US stock futures steady after tech slump; investors focus on Middle East tensions

In other stocks, Estee Lauder jumped 6.8% after the cosmetics maker forecast annual profit above Wall Street estimates. U.S. stock index futures were stable on Wednesday following a technology-driven selloff that rocked Wall Street in the prior session as investors turned their attention to the inflation outlook and geopolitical tensions in the Middle East. U.S. President Donald Trump said on Tuesday no talks were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran's assertion that the critical waterway remained shut to shipping. The continued uncertainty sent Brent crude futures up 1.1%, their highest level in three weeks. Yields on global government bonds hit multi-decade highs in the previous session as concerns over ballooning government debt and geopolitics rocked the bond market, raising borrowing costs for companies and households and complicating policymaking. The yield on the 30-year Treasury bond held steady at 5.28%, holding close to its highest level since 2007. The benchmark 10-year maturity backed off from its highest level since January 2025. Spiking yields hit U.S. technology stocks hard in the previous session, with heavyweights including Nvidia clocking sharp losses. Most megacap and growth stocks were muted in premarket trading on Wednesday. Semiconductor shares, which have had a tremendous run this year on hopes of insatiable AI demand, were also whipsawed on Tuesday, with the Philadelphia chips index falling close to 5%. Most chip-related stocks were trading slightly lower on Wednesday. Marvell and Intel lost more than 1% each. At 06:09 a.m. ET, Dow E-minis rose 11 points, or 0.02%, S&P 500 E-minis fell 3 points, or 0.04%, and Nasdaq 100 E-minis lost 66.25 points, or 0.22%. Earnings from top U.S. retailers are in focus this week, with Target and TJX Companies scheduled to report results before the bell. Retail giant Walmart is scheduled to report earnings on Thursday. Markets will also await the release of minutes from the Federal Reserve's July meeting later in the day for a clearer picture of the central bank's policy outlook. "A more hawkish internal debate could keep the expected policy path elevated, but contained inflation and an earnings yield already close to the Treasury yield should limit how far long rates can rise without causing a broader repricing of risk assets," said Florian Ielpo, head of macro and multi-asset portfolio manager at Lombard Odier Investment Managers. Traders currently see at least one 25-basis-point rate hike from the Fed by the end of 2026, according to data compiled by LSEG. The odds of a hike as soon as September, however, have decreased significantly following last week's tame inflation data. Robust earnings from several sectors including some AI hyperscalers were the key drivers lifting the S&P 500 and the Dow to record highs earlier this month, but doubts about whether hefty AI spending can yield tangible results soon linger.

US stock futures steady after tech slump; investors focus on Middle East tensions

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Futures and market backdrop

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Retail earnings and Fed outlook

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