S&P 500 futures fall 0.4% as Nvidia fails to sustain AI rally

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S&P 500 futures fall 0.4%

Highlights

S&P 500 futures fell about 0.4%.
Brent crude rose 2% and climbed above $107 a barrel.
The 2-year Treasury yield reached 4.1%, above the Fed’s target range of 3.50%-3.75%.
Nvidia’s strong report did not provide a new boost to the AI trade.

Hormuz weighs on risk assets again

According to Bloomberg, U.S. stocks lost part of their recovery momentum after a short rebound. S&P 500 futures fell about 0.4% as traders assessed whether hopes for a Middle East agreement would turn into real progress.

Oil reacted faster. Brent rose about 2% and climbed above $107 a barrel after reports that Iran’s supreme leader insisted the country must retain its uranium. That weakened optimism that the sides were moving closer to a deal that could reopen the Strait of Hormuz.

The issue for markets is not only oil itself. Hormuz remains one of the world’s most important routes for energy exports from the Persian Gulf. Any delay in talks keeps supply risks alive and supports prices, adding pressure to inflation expectations.

Nvidia did not rescue the market

Nvidia’s strong results helped Asian technology shares, but they failed to trigger a new wave of AI buying in the U.S. market. The company’s shares were little changed in premarket trading, even though the report confirmed strong demand for artificial intelligence chips.

Other corporate news added to investor caution. Intuit shares fell about 13% after the software company announced plans to cut roughly 17% of its workforce. Tesla rose around 1% after reports that Elon Musk’s SpaceX had filed for an initial public offering.

The contrast with Asia was clear. Technology stocks in the region advanced strongly, supported by demand for chips and AI infrastructure. But in the U.S., investors appeared less willing to chase the trade further while oil and yields were moving higher.

Rates become the main constraint

The bond market is sending a tougher signal to the Federal Reserve. The yield on 2-year Treasury notes, often seen as a guide to expectations for Fed policy, rose to 4.1%. That is notably above the Fed’s current target range of 3.50%-3.75%.

The 10-year Treasury yield nearly reached 4.7% before easing, reflecting investor concern that inflation may stay elevated as the Iran war keeps energy prices high. JPMorgan Chase CEO Jamie Dimon also warned that yields could rise much further from current levels if inflation pressure and capital shortages persist.

For equities, that creates a harder environment. Higher yields make future earnings less attractive, raise borrowing costs and weigh on companies that depend heavily on debt financing. As long as oil stays above $100 and Treasury yields remain elevated, the stock market will struggle to rely only on strong technology earnings.

We also reported Nvidia beats forecasts, but investors question growth pace.

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