Futures for the Dow Jones Industrial Average and the other major stock indexes traded sharply mixed Tuesday ahead of a key inflation report. IBM was a big early loser on the stock market today, as shares lost nearly a fourth of their value on earnings. S&P 500 futures sank, while Nasdaq futures edged higher.
US stock futures wavered on Tuesday morning as markets awaited a key consumer inflation report, recalibrated bets on the AI trade, and monitored rising oil prices amid the renewed US-Iran war. Economists expect consumer price inflation cooled in June; however, that has not deterred bond traders from increasing their bets that the Federal Reserve will hike interest rates at its July 28-29 meeting.
A combination of rate-hike speculation, capex spending concerns, and profit-taking has put AI chip stocks on the back foot, with newly listed US shares of South Korea’s SK Hynix dropping further after a successful US IPO on Friday. Oil prices, meanwhile, edged higher after Brent crude futures notched their biggest single-day jump in years on Monday.
The US plans to begin enforcing a blockade of the Strait of Hormuz on Tuesday afternoon and charge a 20% fee on all cargo crossing the waterway, reviving concerns that an energy shock could flow through to core inflation. On the earnings docket this morning are a series of second quarter reports from JPMorgan, Bank of America, Wells Fargo, Citigroup, and Goldman Sachs. Expectations are high: Analysts are expecting the big Wall Street banks to post one of their strongest quarters ever.
