December S&P 500 E-Mini futures (ESZ26) are up +0.05%, and December Nasdaq 100 E-Mini futures (NQZ26) are down -0.02% this morning, signaling a subdued open on Wall Street as chipmakers took a breather after yesterday’s rally, while investors monitored diplomatic efforts to end the U.S.-Iran war.
WTI crude erased earlier gains and dropped about -2% on Tuesday after Japan’s Kyodo News Agency reported that Iran proposed reopening the Strait of Hormuz within seven days if the U.S. blockade is lifted. The report said Iran was seeking to break a prolonged deadlock in the conflict and that the proposal would serve as the basis for talks with mediating countries at the United Nations General Assembly. U.S. President Donald Trump is scheduled to address the UNGA later today, with traders focused on a potential meeting with his Iranian counterpart that could mark a key turning point.
Treasuries rose across the curve as lower oil prices eased inflation concerns. The 10-year T-note yield fell 2.5 basis points to 4.93%.
However, another drop in oil prices and bond yields failed to spark further gains in chipmakers. Advanced Micro Devices (AMD), Arm Holdings (ARM), and Marvell Technology (MRVL) each slipped about -1% in pre-market trading, giving back some ground after sharp gains in the previous session.
Market participants are also looking ahead to remarks from Federal Reserve officials.
In yesterday’s trading session, Wall Street’s main stock indexes closed sharply higher, boosted by strong gains in the tech sector and lower oil prices. Meta Platforms (META) jumped over +11% after the app for its personal AI agent, Muse, climbed to No. 1 in Apple’s App Store. Also, chip stocks rallied as early signs of success for Meta’s Muse fueled optimism about the sector, with Arm Holdings (ARM) soaring over +17% to lead gainers in the Nasdaq 100 and Intel (INTC) surging more than +12%. In addition, Warner Bros. Discovery (WBD) climbed over +10% after Bloomberg reported that Paramount Skydance reached a settlement with California and other states seeking to block its proposed acquisition of Warner. On the bearish side, energy stocks slid as oil prices fell, with Marathon Petroleum (MPC) falling over -5% to lead losers in the S&P 500 and Valero Energy (VLO) dropping more than -4%.
Chicago Fed President Austan Goolsbee cautioned on Monday at an event in London that the U.S. central bank cannot overlook repeated and persistent supply shocks and must respond in a way that could cause economic hardship. In comments to reporters following his speech, Goolsbee added that if price pressures are also being driven by overheating demand, the Fed’s median projection for one more rate hike may not be sufficient to restore price stability. Separately, St. Louis Fed President Alberto Musalem said in an interview with Reuters, “Both persistent demand and recurring supply forces are continuing to contribute to keeping inflation risks elevated, and I judge that without further policy restraint on inflation it is more likely to be substantially above our 2% target in 18 months than at target.”
Meanwhile, U.S. rate futures have priced in a 50.9% chance of a 25-basis-point rate hike and a 49.1% chance of no rate change at the conclusion of the Fed’s October meeting.
Today, market participants will hear perspectives from Fed Vice Chair Philip Jefferson, New York Fed President John Williams, and Richmond Fed President Tom Barkin.
On the economic data front, investors will focus on the Richmond Fed manufacturing index, which is set to be released in a couple of hours. Economists expect the index to come in at 2 in September, down from 4 in August.
On the earnings front, auto parts retailer AutoZone (AZO) is scheduled to report its FQ4 results today.
Later in the week, attention will turn to U.S. President Donald Trump’s meeting with Chinese leader Xi Jinping. Chinese and U.S. officials concluded a second day of talks in New York on Monday focused on AI, investment, and trade as they worked to make progress ahead of Xi’s visit to the U.S. Trump is set to host Xi at the White House on Thursday for a reciprocal visit following their May summit in Beijing.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.93%, down -0.50%.
The Euro Stoxx 50 Index is up +0.41% this morning, recovering from earlier losses as sentiment improved after oil prices turned lower. Retail stocks outperformed on Tuesday, led by a more than +8% gain in Kingfisher Plc (KGF.LN) after the home improvement retailer raised its full-year adjusted pretax profit guidance. Technology stocks also climbed. At the same time, insurance stocks slumped, limiting the broader market’s gains. Meanwhile, Eurozone government bonds advanced as the reversal in oil prices eased concerns about the inflationary impact of elevated energy costs. Elsewhere, Reuters reported on Tuesday that Germany’s leading economic institutes upgraded their growth forecasts for Europe’s largest economy to 1.3% from 0.6% for 2026 and to 1.1% from 0.9% for 2027. Investor attention now shifts to the Eurozone’s preliminary consumer confidence data for September, due later in the session. In other corporate news, Smiths Group (SMIN.LN) climbed more than +5% after the U.K. industrial-engineering company reported better-than-expected annual results and forecast faster top-line growth for the year ahead.
China’s Shanghai Composite Index (SHCOMP) closed up +0.06%, while Japan’s financial markets were closed for a national holiday.
China’s Shanghai Composite Index closed just above the flatline today as investors largely held positions steady ahead of the high-profile summit between U.S. President Donald Trump and Chinese leader Xi Jinping. AI-related stocks outperformed on Tuesday after U.S. and Chinese officials agreed to continue discussions on AI safety. U.S. Treasury Secretary Scott Bessent said on Monday that senior officials from the two countries will meet again in Shenzhen in about two months to discuss AI-related risks and communication protocols for potential safety incidents. Bessent also struck an upbeat tone on U.S.-China trade relations ahead of the Trump-Xi summit later this week. Meanwhile, China added two chemicals to its drug-precursor export control list on Tuesday, requiring permits for shipments to the U.S., Mexico, and Canada, a move that added to the positive tone surrounding the Trump-Xi summit. In corporate news, Tencent Holdings rose over +5% in Hong Kong after the tech giant rolled out its latest and most advanced image-generation model. Also, Alibaba Group gained nearly +2% in Hong Kong after the company introduced its latest AI chip, the Zhenwu V900, and announced plans for a larger AI model.
Japan’s Nikkei 225 Stock Index was closed today in observance of Citizen’s Holiday (Kokumin no Kyujitsu). Japanese financial markets were also closed on Monday for the Respect for the Aged Day holiday and will remain closed on Wednesday for the Autumnal Equinox holiday. Under Japan’s Act on National Holidays, any weekday falling between two national holidays is designated a public holiday.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks retreated in pre-market trading, giving back some ground after sharp gains in the previous session. Advanced Micro Devices (AMD), Arm Holdings (ARM), and Marvell Technology (MRVL) each slipped about -1%.
Software stocks advanced in pre-market trading, with ServiceNow (NOW) and Salesforce (CRM) rising more than +1%.
Vicor Corporation (VICR) jumped over +10% in pre-market trading after the power components maker raised its Q3 revenue growth guidance, driven by royalties from a new licensing agreement.
GameStop (GME) gained more than +3% in pre-market trading after a regulatory filing showed that CEO Ryan Cohen bought 1.15 million shares of the company.
MetLife (MET) advanced about +1% in pre-market trading after Piper Sandler upgraded the stock to Overweight from Neutral with a price target of $110.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - September 22nd
AutoZone (AZO), THOR Industries (THO), KB Home (KBH), Worthington Enterprises (WOR), MillerKnoll (MLKN).
