaining 0.6% and the Dow adding 277 points on Friday.
Nevertheless, July proved to be a lackluster month for stocks, especially for techs, amid worries over extravagant capital spending, mixed big tech earnings, re-escalation of U.S.-Iran tensions and rate worries. The NDX fell 6.6% for the month, while the broader S&P 500 Index edged down 0.13%, while the Dow gained a mere 0.32%.
Premarket Snapshot
| Instrument | Level / Move |
|---|---|
| S&P 500 futures | 7,559.25 (+0.53%) |
| Nasdaq 100 futures | 28,496.25 (+0.32%) |
| Dow futures | 53,040 (+0.77%) |
| US 10-Year Yield | 4.682 (down 6.3 basis points) |
| WTI crude | $79.66 (down 5.92%) |
| Brent crude | $83.64 (down 4.88%) |
| Gold futures | $4,107.70 (up 0.02%) |
| DXY | 99.82 (down 0.09%), softer vs. yen |
| VIX | 15.97 (down 0.12%) |
| Bitcoin | $62,592.00 (down 0.87%) |
MarketFramework's Positioning Edge tool shows that only 43.3% of retail traders are long on the Nasdaq E-mini futures (NQ) contract, which is tied to NDX. Nevertheless, longs accounted for 71.4% of the profitable trades and merely 18.8% non-profitable trades.
US Stocks in Focus
AstraZeneca shares slid more than 4% in premarket trading on reports of preliminary talks with Bristol Myers Squibb on a potential merger valued near $400 billion. Investors questioned the strategic rationale, given both companies already carry substantial market caps and AstraZeneca may not need a transformative deal. Bristol Myers Squibb (BMY) is expected to be active on the U.S. side of the tape (up over 6% in premarket).
Energy majors are in focus as crude retreats. Cruise, airline and other travel-linked names may benefit from lower fuel costs, mirroring the European sector move. Chipmakers remain in the spotlight ahead of a heavy earnings docket; SanDisk, Western Digital and other memory names carry the biggest implied earnings moves in the first week of August, while Michael Burry has added Nvidia puts and expanded bearish bets on Micron and SOXX, keeping semiconductor sentiment fragile.
McDonald's, Kraft Heinz and Walt Disney are reporting this week, and a slew of tech companies including Palantir Technologies and chipmakers including Advanced Micro Devices are also on deck.
Cryptocurrency-linked names could see pressure after U.S. spot Bitcoin ETFs recorded $265.4 million in net outflows during a single session, as Bitcoin declined to around $62,319.
Asian Markets: Chip Rout Deepens
Japanese and South Korean stock markets closed lower across the board on Monday, with both Samsung Electronics and SK Hynix plunging nearly 9%; the KOSPI closed down 5.12% at 6,257.45 points. Intraday losses on South Korea's junior market, the KOSDAQ, widened, triggering a sidecar mechanism and temporarily suspending program trading. Japan's Nikkei 225 fell 0.94% to close at 63,754.90, with heavyweight semiconductor stocks continuing to drag down the index.
Currency markets provided a separate storyline. Asian shares were mixed Monday after the U.S. and Japan confirmed they had acted to prop up the value of the Japanese yen against the U.S. dollar, sending the yen to its highest level since late last year. The dollar fell as low as 155.20 against the yen after officials confirmed they had intervened last week to curb the currency's rise to 40-year highs, versus near 164 yen last week.
Europe: Diplomacy Trade Lifts Stocks
European shares edged higher on Monday to start August on a strong note after Trump said talks with Iran were due later in the day, lifting hopes of a diplomatic breakthrough that could ease soaring oil prices. In early afternoon trading, the pan-European STOXX 600 was up 0.4% . While the German DAX and the French CAC 40 advanced solidly, the U.K.'s FTSE 100 Index was modestly lower, with AstraZeneca acting as the biggest drag.
Macro Data Preview
The events for the week of August 3 will be dominated by the July non-farm payrolls report and the national unemployment rate — figures that will be critical in validating the Federal Reserve's recent assessment of the labor market and will likely dictate the trajectory of Treasury yields in the short term. Several scheduled appearances by voting members of the FOMC will also be monitored for any nuanced interpretations of the recent policy statement. Monday's calendar is light on tier-one U.S. releases, with focus on final S&P Global manufacturing PMI and ISM manufacturing.
Technical Levels to Watch
- Nasdaq Composite: The index is in a rising trend channel in the medium long term, with support at 23,700 and resistance at 27,000.
- Nasdaq momentum caveat: RSI diverges negatively against price, indicating danger of a downside reaction.
- S&P 500: RBC's Lori Calvasina reiterated her 8,150 S&P 500 price target, saying recent choppiness has opened up some opportunities — a level to watch against last Friday's 7,489.72 close.
Broader Backdrop
Of the roughly 300 S&P 500 companies that have reported, 86% beat expectations according to FactSet data, and aggregate corporate profits for S&P 500 companies are tracking to grow more than 47.4%.
Notwithstanding the positive influence of corporate earnings, seasonality is set to be a challenge, with August and September historically weak months for stocks.
