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Global stock futures saw an early Tuesday rebound as investors shifted focus from Middle East tensions to upcoming corporate earnings, with Dow, S&P 500, and Nasdaq 100 futures climbing. Despite ongoing geopolitical conflicts involving Iran and Houthi threats, oil prices eased due to renewed diplomatic mediation hopes. Traders are now keenly anticipating earnings reports from tech giants like Alphabet and Tesla, alongside industrial names such as GM and 3M, seeking insights into AI spending and economic outlooks.
Stock futures saw a bounce back early Tuesday, recouping losses from the prior session as investors pivoted their attention from escalating Middle East tensions to upcoming corporate earnings reports.
Futures tied to the Dow Jones Industrial Average advanced 0.35%, while S&P 500 futures climbed 0.5%, and Nasdaq 100 futures jumped 1.12%.
This surge followed a challenging regular trading day where the Dow shed 307.16 points, or 0.59%, largely due to a 2% dip in Apple shares. The broader S&P 500 also declined 0.19%, and the tech-heavy Nasdaq Composite saw a modest 0.05% loss.
Geopolitical concerns, particularly the Iran war, have been a significant market factor. Central Command has executed its tenth consecutive night of strikes on Iran following President Donald Trump's declaration that the ceasefire was 'over.' Meanwhile, Tehran's forces have retaliated against U.S. military assets across the Middle East, and its Houthi allies have announced a maritime embargo against Saudi Arabia.
Despite the military exchanges, oil prices edged lower in early trading. Traders closely monitored renewed diplomatic efforts for mediation between the U.S. and Iran, with reports suggesting a proposed 10-day ceasefire. West Texas Intermediate (WTI) crude futures dropped 0.88% to $82.50 a barrel, and international benchmark Brent crude was nearly 1% lower at $88.34.
Monday's session saw oil prices rise after President Trump's Truth Social post vowed consequences for the deaths of three U.S. service members. This rise in energy costs had initially pulled major averages down, even as semiconductor stocks, including Micron Technology and Advanced Micro Devices, partially recovered from previous losses, pushing the VanEck Semiconductor ETF (SMH) to a modest gain.
Callie Cox, chief market strategist at Ritholtz Wealth Management, noted, "It looks to be a quiet week ahead for stock investors that could be dominated by technicals and geopolitical headlines." She added that while earnings continue to flow in, they might offer more support than a significant catalyst, given already high expectations. The strategist also highlighted rising yields globally, presenting investors with a tough choice between growth and income, putting pressure on the stock market after an impressive three-month rally.
As companies unveil their latest earnings this week, traders are keenly searching for insights into artificial intelligence spending and any signs of increased caution from executives regarding the second half of the year. Major companies slated to report later this week include Alphabet, IBM, and Tesla. General Motors and 3M are scheduled to report Tuesday morning, with Chubb's quarterly results expected after the closing bell.
European markets kicked off the session broadly higher, with the Stoxx 600 gaining 0.10%, as most major bourses advanced, though regional sectors showed mixed performance. Asia-Pacific markets closed in positive territory, with Japan's Nikkei 225 surging over 3% to 66,232.19, and the Topix rising 2.44% to 4,014.95. South Korea's Kospi advanced 3.56% to 6,747.95, while the Kosdaq edged up 0.49% to 753.34. Australia's S&P/ASX 200 remained relatively flat at 8,793.3. Mainland China's CSI 300 was up over 3% at 4,739.23, and Hong Kong's Hang Seng index gained 0.25% in its final hour of trade.
European equities opened Tuesday's session higher. The pan-European Stoxx 600 advanced 0.14% shortly after 8:10 a.m. in London. Most major continental bourses notched early gains, with Italy's FTSE MIB rising 0.55%, Germany's DAX up 0.19%, and France's CAC 40 adding 0.15%. However, the U.K.'s FTSE 100 was down 0.31%. Regional sectors were mixed, with technology stocks and mining names both up about 1.2%, while media companies tumbled 0.9%.
Asia-Pacific markets closed in the green. Japan's Nikkei 225 added over 3% to 66,232.19, while the Topix rose 2.44% to 4,014.95. South Korea's Kospi advanced 3.56% to 6,747.95, and the Kosdaq edged up 0.49% to 753.34. Australia's benchmark S&P/ASX 200 was little changed at 8,793.3. Mainland China's CSI 300 was up over 3% at 4,739.23, while Hong Kong's Hang Seng index rose 0.25% in the last hour of trade.
European markets had been set for a mixed open on Tuesday, influenced by falling oil prices. London's FTSE 100 was projected to open 0.56% lower, due to its energy majors. France's CAC 40 was set to open 0.17% lower, while Germany's DAX was flat. Italy's FTSE MIB was in positive territory, up 0.26%. Futures tied to the Stoxx 50 were seen 0.1% higher.
Britain's new Prime Minister, Andy Burnham, began his premiership by cutting electricity bills. His new Chancellor, John Healey, the former defense secretary, is seen as a 'safe pair of hands' as he navigates significant fiscal pressures. Healey's appointment, replacing Rachel Reeves, surprised many who expected Home Secretary Shabana Mahmood to take the role. Burnham, who took office Monday, promised a 'new economic model' for Britain with a 10-year reindustrialization plan and a more collaborative political approach. He is expected to detail further policy measures to ease the U.K.'s cost-of-living burden and funding strategies in a speech later Tuesday. Analysts note Healey faces a tight fiscal backdrop, with the looming Autumn Budget being a critical domestic policy event, as earlier buffers have been eroded by higher rates, a softer macro-outlook, and renewed geopolitical risks.
U.S. Treasury yields eased across the curve on Tuesday. The benchmark 10-year Treasury yield slipped 0.6 basis point to 4.592%, while the two-year yield fell 1.1 basis points to 4.204%. The 30-year bond yield eased 0.3 basis point to 5.115%. BMO Capital Markets strategists indicated that the Treasury market remained relatively steady despite Middle East escalations, as mediation hopes offset the initial jump in oil prices. They warned that without significant U.S. economic data this week, government bonds might remain vulnerable to sharp moves in energy prices and developments in the Iran conflict, requiring July and August inflation reports for clarity on energy-driven inflation pressures.
Oil prices dipped on Tuesday as investors weighed reports of potential U.S.-Iran mediation efforts against fresh military exchanges and new threats from Yemen's Houthis to impose a naval blockade on Saudi Arabia. U.S. crude futures for August delivery fell 0.3% to $82.98 per barrel, while international Brent crude futures for September delivery declined 0.56% to $88.72 per barrel. Rystad Energy senior vice president Jorge Leon highlighted the Houthis' capability and willingness to disrupt Red Sea shipping, despite lacking clarification on how the blockade would be enforced.
Mainland China's CSI 300 initially slipped 0.18%, and Hong Kong's Hang Seng index also declined 0.18% in early trading. However, Deutsche Bank's chief investment officer for emerging markets, Jacky Tang, remains optimistic about Chinese equities in the second half of the year, citing structural tailwinds such as artificial intelligence, energy security investment, state-owned enterprise reforms, and export-oriented companies. He believes China will continue to perform well in the latter half of the year, despite year-to-date declines for both the Hang Seng Index (around 1.8%) and the CSI 300 (about 0.3% lower).
Asia-Pacific markets opened mixed on Tuesday. Japan's Nikkei 225 added 0.8%, with the Topix rising 0.86%. South Korea's Kospi advanced 0.1%, while the Kosdaq declined 0.72%. Australia's benchmark S&P/ASX 200 was down 0.58%.
Earlier, Asia-Pacific markets were poised for a mixed open as investors considered escalating Middle East tensions, new U.S. tariffs on Canadian imports, and higher oil prices. Japan's Nikkei 225 was expected to open higher, with Chicago futures at 64,965 compared to its last close of 64,141.12. Futures for Hong Kong's Hang Seng index traded at 25,099 against its close of 25,143.05. Australia's S&P/ASX 200 futures were at 8,717 compared to its close of 8,791.3. U.S. President Donald Trump's vow of consequences for Iran following the deaths of three American service members, coupled with Yemen's Houthi militants' threat of a maritime embargo on Saudi Arabia, heightened energy supply concerns. Separately, the Trump administration imposed an additional 50% tariff on various Canadian imports, accusing Ottawa of unfair trade practices across several U.S. industries, targeting Canadian motor vehicles, alcohol, and dairy products to address perceived discriminatory treatment of U.S. exports.
U.S. equity futures opened flat on Monday night. Futures tied to the Dow Jones Industrial Average ticked up 12 points, or 0.02%. S&P 500 futures and Nasdaq 100 futures were slightly down by 0.05% and 0.01%, respectively.
