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Briefing.com Summary:
*The equity futures market has responded to seesaw action in the oil market.
*NVIDIA has helped organize a $500 billion financing initiative for AI infrastructure buildouts across its ecosystem.
*The July Existing Home Sales report will be released at 10:00 a.m. ET.
The stock market turned a little bit sideways to start the week, redirected from its record-high path by rising oil prices and a wait-and-see stance in front of tomorrow's release of the July Consumer Price Index.
A similar disposition was seen this morning, as WTI crude futures topped $84.00 per barrel, responding to President Trump's pronouncement that the U.S., in turn, will demand reparations from Iran for all the damage it has done over the past 50 years. The synthesis of that view for the market was that a deal to fully reopen the Strait of Hormuz was apt to remain elusive.
However, WTI crude futures subsequently backed down to $82.00 per barrel on a well-timed report from Pakistan that the U.S-Iran situation is moving toward peace. We'll store that away in the "believe it when we see it" file. The oil market, nonetheless, seems to want to believe it, and that is what has turned the equity futures market from a little bit sideways to a little bit higher.
Currently, the S&P 500 futures are up 11 points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 100 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are up 54 points and are trading in line with fair value.
The Treasury market, which seems tethered to the path of oil prices, improved as oil prices dropped. The 2-yr note yield hit 4.26% overnight but is at 4.23% now, down one basis point. The 10-yr note yield, which hit 4.73% overnight, is at 4.69% now, down one basis point from yesterday's settlement.
There is a $58 billion, 3-yr note auction today. Results will be announced at 1:00 p.m. ET. With the July CPI report coming out tomorrow, it will be interesting to see what kind of demand there is at today's auction for these shorter-term securities.
Separately, from NVIDIA's (NVDA) standpoint, there shouldn't be any shortage of demand for AI compute. The AI leader has partnered with Apollo (APO), BlackRock (BLK), Blackstone (BX), Brookfield (BN), Goldman Sachs (GS), and KKR (KKR) to mobilize more than $500 billion of third-party capital over time for AI infrastructure buildouts across its ecosystem.
This is anything but more of the same, yet the market also recognizes that this capital hasn't been mobilized yet. Accordingly, its reaction to the news has been more tempered than one might expect. NVIDIA, though, is up 1.7% in pre-market trading, which is providing a boost for the equity futures market ahead of the open.
Following the open, market participants will be anxious to see if the market can retain a positive bias or if it turns a little bit sideways again. The direction of travel for oil prices will have some pull there, and so might the Existing Home Sales report for July (Briefing.com consensus: 4.07 million; prior 4.09 million) when it is released at 10:00 a.m. ET.
