US stock index futures fell on Tuesday as weakness in semiconductor shares added to concerns over inflation, elevated bond yields and the outlook for corporate earnings.
The decline came after technology shares led Wall Street lower on Monday, with investors reassessing the valuations of growth companies that have driven US benchmarks to record highs this year.
Chipmakers were under pressure before Nvidia’s earnings later this week, while traders also looked ahead to Walmart’s results and minutes from the Federal Reserve’s latest meeting.
Oil prices eased in Asian trading, though crude remained elevated as Middle East tensions continued to shape risk sentiment. Treasury yields also pulled back after a recent rise.
5 things to know before market opens
1. US futures slip as chip stocks fall
US stock futures were lower in overnight trade, led by weakness in technology and semiconductor shares.
Futures linked to the S&P 500 slipped 0.23%, while Nasdaq 100 contracts fell 0.46%, reflecting pressure on technology shares.
Dow Jones Industrial Average futures were down 65 points, or 0.13%.
2. Memory and storage shares weaken
The pressure was not limited to Nvidia. Memory and storage stocks that had rallied in recent weeks also declined.
Micron Technology fell 1%, Seagate Technology dropped 1.6% and Western Digital lost 2.3%.
The moves suggested investors were taking profits across the broader chip trade after a strong run.
Higher Treasury yields have also weighed on technology shares, as rising discount rates tend to reduce the value investors place on future earnings.
3. Oil falls but stays elevated
US crude futures fell 1.5% to $110.25 a barrel at 1233 GMT, after US President Donald Trump said he had delayed a planned military strike against Iran because of ongoing negotiations.
Brent also declined 1.5% but remained above $110 a barrel.
Energy prices remain a key inflation risk for investors, particularly as geopolitical uncertainty keeps supply concerns in focus.
4. Treasury yields ease after recent spike
The 10-year Treasury yield eased to 4.587%, down 5.4 basis points on the day. It had earlier touched 4.618%, its highest level since February 2025.
Risk appetite remained fragile on Tuesday as investors assessed the economic and geopolitical impact of the Middle East conflict.
Market sentiment was also weighed down by growing frustration over the lack of meaningful progress in negotiations between the US and Iran, adding to uncertainty across global markets.
5. Fed minutes and earnings are next
Investors will watch Wednesday’s Federal Reserve minutes for signs of how much support there was for moving towards a neutral stance and away from an easing bias.
Markets are also focused on heavyweight earnings. Nvidia reports on Wednesday, with investors looking for proof that AI demand can justify high valuations.
Walmart’s results may offer a clearer view of how US consumers are coping with higher energy costs and broader inflation pressures.
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