U.S. equity futures edged upward on Monday as indications of de-escalation in the Middle East pressured oil prices and investors shifted focus to a busy week for profit announcements and economic indicators.
Market participants reacted to a report that Bristol Myers Squibb and AstraZeneca held preliminary merger talks that could create one of the world’s largest drugmakers valued at nearly $400 billion. Bristol Myers Squibb shares rose 8% in premarket trading, while AstraZeneca’s stock fell 6% in early activity.
On geopolitics, U.S. President Donald Trump said talks with Iran to reopen the Strait of Hormuz would take place sometime during the day but did not give a timeline for reaching an agreement. The comments corresponded with a notable slide in oil prices: Brent crude fell 5.7% to $83.77 a barrel. The decline in energy costs followed months of higher prices since the onset of the conflict, which had added uncertainty about the wider economic impact.
Interest-rate expectations also moved. The yield on the two-year U.S. Treasury note, which reflects short-term rate outlooks, fell four basis points to 4.291%.
After a week in which Big Tech results highlighted returns on AI investments, investors will be watching how other major names tied to artificial intelligence perform. SpaceX is scheduled to release its first quarterly report since its public debut on Tuesday, with particular scrutiny expected on the company’s AI spending and the revenue picture for its Starlink satellite communications business. Shares of the Elon Musk-backed firm, which have been trading below their offering price of $135 for nearly three weeks, inched up 0.3%.
Other AI-linked companies slated to report this week include Palantir, Advanced Micro Devices, and memory chipmakers such as SanDisk and Western Digital. Palantir was up 2.5% in early trade, while other names were largely little changed.
Micron Technology dipped 1.3% following a report that Chinese rival CXMT is considering building a second memory-chip plant in Beijing and has been in financing discussions with a government-backed tech manufacturing hub.
In futures markets at 5:29 a.m. ET, Dow E-minis were up 329 points, or 0.63%, S&P 500 E-minis were higher by 36.75 points, or 0.49%, and Nasdaq 100 E-minis were up 151 points, or 0.53%.
Wall Street finished a difficult July amid concerns about the path of AI deployment, interest-rate policy and a protracted Middle East conflict. Adding to the backdrop of uncertainty, Federal Reserve chair Kevin Warsh raised the possibility of reducing the number of regularly scheduled rate-setting meetings, according to a report, reflecting a broader discussion about curbing Fed guidance on rates. The CME Group’s FedWatch Tool showed traders are pricing in a 64% chance of a Fed interest-rate increase in September.
Earnings beyond the healthcare sector are also in focus this week, with results due from Eli Lilly, McDonald’s and Occidental Petroleum among others. The energy, consumer and healthcare sectors may see heightened activity as those reports arrive.
The economic calendar contains multiple labor-market releases, capped by the official non-farm payrolls report on Friday. A business activity survey due later in the day will give markets a more complete read on manufacturing-sector conditions in July.
Market participants additionally monitored potential U.S.-Japan intervention to support the yen after its recent slide. Overall, the start of the week featured a mix of geopolitical developments, sector-specific corporate moves and macro data that together set the stage for a consequential stretch of trading.