S&P500 and Nasdaq 100: Lower Yields Lift Futures Ahead of PCE and Nvidia

Lower Yields Lift Futures but the 30-Year Is Still Above 5%

U.S. stock futures are higher Tuesday morning. Nasdaq-100 futures are leading with a 1% advance. Lower Treasury yields overnight brought buyers back after Monday’s semiconductor-driven selling. The S&P 500 lost 0.28% Monday and the Nasdaq Composite dropped 0.76% while the Dow gained 0.26% on financials. The Nasdaq-100 lost the most Monday. It is recovering the most Tuesday.

The 30-year yield is lower early Tuesday. It is still above 5%. The S&P 500 held its 50-day moving average Monday and futures are building on that hold. Nvidia and PCE both arrive Wednesday. Warsh speaks at Jackson Hole Friday.

Dow futures rose 237 points, or 0.4%. S&P 500 futures gained 0.5%. Nasdaq-100 futures advanced 1%.

Daily September E-mini S&P 500 Index Futures Technical Analysis

September E-mini S&P 500 Index futures are edging higher early Tuesday as prices continue to straddle the former all-time high at 7693.75 while consolidating inside last Thursday’s wide range of 7657.75 to 7746.50.

The main trend is up according to the daily swing chart, but the minor trend is down. This is creating the downside momentum.

The minor range is 7838.50 to 7657.75. Its pivot at 7748.25 is the primary upside target controlling the price action. A sustained move through this level will shift momentum back to the upside.

A trade through 7657.75 will signal a resumption of the minor trend. This could lead to a test of the 50-day moving average at 7591.83 and the short-term 50% level at 7581.25. Watch for a technical bounce on the first test of this area.

Daily September E-mini Nasdaq-100 Index Futures Technical Analysis

September E-mini Nasdaq-100 Index futures are trading higher during the premarket session. The market is currently trading on the weak side of the 50-day moving average at 29492.38, making it resistance. Additional resistance is the intermediate 61.8% level at 29610.75 and the short-term 50% level at 29645.00.

On the downside, the early support is the intermediate 50% level at 29150.75. This is followed by yesterday’s low at 28946.75 and the short-term retracement zone at 28772.25 to 28401.50. The latter could be called a value zone.

Today’s direction is likely to be determined by trader reaction to 29150.75. A sustained move over this level will signal the presence of buyers. If this creates enough upside momentum, buyers may take a run at overcoming the resistance cluster at 29492.38 to 29645.00. A trade through 29645.00 will shift momentum to the upside.

If 29150.75 fails as support, we could see a quick test of 28946.75, but the next downside objective becomes the value zone at 28772.25 to 28401.50.

Daily September E-mini Dow Jones Industrial Average Futures Technical Analysis

September E-mini Dow futures are trading higher for a third straight session early Tuesday. The current rally is being fueled by another successful test of the 50-day moving average, currently at 52918.00. The new main bottom is 52812.

The main trend is up, but the minor trend is down. This is controlling the momentum. A trade through the minor pivot at 53848 will shift momentum to the upside. Trader reaction to 53848 could determine the direction of the market today.

The Buyback Trade Gave the Long Bond a Buyer, Not a Fix

The 10-year Treasury yield fell about 3 basis points early Tuesday to 4.67%. The 30-year dropped roughly 3 basis points to 5.20%. Treasury buyback expectations are driving the move. CNBC reported Monday that close to $1 trillion sitting in the General Account could fund expanded bond purchases. Treasury has already said it will at least double purchases of older long-dated debt from $2 billion to $4 billion per operation. Bessent said the amount could be larger.

The program is giving the long end a bid. Last week’s first buyback announcement produced a one-session drop in yields. Then the bond market pushed back. The 30-year hit a 19-year high. Tuesday’s lower yields are following the same pattern. How long this round of relief lasts matters more for stock futures than the direction of the premarket print.

U.S. debt is still growing. The supply of new bonds is not slowing down. Treasury added a buyer for older debt. It did not shrink the pipeline of new issuance that pushed long-term rates to these levels in the first place.

Wednesday’s Double Test Arrives With Chips Already Weakened

Nvidia reports after the close Wednesday. PCE inflation arrives before the opening bell. The chip group was the weakest part of Monday’s session. Sellers went after the AI trade specifically. The S&P 500 and Nasdaq dropped because of the semiconductor selloff, not because the broad market lost its bid. Nvidia’s earnings arrive with the group already backing up.

The company needs more than a routine beat. AI demand, data-center spending, and forward guidance all have to show acceleration. The bar is not just a number. The bar is conviction behind the guidance. A clean quarter with soft guidance does not help the chip group right now.

PCE lands first. The bond market moves on it before the stock market gets Nvidia’s report. Wednesday morning’s yield direction sets the stage before Nvidia opens the books.

Warsh speaks at Jackson Hole Friday after traders have had two days to absorb PCE and Nvidia. UBS forecasts S&P 500 earnings growth of 25% this year and 14% next year. The firm expects yields to come down as inflation moderates. The 30-year above 5% has not confirmed that view.

Stocks in the News

Bank of Montreal and Dick’s Sporting Goods report before the bell Tuesday. Intuit, Box, and Zoom report after the close.

Consumer confidence and new-home sales data arrive Tuesday morning. Both numbers offer a read on spending and demand before PCE hits Wednesday.

Overseas markets are supporting the tone. Japan’s Nikkei gained 0.5% and South Korea’s Kospi rose 0.68%. Europe’s Stoxx 600 added about 0.3%. China’s CSI 300 fell 0.24%.

What to Watch

Lower yields brought buyers back to futures Tuesday. Wednesday decides whether the bid holds. PCE lands before the bell. Nvidia reports after the close. Warsh wraps the week at Jackson Hole Friday. The 30-year is still above 5%. The futures are higher. The structural pressure on the long bond has not gone away.

The S&P 500 is straddling its former all-time high. The Nasdaq-100 is trading below its 50-day moving average, which makes it resistance heading into Wednesday. The Dow has held its 50-day and is working on a third straight session higher. The reaction to these levels into Nvidia’s report sets the near-term direction.

More Information in our Economic Calendar.