US stock futures pointed lower on Monday, with Nasdaq futures sliding about 200 points (0.6%) as Wall Street entered a week packed with potential market movers. S&P 500 futures slipped roughly 0.2%, while Dow futures hovered near flat. The pullback follows a rough week for technology shares, which saw the S&P 500 tech sector lose more than 3% as Treasury yields climbed.
Nvidia earnings: the AI trade's biggest test
Nvidia is set to report fiscal second-quarter results on Wednesday, August 26, and the stakes could not be higher. After five consecutive daily declines, the stock enters the report with elevated expectations. Wall Street analysts, as cited by Investor's Business Daily, still anticipate exceptional revenue and earnings growth, but the bar has been raised further by reports that some customers have been told AI server prices could jump more than 15% due to surging memory costs. A miss or cautious guidance could trigger a sharp selloff in the broader semiconductor complex, which has already been under pressure from rising yields.
Iran sanctions and oil prices
Treasury Secretary Scott Bessent is expected to announce tougher sanctions on Iran at 2 pm ET, potentially targeting countries and companies that continue trading with Tehran. Oil prices dipped ahead of the announcement as traders locked in profits, with Brent crude falling toward $91 and WTI near $85. Commerzbank analysts, quoted by The Wall Street Journal, see buyers of Iranian oil as a likely focus. If the measures materially restrict exports, crude prices could quickly resume their upward climb, adding to inflation concerns.
Treasury yields remain a headwind for tech
The bond market continues to dominate equity sentiment. The 30-year Treasury yield touched around 5.34% last week, its highest level in 19 years, before Washington's decision to expand long-dated Treasury buybacks offered some temporary relief. However, investors remain focused on record government debt and persistent deficits. For technology companies, sustained high yields raise the discount rate on future earnings, just as many are borrowing heavily to fund AI infrastructure. This dynamic has been a key driver of recent volatility, as seen in chip stocks sliding alongside yields.
Jackson Hole and PCE inflation data
Federal Reserve Chair Kevin Warsh is scheduled to speak at the Jackson Hole symposium on Friday, August 28, while July PCE inflation data are due earlier in the week. Markets have scaled back expectations for an immediate rate increase after softer inflation prints, but persistent oil pressure and elevated bond yields leave the September decision far from settled. Warsh's remarks will be scrutinized for any shift in his approach to inflation and rates, and could reset Fed bets.
US-Canada trade dispute adds another headache
The US-Canada trade relationship has deteriorated sharply, with Washington imposing 50% tariffs on about $20 billion of Canadian imports after negotiations collapsed. Canada plans matching retaliation starting September 8. For investors tracking globally exposed companies, this dispute adds another source of inflation and earnings uncertainty. The Wall Street Journal noted that the tensions contributed to Monday's weakness in Nasdaq futures.
With Nvidia earnings, Iran sanctions, Jackson Hole, and trade tensions all on the calendar, this week promises to be pivotal for markets. Investors will be watching closely for any signals that could shift the outlook for rates, inflation, and the AI trade.
This article is for informational purposes only and does not constitute financial advice.
