U.S. stock futures are on the rise as traders anticipate the July jobs report and a slate of key corporate earnings to kick off August trading. Global markets saw mixed movements, with oil prices dipping after President Trump canceled a planned strike on Iran.
Investors are closely watching for signals on economic health from upcoming earnings reports and labor data, while analysts express caution about the sustainability of recent market highs amid significant AI-related spending.
U.S. equity futures showed early gains on Monday, signaling a positive start to August trading as investors braced for the release of the July jobs report and a significant week for corporate earnings.
Futures tied to the Dow Jones Industrial Average surged by 265 points, or 0.9%, indicating a strong opening for the blue-chip index. The S&P 500 futures also advanced, climbing 0.55%, while the Nasdaq-100 futures saw a notable increase of 0.93%.
In Asian markets, a mixed sentiment prevailed. Japan's Nikkei 225 fell by 0.91%, and the Topix declined over 1%. The South Korean Kospi dropped sharply by 4.41%, though its small-cap counterpart, the Kosdaq, added 3.2%. Australia's S&P/ASX 200 remained relatively unchanged.
The global market sentiment was influenced by a significant development in geopolitical tensions. Oil prices saw a decline after U.S. President Donald Trump announced he had canceled a planned military strike on Iran. This decision came amidst reports of escalating tensions and diminishing hopes for a negotiated settlement to the ongoing conflict, which had previously driven energy prices higher.
West Texas Intermediate (WTI) crude futures for September delivery decreased by nearly 6% to $79.66 per barrel. Brent crude futures for October delivery also fell, losing 5.16% to trade at $83.39 a barrel.
The previous trading week concluded on a positive note for the major U.S. stock indices. The Dow Jones Industrial Average closed higher by 276.97 points, or approximately 0.53%, reaching 52,485.03. The S&P 500 recorded a gain of 0.7%, closing at 7,489.72, and the Nasdaq Composite surged by 1%, ending the week at 25,373.85.
As the major averages finished the week near record highs, market participants are focused on the catalysts that could sustain this upward momentum. Megan Horneman, chief investment officer at Verdence Capital Advisors, expressed caution regarding the sustainability of record high markets, especially with ongoing AI-related spending. She noted that investors are becoming increasingly discerning about allocating capital towards AI initiatives without clear evidence of corresponding earnings growth.
"The one takeaway that I had from those tech earnings is that investors don't have that appetite to just continue to pay and pay and pay without any clear insight into what this capex spending is going to do from an earnings perspective," Horneman told CNBC's "Fast Money." She added, "With big tech out of the way, what's the catalyst here that's going to get the market to continue to go higher? We just don't see it ... there are going to be more risks that we have going into August and the second half of this year."
The upcoming week's earnings reports are expected to provide deeper insights into broader economic conditions. Notable companies scheduled to release their results include McDonald's, Kraft Heinz, Costco Wholesale, and Walt Disney. Technology firms such as Palantir and semiconductor giants like Advanced Micro Devices are also on the earnings calendar.
Labor market data will be a key focus for investors throughout the week, culminating in the release of the monthly jobs report on Friday. According to FactSet consensus estimates, the U.S. economy is projected to have added 87,500 nonfarm payrolls in July, an increase from the 57,000 jobs added in the previous month. The unemployment rate is also expected to tick up slightly to 4.3% from 4.2%.
In European markets, stock exchanges began August on a positive note. The pan-European Stoxx 600 opened 0.35% higher, with most regional sectors and major bourses trading in positive territory. Travel and leisure stocks led the gains, rising 1.79%, followed by construction stocks (up 1.6%) and industrial goods (up 1.2%). Conversely, oil and gas companies experienced a slump, falling 1.79% amidst the broader decline in oil prices.
Major European indices also showed strength: Germany's DAX rose by over 0.91%, the French CAC 40 gained 0.90%, and the Italian FTSE MIB advanced by 0.81%. The U.K.'s FTSE 100 was trading flat.
In corporate news, Shell announced a deal to sell its European onshore renewables portfolio to TotalEnergies, a move aimed at focusing its power portfolio. BP completed the sale of its Gelsenkirchen refinery to Klesch Group as part of its simplification strategy. Japan and the U.S. confirmed coordinated yen intervention, signaling readiness for further action if necessary, while Alibaba shares saw a bump after launching its new AI model, Qwen3.8-Max. South Korean chipmakers SK Hynix and Samsung Electronics experienced declines after a strong preceding session. SK Inc. shares fell following the announcement of a deal to sell SK Siltron to Doosan. Toyota Motor shares dropped as analysts forecast a profit slide.
