Why Are S&P 500, Nasdaq Futures Slipping While Dow Futures Are Climbing?

• The Kobeissi Letter said that the AI trade is becoming increasingly independent of the broader market.
• Later this week, investors will also be watching for Federal Reserve Chairman Kevin Warsh’s speech on Friday at the Fed’s annual symposium in Jackson Hole, Wyoming.
• U.S. Treasury yields moved lower on Tuesday amid recent reports that the Treasury could tap its nearly $1 trillion General Account to help fund an expanded government bond buyback program.

U.S. stock futures were edging lower in the overnight session late Tuesday as investors await results from Nvidia Corp. (NVDA), expected after the market closes on Wednesday. 

Dow futures climbed 0.04%, while the S&P 500 futures fell 0.08% and the Nasdaq-100 futures lost 0.19% at 10:58 PM EDT.  

On Tuesday, all three benchmark indexes closed higher. The Dow Jones Industrial Average gained 0.30% at close, while the S&P 500 and the Nasdaq Composite added 0.32% and 0.66%, respectively. 

Key US Market Drivers

Multiple catalysts await the U.S. markets this week, with results from chipmakers Nvidia and Marvell Technologies Inc. (MRVL) slated for release. 

Nvidia’s results are considered a bellwether for the broader market, as the company is the largest-weighted stock in the S&P 500 index.

The semiconductor industry posted higher gains on Tuesday ahead of the AI darling’s expected results. The VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) indexes each rose more than 1.5% at close. 

Meanwhile, The Kobeissi Letter said in a post on X on Tuesday that the AI trade is becoming increasingly independent of the broader market. “The 40-day correlation between the US Broad AI Index and the S&P 500 ex-AI Index is down to -0.60, the lowest on record. The correlation has now been negative since late June, marking only the 2nd negative reading on record after July 2024. This also marks a sharp reversal from the +0.65 positive correlation seen in mid-May.”

Later this week, investors will also be watching for Federal Reserve Chairman Kevin Warsh’s speech on Friday at the Fed’s annual symposium in Jackson Hole, Wyoming, seeking details on plans to stabilize long-term Treasury yields, as well as cues on its policy path. 

Meanwhile, U.S. Treasury yields moved lower on Tuesday amid recent reports that the Treasury could tap its nearly $1 trillion General Account to help fund an expanded government bond buyback program. The U.S. 30-year Treasury yield was down to 5.174% at the time of writing, while the U.S. 10-year Treasury yield fell to 4.641%. 

Stanley Druckenmiller, the American investor who mentored Treasury Secretary Scott Bessent in his early career, suggested in an opinion piece in The Wall Street Journal that the Treasury’s move to double long-dated bond buybacks to at least $4 billion per operation was a policy error. “The market’s verdict was swift and correct: This wasn’t liquidity management, it was price management—and a mistake far larger than $4 billion suggests,” he said. 

Coinciding with Nvidia’s quarterly release in July’s Personal Consumption Expenditures (PCE) index, expected on Wednesday. The print is considered the Fed’s preferred tool for measuring inflation and guiding interest rate policy. 

Meanwhile, oil prices declined on Tuesday. Brent crude futures expiring in October were down about 2.61%, trading at $86.27 a barrel at the time of writing. Meanwhile, WTI crude futures expiring in October were trading at $80.27 per barrel.

Trending Stocks To Watch 

NVIDIA Corp. (NVDA): The chipmaker topped the list of trending stocks on Stocktwits ahead of its second-quarter (Q2) results on Wednesday after ending the session more than 2% higher. 

Dicks Sporting Goods, Inc. (DKS): The company jumped onto the retail radar as it heads for its worst month in more than six years over growing concerns over athletic footwear demand, prompting analysts to lower price targets after Q2 results amid weaker trends and Foot Locker acquisition uncertainty.

Intuit Inc. (INTU): The fintech company plunged more than 10% after hours following its fourth-quarter (Q4) earnings results as weaker-than-expected 2027 guidance weighed heavily on investor sentiment. 

Critical Metals Corp. (CRML): The mining company’s shares surged about 21% at close on Tuesday as optimism across rare-earth and critical-minerals stocks intensified following the Trump administration’s $1.55 billion funding package to strengthen U.S. supply chains and reduce reliance on China. 

Other Market Trends 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ) edged lower at the time of writing, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) was trading in the green. 

The iShares 20+ Year Treasury Bond ETF (TLT) was down 0.14% amid ‘bullish’ sentiment.

Asian markets were trading mixed at the open on Wednesday. South Korea's KOSPI, China’s SSE Composite and Japan’s Nikkei 225 were all trading higher at the time of writing, while Australian stocks were trading lower. 

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