Technology stocks led a decline in global equities, resulting in a risk-off start to a week packed with significant macro events and corporate earnings. Nasdaq 100 futures dropped 0.5%, and S&P 500 futures fell 0.1%. Chipmakers experienced a slide in US premarket trading, with major Asian tech companies like Alibaba Group Holding Ltd. and SoftBank Group Corp. also tumbling. In contrast, Europe's Stoxx 600, which has less exposure to the technology sector, remained relatively unchanged.
Oil prices dipped, with West Texas Intermediate crude falling 1.9% to $85.42 a barrel, snapping a six-day rally. This provided some relief to bond markets, as Treasury yields declined. The yield on 10-year Treasuries decreased by three basis points to 4.70%. Traders are closely monitoring the upcoming plan from Treasury Secretary Scott Bessent regarding the economic isolation of Iran, and the possibility of him utilizing the nearly $1 trillion Treasury General Account for bond buybacks. This week is also pivotal for asset markets, with Federal Reserve Chair Kevin Warsh scheduled to speak at Jackson Hole on Friday, an event that carries added weight due to concerns over expanding budget deficits and persistent inflation.
Investor focus this week will also be on Wednesday's release of the Fed's preferred inflation gauge, which will influence expectations for near-term interest rate decisions. Additionally, AI bellwether Nvidia Corp. is slated to report earnings on the same day, with options markets pricing in a 4.6% move following its results. Nvidia is seen as a key player in the global artificial intelligence landscape and is increasingly orchestrating funding for AI projects, leading Kathleen Brooks, research director at XTB, to remark that "Nvidia is now so powerful and cash-rich that it is almost like a central bank to the tech industry." Other companies reporting earnings include Salesforce Inc., CrowdStrike Holdings Inc., Dollar General Corp., Dollar Tree Inc., and Best Buy Co. Alibaba Group Holding Ltd. recently raised HK$80 billion ($10.2 billion) in Hong Kong’s largest secondary share sale to fund its AI ambitions.
