U.S. stocks were mixed in early Tuesday trading as investors took profits and shifted their focus to the minutes from the Federal Reserve's June policy meeting, due Wednesday. While the Dow Jones Industrial Average (DJI) remained on track to extend its record highs, S&P 500 and Nasdaq 100 futures edged lower as the artificial intelligence (AI) trade lost momentum.
AI-linked technology stocks came under pressure in premarket trading after a negative market reaction to Samsung Electronics' preliminary second-quarter earnings. The results raised fresh concerns about the pace of AI-related demand and Samsung's competitive position in the high-bandwidth memory (HBM) market. In South Korea, the benchmark Kospi index tumbled nearly 5%, with semiconductor heavyweights Samsung and SK Hynix leading the decline. The selloff reflected growing investor caution over whether lofty AI-driven earnings expectations can continue to justify elevated valuations across the semiconductor sector.
Nevertheless, futures trader positioning shows neutral sentiment toward the E-mini Nasdaq 100 (NQ) futures, according to MarketFramework data.
The pullback follows a broad rally to open the week. The S&P 500 gained 0.72% to end at 7,537.43, while the Nasdaq Composite advanced 1.12% to 26,121.16 as markets started a new trading week following Friday's U.S. Independence Day holiday. The Dow Jones Industrial Average climbed 155.84 points, or 0.29%, for a record close of 53,055.91.
Fed minutes take center stage
Rate-path expectations have shifted meaningfully after last week's soft June jobs report. Data released last week showed U.S nonfarm payrolls increased by just 57,000 in June, the smallest gain in four months and well below forecasts of 110,000, prompting traders to reduce bets on a September rate hike. Meanwhile, the unemployment rate unexpectedly edged down to 4.2%, largely due to a drop in the labor force participation rate to its lowest level since 2021.
Traders are now pricing in roughly a 50% chance of a Fed rate increase in September, down from about two-thirds before the latest employment report. Investors will scrutinize the FOMC minutes for further clarity on the committee's inflation and growth assessments.
Rates, gold and oil
The yield on the US 10-year Treasury note edged up 1.4 basis points to 4.49%, after easing to around 4.479% on Monday, as investors cautiously awaited the Fed minutes. In bullion, gold steadied around $4,146 an ounce on Tuesday after a volatile start to the week, as investors awaited the minutes of the June meeting for fresh clues on the outlook for interest rates.
Crude prices climbed nearly a percent to $69.20. Meanwhile, Middle Eastern producers ramped up output and cut prices in response to changing market conditions, while OPEC+ agreed to increase production quotas for next month.
Premarket snapshot
| Instrument | Level | Change |
|---|---|---|
| S&P 500 futures | 7,583 | -0.11% |
| Nasdaq 100 futures | 26,681 | -0.87% |
| Dow futures | 53,460 | +0.17% (following Monday's record close) |
| US 10-Year Yield | 4.49% | up 1.4 basis points |
| Crude futures | $69.19 | up 0.93% |
| Gold futures | $4,147.80 | down 0.47% |
Stocks in focus
Index composition changes are a key structural story on Tuesday's open, with SpaceX officially joining the Nasdaq-100 before trading begins on July 7. The stock was down more than 1% in premarket trading.
Memory chipmaker Micron moved in sympathy with South Korean peer Samsung and fell more than 5% in premarket trading. Chipmakers AMD, Broadcom and Intel, as well as chip-equipment makers such as Lam Research were all moving sharply lower.
What's next
- FOMC minutes from the June meeting due Wednesday
- SK Hynix Nasdaq listing expected Friday, July 10
- Continued monitoring of Strait of Hormuz flows and OPEC+ output quotas
