U.S. stock index futures traded higher after recovering from overnight losses, with the move driven largely by softer crude oil prices and a corresponding decline in Treasury yields. Investors also weighed a mix of corporate earnings signals and economic data, including an ADP employment report that pointed to a slightly weaker labor market.
Key takeaways
- Index direction: The S&P 500 was up 0.16%, the Dow gained 0.42%, and the Nasdaq 100 fell 0.20%.
- Catalyst: Oil prices eased after comments from U.S. Energy Secretary Wright about more than 17 million barrels passing through the Strait of Hormuz, pulling bond yields lower.
- Rates impact: The 10-year Treasury yield fell about 1 basis point to 4.79%, supporting equities even as broader bond yields remained elevated globally.
- Stock-specific pressure: Cybersecurity shares weighed on the Nasdaq 100 after results from several firms diverged from expectations.
- Earnings backdrop: Expectations remain firm for strong second-quarter growth, with AI infrastructure highlighted as a key earnings driver.
What drove the move
Futures regained ground after crude oil slid from an overnight advance, which in turn helped reduce Treasury yields. Crude prices turned lower following remarks from U.S. Energy Secretary Wright that over 17 million barrels of oil went through the Strait of Hormuz on Monday, easing near-term supply concerns.
That shift mattered because rates sensitivity remains a primary driver of equity pricing. The 10-year Treasury yield declined roughly 1 basis point to 4.79%, described as supportive for stocks. Separately, the Aug ADP employment change increased by 38,000, rising less than expectations for 47,000, which also contributed to a more dovish read-through for Federal Reserve policy.
Market reaction and cross-asset signals
Despite the improved tone in U.S. futures, the rate environment remains a key headwind. The report said the broader global bond sell-off continued, lifting yields in several major markets. The UK 10-year gilt yield rose to a 19-year high of 5.29%, the German 10-year bund yield jumped to a 15-year high of 3.39%, and the Japanese 10-year JGB yield climbed to a 30-year high of 3.04%. In the U.S., the 10-year yield had previously reached a 2.75-year high of 4.82% during overnight trading before easing.
In economic releases, U.S. MBA mortgage applications rose 0.8% for the week ended Aug. 28. The purchase index increased 2.2%, while refinancing declined 1.1%. The average 30-year fixed-rate mortgage rose about 1 basis point to 6.79% from 6.78% the prior week, reflecting continued sensitivity to interest-rate expectations.
Overseas, trading was mixed to lower. The report said the Euro Stoxx 50 dropped to a one-month low, and China’s Shanghai Composite closed down 0.97%. Japan’s Nikkei-225 Stock Average fell to a four-week low, closing 2.85% lower.
Company updates behind today’s stock moves
In the U.S., weakness in cybersecurity stocks weighed on the Nasdaq 100, according to the report. Palo Alto Networks fell more than 8% after reporting Q4 subscription and support revenue of $2.67 billion, slightly below the consensus of $2.68 billion. CrowdStrike shares fell more than 3%, and other cybersecurity names including Cloudflare, SentinelOne, Fortinet, and Zscaler were down more than 2%.
Other earnings reactions varied by metric and guidance. Credo Technology dropped more than 16% despite reporting better-than-expected Q EPS, after the company failed to exceed its Q1 adjusted gross margin estimate of 68%. MongoDB fell more than 13% even with better-than-expected Q2 EPS, as Atlas revenue growth did not accelerate versus Q1.
On the upside, GitLab rose more than 14% after raising its 2027 revenue forecast to $1.13 billion from a prior range of $1.11 billion to $1.12 billion, above the $1.12 billion consensus cited in the report. Dell Technologies climbed more than 5% after reporting Q2 total net revenue of $46.97 billion and raising its 2027 revenue forecast to $192 billion. Johnson & Johnson gained more than 3% after UBS raised its price target to $320 from $280, according to the report.
Rates focus: Fed and ECB pricing
The report said markets are pricing a 63% chance of a 25 basis-point rate hike at the next FOMC meeting on Sept. 15–16. In Europe, it also reported expectations for the ECB to act sooner, with markets discounting a 99% chance of a 25 basis-point hike at the ECB’s Sept. 10 policy meeting.
Officials’ commentary reinforced the tightening expectations. The report said Bundesbank President Joachim Nagel warned that inflation is not close to the ECB’s medium-term target and referenced pricing of more than 95% probability for a rate increase at the September meeting. In the bond market, European government yields were moving higher on the day, consistent with that pricing.
In the U.S. Treasuries market, the report noted December 10-year T-notes were up about 2 ticks and the 10-year yield was down approximately 0.8 basis point to 4.790% after recovering from a 1.75-year nearest-futures low. Short covering was cited as part of the rebound, alongside the easing in crude and the less-than-expected ADP labor reading.
What to watch next
With oil and yields continuing to steer equity direction, investors will likely stay focused on further signals for inflation expectations and the path of central-bank policy. The report also pointed to a steady earnings calendar, with investors watching upcoming second-quarter results and guidance. Key near-term items to monitor include additional labor and inflation data, developments related to Middle East shipping and energy supply dynamics, and the next major policy decisions ahead of the Sept. 10 ECB meeting and the Sept. 15–16 FOMC meeting.
