Premarket Update: Nasdaq Futures Rise 0.8% as Oil Prices Decline

US stock futures advanced on Tuesday, while oil prices fell, as traders responded to a series of robust corporate earnings reports.

At the time of writing, Dow Jones futures were up 0.48%, S&P 500 futures gained 0.52%, and Nasdaq futures climbed 0.80%.

A broad decline in crude oil prices provided a lift to equity futures. West Texas Intermediate crude futures dropped 2%, trading above $103 per barrel, while Brent crude futures fell 1%, changing hands above $112 per barrel.

Although a US-Iran ceasefire remained fragile following new attacks in the Strait of Hormuz, the US Secretary of Defense stated on Tuesday that two US commercial vessels and a US destroyer had safely transited the strait, demonstrating that the passageway was open. Earlier in the week, the US President had indicated that the US would "guide" stranded vessels through the strait.

A batch of better-than-expected quarterly earnings further fueled the gains in stock futures. Shares of PFE rose approximately 2% in premarket trading after the company reported first-quarter profit and revenue that exceeded expectations and reaffirmed its full-year guidance. US-listed shares of Belgian brewer Anheuser-Busch InBev jumped 6%, buoyed by optimistic quarterly results.

However, PLTR was an exception. Despite first-quarter results that surpassed analyst forecasts, with revenue growing at its fastest pace since its 2020 IPO and an upward revision to its annual guidance, the stock fell 2%. Market concerns persisted that AI tools could negatively impact its software business. The company's revenue surged 85%, primarily driven by a significant increase in orders from US government and commercial clients.

Tuesday featured a heavy schedule of earnings reports, with several prominent companies affected by the Iran situation set to announce results, including Shopify (SHOP), PFE, Occidental Petroleum (OXY), and Ferrari (RACE).

Advanced Micro Devices (AMD) is scheduled to report earnings, offering a key signal for the chip sector that underpins the AI boom; Arm Holdings is set to disclose its results the following day.

On Monday, stocks declined after the United Arab Emirates reported that Iran had launched drones and missiles toward it, further deteriorating the already fragile US-Iran ceasefire.

Reports indicated that the US claimed to have sunk an Iranian vessel in the Strait of Hormuz. A US Navy Admiral stated on Monday afternoon that US forces had destroyed six small Iranian boats attempting to disrupt commercial shipping. However, Iranian state media denied that any vessels were sunk.

This news contributed to rising oil prices on Monday, which weighed on equity markets.

Despite the escalating Middle East tensions and Monday's market decline, Adam Crisafulli of Vital Knowledge maintained an optimistic outlook.

He stated, "We continue to believe the intention is to avoid a military escalation and to push the overall situation toward a negotiated settlement."

Goldman Sachs issued a warning: global oil inventories are nearing an eight-year low, with the rate of drawdown becoming a concern.

As conflict continues in the Middle East and the Strait of Hormuz remains blocked, the depletion rate of global crude and refined product inventories has accelerated. A recent Goldman Sachs report noted that global petroleum inventories have fallen to near their lowest level in eight years, cautioning that the pace of the inventory draw is becoming a worrying issue.

Goldman analysts estimate that global crude inventories currently equate to about 101 days of global demand and are projected to fall further to 98 days by the end of May. While overall global oil inventories are unlikely to fall to minimum operational alert levels this summer, the rapid drawdown in specific regions and for certain products, coupled with supply disruptions, has captured market attention.

Co-CEO of Oaktree Capital: Fundamental Risks Are Severely Underestimated.

Armen Panossian, Co-Chief Executive Officer of Oaktree Capital Management, warned that the market is pricing in a range of fundamental issues too quickly, prompting his firm to hold cash and wait for a more opportune time to adjust its positions.

Panossian pointed out that "extremely abundant" post-pandemic liquidity, a willingness to maintain market positions, and strong historical corporate performance have collectively led investors to selectively overlook potential negative economic data.

He suggested that a widespread belief that the US President will not take any actions that fundamentally harm the economy has further reinforced market resilience.

Panossian said, "When you layer on the impact of the Iran war, and then layer on the software sector pain we expect to materialize over the next few years, it becomes a bit puzzling why the market is so strong."

He cautioned that investors are underestimating the fundamental risks facing the credit market.

JPMorgan: Equity Market Breadth Set to Widen; Investors Should Continue Buying on Dips.

Strategists at JPMorgan stated that the global stock market rebound from the Iran war lows has been so narrowly driven that the market is primed for a broader rally triggered by even slightly positive news.

The team, led by Mislav Matejka, suggested that volatility is possible in the short term, but investors with a time horizon longer than the next few days or weeks should continue to use market declines to increase their exposure.

They noted that although the V-shaped recovery of the MSCI World Index might seem disconnected from soaring oil prices, the rally has been propelled by a small cohort of stocks. Investor positioning is lighter than before the war began, and as factors suppressing buying ease, this should support a broadening of the advance.

Matejka said in a client note, "Beneath the surface, equity markets are not that complacent." He cited, for example, that nearly all consumer stocks are hovering near their lows. Strong earnings will continue to support the market, and while US valuations appear elevated, international stocks look cheaper.

Focus Stocks Cryptocurrency-related stocks rallied collectively in premarket trading. Nabitti surged over 8%, Circle gained more than 6%, and CaliberCos advanced 5%. Coincheck Group, American Bitcoin, Cango, and GameSquare each rose over 4%, while Strategy increased more than 2%. Bitcoin broke through $81,000 during the day, reaching $81,343 per coin, its highest level since January 31.

Intel shares rose over 3% premarket following reports that Apple is considering a partnership with Intel to manufacture processors for its devices.

Coinbase shares advanced 4.2% premarket; the company plans to reduce its workforce by approximately 14%.

DuPont shares climbed 5.2% premarket after the company raised its profit and sales forecast for 2026.

Cryptocurrency exchange Bullish fell 4.8% premarket; it is reportedly planning to acquire Equiniti for $4.2 billion.

PLTR shares declined 2.6% premarket. First-quarter revenue was $1.63 billion, compared to analyst expectations of $1.54 billion.