US Stock Futures Retreat Amid Chip Pressure Even As Oil Pulls Back On Iran Optimism: APLD, CAPR, NVDA, AMKR In Focus

U.S. futures declined in the overnight session late Monday as a heavy sell-off in semiconductor stocks weighed on the indexes, especially the Nasdaq.

Meanwhile, cooling geopolitical tensions led to a decline in oil prices at the start of Big Tech earnings week as markets look to earnings from four “Magnificent Seven” companies and the Federal Reserve’s July policy meeting.

Nasdaq-100 futures fell 0.67%, Dow futures were down 0.13%, and S&P 500 futures declined 0.26% at 9:20 PM EDT.

During the regular trading session, the Nasdaq  0.18% due to pressure from chip stocks, while the Dow and S&P 500 gained 0.51% and 0.02%, respectively.

What’s Driving US Markets?

Markets are largely focused on pivotal earnings from major hyperscalers this week, including , , Meta Platforms Inc. (META) and Microsoft Corp. (MSFT).

“We’re going to hear from all of the hyperscalers this week that are going to raise capex further. So those stocks might be under pressure,” Stephanie Link, chief investment strategist at Hightower, told CNBC. “That’s good as long as the hyperscalers are spending. That’s helping our economy.”

Investors will tune into hyperscaler capital spending plans closely, as concerns over heavy AI spending have weighed on investor sentiment.

Marta Norton, Chief Investment Strategist for Empower Investments, said in an interview with Schwab Network that capex will stay in focus and free cash flow will continue to evaporate. Norton added that "the market is going to punish" the “Magnificent Seven” companies reporting earnings this week.

Meanwhile, chip stocks posted sharp declines at the close on Monday amid reports that China had developed semiconductor machines that could threaten U.S. AI dominance.

Major chip stocks, including Nvidia Corp. (NVDA), Micron Technology Inc. (MU), and Advanced Micro Devices Inc. (AMD), ended the session in the red. The VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) lost more than 2% each.

Global oil prices retreated after the Trump administration said over the weekend that it had paused plans to intensify its conflict with Iran, reviving hopes for a peace agreement despite ongoing concerns over global energy supplies.

Brent crude futures expiring in September fell more than 0.70% to $87.73 a barrel. Meanwhile, WTI crude futures expiring in September were trading at $81.77 per barrel at the time of writing.

On the economic front, the most important event is the Federal Reserve’s July policy meeting later this week, with markets largely expecting the central bank to hold rates steady.

Meanwhile, U.S. President Donald Trump is calling on the Fed to lower interest rates, saying that there are “other countries that are paying less interest rates” than the U.S.

Trending Stocks To Watch 

Applied Digital Corp. (APLD): Shares of the data center operator jumped more than 3% in the overnight session after its fourth-quarter (Q4) revenue and earnings beat Street expectations and an order backlog of about $20 billion from a hyperscaler boosted sentiment.

Capricor Therapeutics Inc. (CAPR): Shares of the company plunged nearly 65% on Monday after the FDA released briefing documents ahead of an advisory committee meeting on its application for Deramiocel, a treatment for cardiomyopathy in Duchenne muscular dystrophy patients, and dampened expectations for approval.

Amkor Technology Inc. (AMKR): The semiconductor packaging and test services company posted second-quarter (Q2) results that beat analysts’ expectations, but shares declined more than 8% overnight as third-quarter (Q3) revenue guidance came in below expectations.

Nvidia Corp. (NVDA): The AI darling was on the retail radar amid the report on China’s development of chipmaking machines. Meanwhile, Apple Inc. (AAPL) overtook the chipmaker as the world’s most valuable company on Monday.

Other Market Trends 

Yields on the 10-year Treasury pulled back to 4.639%, while spot gold prices declined to $4,073.09 per ounce.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ), and the SPDR Dow Jones Industrial Average ETF Trust (DIA) all edged lower at the time of writing, with sentiment in the ‘bearish,’ ‘extremely bearish,’ and ‘neutral’ territories, respectively.

The iShares 20+ Year Treasury Bond ETF (TLT) was up 0.04% amid ‘bearish’ sentiment.

Asian markets were trading lower at the open on Monday. South Korea's KOSPI dropped the lowest, while Japan’s Nikkei 225, China’s SSE Composite and Australian stocks all declined at the time of writing.