Why Nasdaq, S&P 500, Dow Futures Are Edging Lower Overnight After Markets Closed Up Last Week

• On the geopolitical front, the uncertainty around the U.S. and Iran’s likelihood of reaching a deal soon has also been weighing on markets. 
• Global oil prices were climbing higher at the time of writing. 
• Markets will be watching for July’s consumer price index (CPI) and producer price index (PPI) slated for later this week.

U.S. stock futures were trading lower in the overnight session late Sunday amid ongoing uncertainty over a deal between the U.S. and Iran, even as strong corporate earnings over the past week have bolstered markets higher. 

Markets will be watching for July’s consumer price index (CPI) and producer price index (PPI) slated for later this week for clues on inflation and insights into the Federal Reserve’s next monetary policy move. 

Dow futures were down 0.19%, S&P 500 futures fell 0.10%, while Nasdaq-100 futures edged 0.03% at 08:54 PM EDT.  

U.S. stocks closed higher on Friday, with the S&P clocking another​ record high, ending the session 0.62% higher. The Dow and Nasdaq also climbed 0.28% and 1.30% up at close.

All three benchmark indexes closed the week higher, notching best gains since April. The Dow closed nearly 3% up, while the S&P 500 added 3.58% at close and the Nasdaq ended the week more than 5% higher.

Chief Market Strategist at Creative Planning Charlie Bilello said in a post on X on Sunday, “S&P 500 Q2 earnings are on pace to rise 50% YoY, the highest growth rate since Q2 2021. We've never seen earnings growth this high outside of post-recessionary rebounds. This is an unprecedented boom fueled by massive EPS gains in big tech, including markups in SpaceX/Anthropic.”

What’s Driving US Markets?

Last week, U.S. markets largely reacted to strong earnings from marquee names and July nonfarm payrolls report that released on Friday, which clocked a surprise contraction in jobs even as unemployment rates came in lower than expected. 

The economy reported a decline of 23,000 jobs versus an expectation of 83,000 forecast by Dow Jones economists. Unemployment rates came in at 4.1% versus an expectation of 4.2%.

The unexpected contraction stoked market hopes that the Federal Reserve would likely hold off on hiking interest rates in September. According to the CME FedWatch tool, markets are now predicting a probability of about 44% that the central bank will hike rates at its next meeting, down from 67% a week ago. 

“The stock market is likely to welcome the dovish implications of the [jobs] report,” Peter Graf, investing chief at Amova Asset Management Americas, told CNBC. But he added that “investors should be wary of the future growth potential of an economy where fewer people are working.”

On the geopolitical front, the uncertainty around the U.S. and Iran’s likelihood of reaching a deal soon has also been weighing on markets. 

Last week, U.S. Treasury Secretary Scott Bessent indicated that a deal to reopen the Strait of Hormuz could be close. However, U.S. President Donald Trump reportedly told Axios over the weekend that the U.S. was “only semi-negotiating” with Iran and intends to continue exerting economic pressure on the country.

Meanwhile, according to the Islamic Republic News Agency, Iranian Foreign Minister Abbas Araghchi has said that Tehran is not currently negotiating with the U.S. and will not resume talks until the Trump administration ends what Iran considers violations of its commitments and provides compensation for those breaches. 

Brett Erickson, managing principal at Obsidian Risk Advisors, said in a post on X that the longer the U.S.’s blockade against Iran lasts, the more its economy suffers, raising its demands for concessions and making it harder for Trump to end the war and “the greater the risks of extreme escalation become.”

Global oil prices were climbing at the time of writing. Brent crude futures expiring in October were up more than 1% to $84.46 a barrel. Meanwhile, WTI crude futures expiring in September were trading at $78.88 per barrel, up about 0.9% at the time of writing. 

Trending Stocks To Watch 

Airbnb Inc. (ABNB): The property rental company was on the retail radar after its stellar quarterly performance sent shares more than 17% higher on Friday, its strongest climb on record. 

AXT Inc. (AXTI): Shares of the company garnered attention on the platform after they climbed sharply on Friday and continued its climb overnight as investors reacted to the semiconductor materials company’s stronger-than-expected second-quarter results and bullish third-quarter guidance.

Intuitive Machines Inc. (LUNR): The company’s stock was up more than 1% in overnight trading late Sunday as space stocks are back in vogue this month. Intuitive Machines is on track to assemble its third Nova-C lander for IM-3 and is also slated to report earnings later this week. 

Sellas Life Sciences (SLS): Shares of the late-stage clinical biopharmaceutical company surged nearly 20% last week amid growing investor excitement around its imminent, Phase 3 REGAL clinical trial data readout for its lead acute myeloid leukemia (AML) drug candidate, Galinpepimut-S (GPS). 

Other Market Trends 

Yields on the 10-year Treasury were at 4.664% at the time of writing, while spot gold prices declined to $4,331.16 per ounce. 

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

The iShares 20+ Year Treasury Bond ETF (TLT) was also down 0.31% amid ‘neutral’ sentiment.

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

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