U.S. equity futures traded around the unchanged line early Tuesday as investors prepared for a concentrated set of corporate earnings and monitored continued developments related to the Iran war. Contract activity reflected a cautious stance ahead of quarterly reports from a number of large technology firms whose results may influence the trajectory of heavy spending on artificial intelligence infrastructure.
By 02:43 ET (07:43 GMT), futures tied to the main U.S. benchmarks were moving in opposite directions: Dow futures were up 41 points, or 0.1%, S&P 500 futures were down 20 points, or 0.3%, and Nasdaq 100 futures were down 264 points, or 0.9%. The prior trading day on Wall Street closed with mixed outcomes. A sharp drop in oil prices and U.S. Treasury yields, driven by a pause in hostilities between the U.S. and Iran, provided support to stocks. Yet market participants continued to flag concerns about a potential energy-driven inflation spike and the possibility of a hawkish turn in Federal Reserve policy.
Investor attention is also focused on the sustainability of large-scale investments into AI-related capacity. Several technology heavyweights are scheduled to report quarterly earnings on Wednesday and Thursday - results that may serve as a test of the market's assumptions about continued AI spending. Nvidia shares fell after reports suggested the AI chipmaker might offer a financial backstop of roughly $250 billion to support a major OpenAI data center initiative. In addition, a high-profile debut from Chinese memory chip maker CXMT and reports that Apple has pressed the Trump administration for permission to use Chinese chips in some products intensified competitive concerns for U.S. chipmakers.
The Philadelphia Semiconductor Index, which tracks the chip industry, declined 2.2%. The Wall Street Journal reported that, for the first time since April 2025, every stock in that index closed below its 50-day moving average.
Earnings calendar and company-by-company focus
Corporate newsflow this week will be dominated by a steady stream of earnings. Before U.S. markets opened on Tuesday, Coca-Cola and Boeing were expected to draw investor scrutiny. How the Iran conflict has shaped guidance for consumer-facing firms such as Coca-Cola will be an area of particular interest, while Boeing's results and commentary could shed light on any progress in its turnaround efforts.
Later in the session, payments company Visa will report, with its results anticipated to offer a view into consumer spending patterns amid the backdrop of geopolitical uncertainty and its knock-on effects on economic confidence. Commentary from data-storage hardware provider Seagate Technology may also provide useful information about demand trends in areas that have benefited from AI-related investment.
The week’s marquee reports will come from the major AI-focused technology companies: Microsoft, Meta Platforms, Apple and Amazon. These corporations, often labeled hyperscalers, have publicly outlined plans for multibillion-dollar investments in data centers and chips to support AI systems. Market participants will be looking to those reports for evidence either reinforcing or questioning the scale and sustainability of such expenditures.
Federal Reserve meeting begins
Beyond earnings, all eyes will be on the Federal Reserve as it starts a two-day policy meeting on Tuesday. Policymakers face what analysts in market commentary have described as unusual uncertainty regarding the correct path for interest rates. June inflation data came in softer than expected, but intermittent fighting in the Middle East and swings in oil prices have kept the prospect of persistent price pressures on the table.
At the same time, the labor market has shown signs of resilience characterized by low hiring levels but also muted layoffs. In principle, central bank interest-rate increases can help restrain inflation, albeit with the trade-off that higher borrowing costs risk slowing economic activity and the labor market.
Market pricing, as reflected by the CME FedWatch tool, placed approximately a two-in-three chance that the Fed will hold its policy rate steady in the 3.5% to 3.75% range. There remained about a one-in-three probability that policymakers would opt for a 25-basis-point increase.
High-level diplomacy as conflict remains paused
President Donald Trump is scheduled to host Israeli Prime Minister Benjamin Netanyahu at the White House on Wednesday. The meeting comes as the U.S. and Israel maintain a pause in their joint campaign against Iran, which began in late February and has lasted into a now six-month-old operation that has unsettled global financial markets and raised concerns about a widening regional conflict.
Relations between the two leaders have experienced strains. A contentious phone conversation in June highlighted differences over Israeli strikes on targets linked to Iran-backed Hezbollah in Lebanon. Reuters reported that Netanyahu may be seeking to repair ties with Trump and to court the president's support ahead of a pivotal vote in October.
Despite the pause in current bombardments, there was no clear sign of an end to the broader conflict. President Trump said on Monday that U.S. negotiators were engaged in "good talks" with Tehran and suggested a new ceasefire agreement was possible, while also warning that strikes could resume if negotiations faltered.
Asia chip rout and trade frictions
Asian markets endured significant pressure, led by a sharp drop on South Korea’s KOSPI. The index plunged more than 10% to close at 6,023.66 points. The sell-off was concentrated in chipmakers, which bore the brunt of losses as investors questioned elevated AI-driven valuations and heightened capital spending in the sector.
SK Hynix and Samsung Electronics were among the heaviest decliners, falling 14.65% and 13.39%, respectively. Both companies have been large beneficiaries of the surge in demand for memory chips tied to AI workloads over the past year.
Export-oriented sectors were also unsettled after the U.S. announced a new 12.5% tariff on South Korea and several other countries. Seoul later said the U.S. had agreed to honor an earlier trade deal that would cap tariffs on the country at 15%.
What to watch
- How earnings from the big technology firms affect investor confidence in the scale and durability of AI-related investment.
- Signals from the Federal Reserve on the path of interest rates in the face of mixed inflation data and geopolitical risks to energy prices.
- Developments in U.S.-Iran negotiations and the political outcome of the Trump-Netanyahu meeting, given the potential market sensitivity to changes in the conflict.
- Further ripple effects in Asian markets from chip-sector volatility and the consequences of recent U.S. tariff actions.
Investors will be parsing earnings releases, central bank guidance, diplomatic developments, and trade policy announcements in the coming days as they seek to gauge the balance of growth, inflation, and geopolitical risk across global markets.