S&P 500 futures were slightly in the red this morning as investors weighed higher oil prices, rising bond yields and about a 50% chance of a September US rate hike. US stock futures were mixed, with Dow futures modestly higher.
Oil prices climbed on tensions in the Strait of Hormuz, while UK government bond yields moved above 4.8%. The ISM Services PMI at 54.0 showed the economy was still expanding, but the latest jobs and services figures also left markets pricing a September US rate hike at roughly 50%.
Cloudflare and Occidental Petroleum
Individual stocks moved hard in the same session. Cloudflare jumped 8.60% after Scotiabank upgraded the stock to Outperform with a higher price target, and Occidental Petroleum climbed 5.88%.
Rivian Automotive fell 18.12% after completing a US$1.16b follow on equity offering, and Rocket Lab dropped 10.40%. Those moves gave traders a split picture: gains in some names tied to upgrades and energy strength, while capital-raising pressure hit others.
PepsiCo and Delta Air Lines
Attention stayed on the next earnings updates. PepsiCo was scheduled to report Q2 results on Thursday, and Delta Air Lines was scheduled to post Q2 numbers on Friday. FOMC minutes were also part of the day’s focus, adding more context to the September policy debate.
For investors, the practical read is straightforward: rate-sensitive areas such as housing and utilities remain under pressure when yields climb, while financials and growth sectors like technology stay in focus as the market weighs whether the September US rate hike odds move higher or lower after the next Fed signals and earnings reports.
