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Briefing.com Summary:
*Oil prices are down nicely on reports of increased oil flows.
*Treasury yields have dropped in concert with other sovereign bond yields.
*NVIDIA and AMD are leading another move higher for the semiconductor stocks.
If you were told that oil prices are lower, Treasury yields are lower, and NVIDIA (NVDA) is up 1.1%, would you guess the equity futures market is up or down ahead of the opening bell? It is not a trick question, by the way.
Currently, the S&P 500 futures are up 34 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 178 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 277 points and are trading 0.4% above fair value.
Everything the market loves to see is lining up for it right now and setting a foundation for the S&P 500 to make a run at a new all-time high. The Nasdaq Composite and S&P 500 information technology sector are already in that vaunted territory after yesterday's trade.
The sightline to a higher open is fixed on WTI crude futures being down 2.3% to $87.33/bbl, the 10-yr note yield being down four basis points to 5.27% (it had been at 5.25%), and NVIDIA being up 1.1% as it extends its breakout to all-time highs.
Oil is down on several reports discussing increased oil flows out of the Strait of Hormuz and an important development that involves Saudi forces regaining control of the Red Sea port Mokha from Iranian-backed Houthis.
Treasury yields are lower in response to the drop in oil prices and in concert with sovereign bond yields that were relieved to hear French presidential candidate Marine Le Pen propose a big cut in government spending should her party win.
NVIDIA is up on breakout momentum, setting a nice tone for other semiconductor stocks. Relatedly, Adv. Micro Devices (AMD) is up 2.2% on a Reuters report that surging AI demand is driving a decision to increase supply in 2027. It is also being helped by Citi raising its price target on the stock to $800 from $575 due to increased CPU demand from agentic applications and Meta's (META) Muse AI in particular.
The only other question is, can this opening move be sustained? Whether that is a trick question or not may ultimately hinge on whether Treasury yields reverse course, as they have been prone to do, and take out yesterday's highs.
There is a $58 billion 3-yr note auction today. Results will be announced at 1:00 p.m. ET. There will also be a fair amount of Fedspeak. The lone economic release—the August Trade Balance report—was worse than expected.
The trade deficit widened in August to $105.6 billion (Briefing.com consensus: -$93.7 billion) from a downwardly revised $92.8 billion (from -$88.6 billion) in July. Exports were $4.5 billion more than July exports, but imports were $17.2 billion more than July imports.
The key takeaway is that demand for crude oil and semiconductors helped drive the increase in exports and imports and can be looked at in part as a good sign for global economic activity.
