U.S. stock futures traded higher on Tuesday, with contracts tied to the Dow Jones, S&P 500 and Nasdaq 100 all pointing to gains after the major averages closed higher on Monday. Nothing dramatic, but a green screen is a green screen.
The bigger story, though, is overseas. Iran's economic crisis escalated as Oil Minister Mohsen Paknejad resigned amid allegations involving $2 billion in missing oil revenue, while the Iranian rial hit record lows under heavy U.S. sanctions and a naval blockade. Treasury Secretary Scott Bessent reaffirmed that the U.S. pressure campaign will continue until Tehran stops financing terrorism and halts its nuclear ambitions. That is about as clear as a policy message gets.
Meanwhile, President Donald Trump blamed rising U.S. gas prices on Ukrainian attacks on Russian refineries and Democratic-led refinery closures. Political activist Garry Kasparov countered that prices actually spiked following U.S. actions against Iran. The debate comes as national average fuel prices continue to climb alongside severe disruptions to global energy supply chains. Everyone has a theory about why you're paying more at the pump. The pump does not care.
On the bond side, the 10-year Treasury yielded 5.28%, and the 2-year Treasury bond yielded 4.81%, at the last check. The CME Group's FedWatch tool projections show markets pricing in a 21.6% likelihood of the Federal Reserve hiking interest rates after its October meeting. So the base case is still a pause, but a hike is not exactly a rounding error either.
The SPDR S&P 500 ETF Trust (NYSE: SPY) and the Invesco QQQ Trust ETF (NASDAQ: QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Tuesday. The SPY rose by 0.24% at $776.67, while the QQQ advanced 0.23% to $757.95.
Evolution Metals & Technologies
- Evolution Metals & Technologies Corp. (NASDAQ: EMAT) rose 2.19% in Tuesday premarket after it filed a prospectus to offer and sell up to 5,400,000 shares of common stock by selling shareholders.
- MarketDash's Edge Stock Rankings indicate that EMAT maintains a weak price trend in the long, short, and medium terms.
Armada Acquisition
- Armada Acquisition Corp. II (NASDAQ: XRPN) plunged 34% in Tuesday premarket after it recently announced its shareholders approved the proposed business combination with Evernorth Holdings.
- MarketDash's Edge Stock Rankings indicate that XRPN maintains a strong price trend in the short, long, and medium terms.
Vaxcyte
- Vaxcyte Inc. (NASDAQ: PCVX) dropped 3.82% in Tuesday premarket after it jumped over 30% on Monday following the company's announcement of topline results from the OPUS-1 pivotal adult Phase 3 trial.
- MarketDash's Edge Stock Rankings indicate that PCVX maintains a strong price trend in the short, long, and medium terms.
Constellation Brands
- Constellation Brands Inc. (NYSE: STZ) advanced 0.13% in the premarket session as analysts expect it to report quarterly earnings of $3.57 per share on revenue of $2.54 billion after the closing bell.
- MarketDash's Edge Stock Rankings indicate that STZ maintains a weak price trend in the long, short, and medium terms, with a good growth score.
Cues From Last Session
Materials led gains on Monday while Real Estate was the sole declining sector, with all other groups—including Communication Services, Energy, Health Care, Financials, Information Technology, Consumer Staples, Utilities, Consumer Discretionary, and Industrials—finishing in positive territory. That is a lot of green. Almost suspiciously so.
Insights From Analysts
Wharton economist Jeremy Siegel expects the U.S. stock market to continue climbing despite valuation headwinds, supported by an accommodating Federal Reserve and unprecedented earnings momentum.
Following softer headline employment data, Siegel believes the labor market is merely cooling off rather than collapsing. He noted that this gives policymakers room to pause interest rate hikes, observing, "This is not a labor market falling apart. It is a labor market cooling enough to reduce some of the pressure on the Federal Reserve."
While surging long-term real bond yields present valuation constraints and narrow the equity risk premium, Siegel remains optimistic about corporate growth. He points to massive capital investments in artificial intelligence and robust balance sheets as the primary growth drivers, emphasizing that "exceptionally strong earnings expectations—particularly around technology and AI—continue to overwhelm that headwind."
Large-cap growth companies, in particular, remain well-positioned to navigate higher financing costs given their expansive operating margins.
Ultimately, Siegel views the economic backdrop constructively, concluding, "The rise in real yields deserves close attention, but for now the message from the market itself is clear: earnings growth is winning the battle."
Upcoming Economic Data
Here's what investors will be keeping an eye on Tuesday.
- August's U.S. trade balance data will be released by 8:30 a.m. ET.
- Dallas Fed President Lorie Logan will participate in a Global Perspectives event at 6:00 p.m. ET.
Commodities, Crypto, And Global Equity Markets
Crude Oil WTI futures were trading lower in the early New York session by 1.62% to hover around $87.98 per barrel.
Gold Spot US Dollar rose 0.28% to hover around $4,152.19 per ounce. The U.S. Dollar Index spot was 0.16% lower at the 102.0050 level.
Meanwhile, Bitcoin (CRYPTO: BTC) was trading 0.30% lower at $85,973.71 per coin over the last 24 hours.
Asian markets traded mostly higher on Tuesday, taking cues from a technology-led rally on Wall Street. Gains were led by Hong Kong's Hang Seng Index and Japan's Nikkei 225, alongside advances in Australia's S&P/ASX 200 and India's Nifty 50. Bucking the broader regional trend, South Korea's Kospi slipped lower after surrendering early gains due to heavy foreign selling in major semiconductor heavyweights.
Stock markets in mainland China remain closed for the week for the Golden Week holiday. European markets were mostly higher in early trading.
