Stock Index Futures Climb as Chipmakers Rebound and Bond Yields Fall, U.S. Economic Data in Focus

September S&P 500 E-Mini futures (ESU26) are up +0.47%, and September Nasdaq 100 E-Mini futures (NQU26) are up +0.94% this morning as chipmakers rebounded, with lower bond yields providing additional support after oil prices extended declines.

Chip and AI infrastructure stocks climbed in pre-market trading, rebounding from yesterday's rout. The gains signaled cautious optimism ahead of Nvidia's second-quarter earnings report on Wednesday, a key test for the AI trade and the broader market.

Also aiding sentiment, the price of WTI crude fell over -3% on Tuesday as traders viewed new U.S. measures aimed at economically isolating Iran as posing less risk to supply than a military escalation. Also, the New York Times reported that the U.S. is preparing to return diplomats to embassies in the Middle East, signaling that Washington does not expect a resumption of a full-scale conflict with Iran. The drop in oil prices helped push Treasury yields lower, with the 10-year T-note yield falling three basis points to 4.67%.

Investors are now awaiting a fresh batch of U.S. economic data.

In yesterday's trading session, Wall Street's main stock indexes closed mostly lower. Chip and AI infrastructure stocks sank, with Seagate Technology Holdings (STX) sliding over -6% to lead losers in the S&P 500 and Nasdaq 100 and Micron Technology (MU) falling more than -5%. Also, energy stocks declined as oil prices fell, with Diamondback Energy (FANG) and Halliburton (HAL) dropping over -2%. In addition, Regenxbio (RGNX) cratered more than -24% after the FDA placed a clinical hold on its investigational gene therapy RGX-121 for Hunter syndrome. On the bullish side, Expedia Group (EXPE) rose over +5% and was the top percentage gainer on the S&P 500 after Evercore ISI raised its price target on the stock to $430 from $375.

U.S. President Donald Trump said on Monday that the U.S. would impose 50% tariffs on automobiles and auto parts imported from Canada starting in January, marking the latest escalation in a tit-for-tat trade conflict that flared up over the weekend. "On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%," Trump said on Truth Social. U.S. tariffs on Canadian automobiles currently stand at 25%, with discounts for U.S.-made content in vehicles, while tariffs on steel are set at 50%. Canada's government will announce its response to U.S. tariffs later today.