TradingKey - On Thursday, August 20, Eastern Time, futures on the three major US stock indices fell across the board in pre-market trading. The US Department of the Treasury's expansion of long-term Treasury buybacks briefly eased bond market pressure, but buying momentum cooled down. Meanwhile, hawkish signals from the Federal Reserve's July meeting minutes and oil prices rising to near four-week highs capped further recovery in risk appetite. Bitcoin broke above $70,000, driving crypto-concept stocks higher in pre-market trading, while Nasdaq futures showed relative resilience.
As of press time, Dow futures were down 0.35%, S&P 500 futures dropped 0.12%, and Nasdaq 100 futures fell 0.24%.
Performance of the three major US stock index futures. Source: Investing
In commodities, international oil prices continued to rise, with WTI (USOIL) crude oil rising to around $86.7 and Brent crude climbing to near $94. A lack of progress in negotiations between the US and Iran and Trump's threat to launch larger-scale economic pressure on Iran continued to push up crude oil risk premiums related to Strait of Hormuz supply risks. Gold (XAUUSD) held above $4,480, supported by a weaker US dollar and a pullback in long-term US Treasury yields in the previous trading session.
In cryptocurrencies, Bitcoin (BTC) broke through the $70,000 mark, briefly rising to around $72,000. The US Treasury's expansion of bond buybacks improved liquidity expectations, while Trump urged Congress to advance crypto regulatory legislation, driving a surge in digital asset-related stocks in pre-market trading.
Market Moves
Alibaba (BABA) fell nearly 3% pre-market. The company reported an 8.6% year-over-year increase in quarterly revenue to RMB 268.95 billion, but net profit dropped sharply by about 76% year-over-year to RMB 10.54 billion, primarily affected by increased investment in AI infrastructure. Alibaba Cloud's external revenue grew 45%, but in the short term, the market is focusing more on the pressure rising AI capital expenditures place on profits and free cash flow.
Crypto-related stocks surged in pre-market trading. Strategy (MSTR) surged over 10% pre-market, Coinbase (COIN) gained over 7%, and Robinhood (HOOD) rose over 5%. After Bitcoin broke through $70,000, capital quickly flowed back into digital asset treasury companies, crypto trading platforms, and retail brokerages.
Moderna (MRNA) fell over 10% pre-market. Moderna surged 177% in the previous trading session following positive Phase III trial results for its personalized mRNA cancer therapy combined with Keytruda in melanoma, experiencing profit-taking in pre-market trading today.
AI chip stocks recovered slightly pre-market. Nvidia (NVDA) rose about 0.5% pre-market, AMD (AMD) gained about 0.5%, and Micron Technology (MU) advanced nearly 0.7%. After pressure from long-term U.S. Treasury yields eased, some capital flowed back into the AI hardware chain, but gains were limited, indicating that the market is still waiting for Nvidia's earnings report next week to further confirm the strength of AI demand.
Market News
The U.S. Treasury Department expands its long-term Treasury buyback scale. The U.S. Treasury announced that it will raise the upper limit for liquidity-support buyback operations of long-term nominal Treasuries maturing in 10 to 20 years and 20 to 30 years from $2 billion to at least $4 billion, effective between September 9 and November 4.
Minutes from the Fed's July meeting show growing internal division over rate hikes. The minutes showed that multiple officials believed further rate hikes might be necessary if inflation remains high. At the July meeting, the Fed voted 9-3 to keep interest rates unchanged at 3.50% to 3.75%, with three members favoring a 25-basis-point rate hike.
Trump threatens a new round of economic pressure on Iran. According to reports, Trump stated that he will launch large-scale economic actions against Iran and warned that countries conducting business with Iran could face consequences. With no clear progress in U.S.-Iran negotiations, navigation risks in the Strait of Hormuz remain in focus.
The U.S. releases initial jobless claims and Philadelphia Fed manufacturing data today. At 8:30 ET on August 20, the U.S. will release initial jobless claims for the week ending August 15 and the August Philadelphia Fed Manufacturing Index, as the market searches labor and manufacturing data for clues on the Fed's September policy path.
Key Data and Events Preview
At 8:30 ET on August 20, the U.S. released initial jobless claims for the week ending August 15.
At 8:30 ET on August 20, the U.S. released the Philadelphia Fed Manufacturing Index for August.
At 10:00 ET on August 20, the U.S. released the Conference Board Leading Economic Index for July.
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