US equity futures start the new week barely higher, having erased almost all of their overnight gains, yet still trading at all time highs, led by Tech with small caps starting the week in the red. As of 8:00am ET, S&P futures are fractionally in the green as traders look to the next big data print from the US this week in the form of CPI and PPI updates, as bets on September rate hikes tumbled after Friday's jobs debacle; Nasdaq futures rise 0.1%.
In premarket trading, both Mag7 and Semis are higher with weakness in Memory, Software, and South Korea despite the rise in KOSPI overnight. Cyclicals are outpacing Defensives, including participation from Energy / Cmdtys names. Europe's Stoxx 600 is coming off its best daily streak of gains since June and more money managers say that this European equities rally could be durable.
In Asia, Japan’s Nikkei 225 rose 2% and the Kospi was flat, lagging a 6% surge for the small-cap Kosdaq as it benefits from a rotation out of memory stocks and leveraged ETFs. Overnight, JPMorgan raised its year-end S&P target to 8000 as the bank sees earnings delivering $365/shr this year and $420/shr in FY27, +15% YoY. Bond yields are flat to +1bp as the yield curve twists flatter; USD trading higher following consecutive weekly declines.
USDJPY rises 0.6% toward 159, surpassing last week’s intraday high and more than erasing the drop we saw on Friday after the soft US jobs report prompted a broad dollar selloff; about half of the post-intervention move has now been erased. Commodities are led higher by Energy with MidEast headlines driving direction; Brent trades at session highs, just under $85/bbl and the highest since Aug 3, as Iran and Oman are still short of a final deal to reopen the Strait of Hormuz while Iran ruled out direct talks with the US for now.
Tehran promoted a hard-line ex-commander as its top security official. President Trump said the US was “semi-negotiating” with Iran. Israel has rejected a proposal by US-backed mediators for disarming Hamas.
Houthis are targeting Saudi refineries after SA, Pakistan, and Turkey signed a new defense pact. Both Base and precious metals are mixed with silver the standout, rallying with the AI theme. There are no major econ releases today as the market preps for CPI and Retail Sales, our Scenario Analysis is included.
With earnings season almost completed, we are seeing the SPX trend towards 15% rev growth, 50% EPS growth, and almost 17% margins. In premarket trading, Mag 7 stocks are mostly higher even as Apple falls 1.1% as Jefferies downgrades to underperform noting that the roadmap to a higher-priced iPhone looks challenging.
Meta Platforms (META) climbs 2.6% after introducing a new AI model called Muse Glimmer that can run on a single computer, allowing users to download and customize the technology (Alphabet +0.8%, Tesla +0.
4%, Nvidia +0.2%, Amazon +0.7%, Microsoft -0.
09%).Aaon (AAON) climbs 8% after the heating, ventilation, and air conditioning company reported adjusted earnings per share for the second quarter that beat the average analyst estimate.AbCellera (ABCL) climbs 22% after saying a clinical trial evaluating ABCL635 met the primary efficacy endpointsBarrick Mining’s US-listed shares (B) slip 4% after the company reached an agreement with Newmont Corp.
on their Nevada joint venture, opening the way for Barrick to list its North American assets in New York.HP Enterprise (HPE) rises 6% after Morgan Stanley upgraded its rating on the stock to overweight. Morgan Stanley is more favorable on the IT hardware industry overall due to heavy spending on AI-related infrastructure.
MarineMax (HZO) shares are halted after Safe Harbor Marinas, a Blackstone portfolio company, agreed to acquire the company for or $53.00 per share in an all-cash deal.Monday.
com (MNDY) falls 9% after the application software company posted second quarter results and providing guidance.National Energy Services Reunited Corp. (NESR) rises 10% after the company reported a 59% year-over-year increase in its revenue.
Sionna Therapeutics (SION) tumbles 91% after the biopharmaceutical company said a proof-of-concept trial did not achieve key activity endpoint.Tenax Therapeutics (TENX) sinks 84% after the development stage biotechnology company said a trial failed to meet its primary endpoint.Varex Imaging (VREX) soars 48% as Teledyne Technologies agreed to buy the company for $18.
90 per share.In other corporate news, Berkshire Hathaway spent about $4.5 billion to buy back its own shares in 2Q and purchased nearly $20 billion of equities in the period.
The stock buybacks provided shareholders with their largest quarterly payout since 2021. TSMC reported a 45% rise in its monthly sales, a sign of sustained demand for AI hardware in the face of market volatility. Apple has been testing memory chips from China’s CXMT, as the iPhone maker addresses a memory crunch during the AI boom, according to the WSJ.
Paramount Skydance has agreed to sign contracts with major theater chains guaranteeing that it will release 30 movies a year in cinemas if it acquires Warner Bros. Discovery.Stock futures are set for a modest extension of Friday’s gains, which saw US stocks close at all time highs, with a rate hike looking less likely to happen anytime soon after Friday's dismal jobs report, and strong monthly numbers from TSMC helping the AI narrative.
A stellar earnings season is in its final stretch, prompting strategists at JPMorgan to boost their year-end target for the S&P 500 to 8000.The team led by Dubravko Lakos-Bujas cited stronger cloud growth and increased backlogs at Alphabet Inc., Amazon.
com Inc. and Microsoft Corp. that should reduce worries over return on their invested capital.
“As elevated backlogs convert into recognized revenue, cloud growth should remain well supported, helping validate rising AI capex,” they said. “Across hyperscalers, demand indicators remain high and rising.”Strategists at banks including Citigroup Inc.
, Deutsche Bank AG and Goldman Sachs Group Inc. are also among the most bullish voices on US stocks this year. On average, the S&P 500 is seen rising to 7,845 points by the year end, about 1% above current levelsAs Bloomberg notes, there are fewer big market catalysts this week, though everyone will be closely looking at this week's CPI and PPI prints now that inflation is effectively the only thing the Fed is looking at to decide if to hike rates.
Investors will also look for further clues on the AI trade — and on the debate around chip valuations — when Applied Materials, Lumentum and Cisco report in the coming days. Sandisk hosts an investor day on Thursday. Further out, Nvidia numbers and the Fed’s Jackson Hole conference are expected to provide some market volatility, if options signals are anything to go by.
“With earnings largely in the rear-view mirror, geopolitics — and particularly Iran’s impact on oil prices and inflation expectations — should move back to the forefront,” said Fabio Caldato, portfolio manager at AcomeA Sgr. “We are focused on Wednesday’s US CPI print as a key test of the ongoing disinflationary process.”The S&P is tracking for earnings growth of almost 32% in the second quarter, nearly four times the average earnings growth rate outside of the coronavirus pandemic period since the fourth quarter of 2013, according to Bloomberg Intelligence, although much of that is from equity gains on investment.
However, there’s more to the story than AI, with eight of the eleven GICS sectors poised for double-digit EPS growth in 2Q, led by energy (up 133%), technology (up 68%) and materials (up 41%).In other assets, oil held onto gains from the end of last week as Iran and Oman remained short of a deal to reopen the Strait of Hormuz. Trump signaled he’s prepared to let economic pressure on Iran build rather than launch fresh military strikes, marking a shift from his repeated threats to escalate the bombing campaign.
Israel’s Netanyahu, meanwhile, hardened his position an