US stock futures pointed to a weaker open on Tuesday, with the Dow Jones Industrial Average futures down about 315 points (0.59%), S&P 500 futures slipping roughly 0.56%, and Nasdaq 100 futures losing around 0.97%. The declines come as investors grapple with a resurgence of the factors that rattled markets in late summer: climbing oil prices, elevated Treasury yields, and renewed geopolitical tensions in the Middle East.
Bond yields squeeze tech valuations
The 10-year Treasury yield edged toward 4.79%, near its highest level in almost two years, as markets continued to price in a higher-for-longer interest rate environment. Richard de Chazal, macro analyst at William Blair, noted in the firm's latest Economics Weekly that the path of least resistance for yields still appears to be higher. He argued that Treasury efforts to temper long-term rates have also drawn attention to the fiscal and inflation forces pushing them up in the first place.
Rising risk-free yields are particularly uncomfortable for highly valued technology stocks, whose future earnings become less attractive as discount rates climb. This dynamic was evident in pre-market trading, with major tech names under pressure.
Oil prices add to inflation concerns
Brent crude climbed roughly 1.8% toward $92 a barrel, while West Texas Intermediate (WTI) moved above $87. Renewed US-Iran hostilities raised fears of prolonged disruption around the Strait of Hormuz, a critical chokepoint for global oil shipments. Kathleen Brooks, research director at XTB, said in a Tuesday market note that renewed military tension, alongside higher oil prices and bond yields, creates an especially difficult backdrop at the start of an already seasonally vulnerable month.
Energy stocks benefited from the surge in crude, with Exxon Mobil and Devon Energy rising more than 1% in pre-market trading.
September seasonality adds caution
September has historically been the weakest month for US equities, though the exact average depends on the period measured. Anthony Saglimbene, chief market strategist at Ameriprise, wrote on Monday that seasonal weakness alone is not a reason to abandon equities. He sees the underlying economic and corporate backdrop as still supportive and argues that investors are generally better served staying invested rather than trying to trade around the calendar.
That distinction matters after the S&P 500 delivered its strongest August in five years, as noted in our earlier coverage of AI chip rally building ahead of Nvidia's earnings.
Jobs data takes center stage
Tuesday's economic calendar features the July Job Openings and Labor Turnover Survey (JOLTS) at 10 am ET. Job openings stood at 7.36 million in June, while hires were unchanged at 5.3 million. The report comes ahead of ADP private payrolls and Friday's nonfarm-payrolls release.
With markets increasingly pricing a September Fed rate increase, weaker labor data could pull yields lower. A strong jobs reading may instead reinforce the view that the Fed has room to stay focused on inflation. The data run begins with JOLTS, which could set the tone for the week, as we saw in the Dow slides 380 points as US-Iran clashes stoke oil and rate worries.
Select stocks buck the weak tape
Robinhood rose after Morgan Stanley upgraded the stock to Overweight from Equalweight and lifted its price target to $150 from $124. The bank sees the company's expanding product range improving activity and revenue generated from its existing customer base.
Hut 8 also gained after Anthropic agreed to a $35 billion cloud-computing deal with Nvidia-backed Lambda. Hut 8 is developing the Texas data center involved in the project. These moves highlight pockets of strength even as broader markets face headwinds.
This article is for informational purposes only and does not constitute financial advice.
