U.S. stock futures slipped and Treasurys weakened as higher oil prices
dragged sentiment and investors returned from the Labor Day weekend.
Oil prices extended gains, with Brent crude now above $98 a barrel as escalating attacks in the Middle East fuel fears over prolonged supply disruptions.
"Markets are increasingly pricing a prolonged Mideast conflict," said Goldman Sachs. "The options-implied probability of Brent above $100 in March 2027 has risen from around 6% a month ago to about 25%."
Anxiety about higher energy prices is nudging bond yields higher, with the 10-year U.S. Treasury yield crossing 4.8% again.
In metals markets, copper extended recent gains to trade at a fresh record in London, as fears over potential U.S. tariffs and supply concerns combined to push three-month futures to $14,598.50 a metric ton.
Investors are also awaiting U.S. inflation data Friday which will set the stage for next week's Federal Reserve meeting.
The Fed's interest-rate decision on Sept. 16 "will come down to something of a coin toss as Fed officials balance the outlook between persistent price pressures (inflation) and making policy restrictive," First Abu Dhabi Bank said.
Market pricing underpins this view as money markets currently price in a 58% probability of a 25-basis-point hike against a 42% chance of unchanged rates, according to LSEG.
Stocks to watch
Amgen shed more than 5% premarket after the Swiss drugmaker Novartis said an experimental medicine failed to reduce cardiovascular risk in a late-stage clinical trial. Amgen and Eli Lilly are working on rival treatments. Novartis shares tumbled 10% in Europe, while Eli Lilly shares ticked down.
Bloom Energy is among the companies that will join the S&P 500 later this month, S&P Dow Jones Indices announced late Friday, sending its shares 4% higher premarket. Meanwhile, Nike will be deleted from the S&P 100. Its shares edged lower premarket.
Coinbase Global, Robinhood Markets, Strategy: Shares of companies tied to cryptocurrencies retreated in premarket trading as bitcoin's price slipped more than 1% to trade below $78,500.
GameStop is set to report earnings after markets close.
Watch For:
U.S. Employment Trends Index for August
Today's Top Headlines/Must Reads:
- Mistral AI Exceeds $24 Billion Valuation After Samsung-Led Investment Round
- See How Drones Are Infiltrating NATO Territory in Europe
- The Trillion-Dollar Bright Spot in China's Economy: Tourism
MARKET WRAPS Forex:
The dollar fell to a two-week low against a basket of currencies as strong gains for the Japanese yen continue.
Bonds:
Eurozone government bond yields were marginally lower, awaiting the European Central Bank's interest-rate decision and potential hints at the future policy path on Thursday.
Treasury yields edged lower in early trade as their trade resumes after Monday's Labor Day holiday, shrugging off a slight increase in oil prices.
Energy:
Front-month Brent crude oil futures rose to $99.2 a barrel, while front-month West Texas Intermediate crude oil futures climbed to $94.5 a barrel.
Metals:
Gold prices fell despite a weaker dollar, with investors now awaiting U.S. inflation data for more cues on the Federal Reserve's decision on interest rates.
Copper
Copper prices climbed to a fresh record on the London Metal Exchange as distortions to trade flows due to concerns over potential U.S. tariffs collided with supply challenges at key mines worldwide.
Iron ore
Iron ore prices were higher in early trade. Near-term demand is expected to improve as steel mills restock ahead of the holiday, said Baocheng Futures.
TODAY'S TOP HEADLINES
Mistral AI Exceeds $24 Billion Valuation After Samsung-Led Investment Round
Mistral AI completed a new funding round led by South Korea's Samsung Electronics that lifted its valuation above $24 billion, giving it additional firepower to invest in model development and grow its customer base.
The French artificial-intelligence startup said it had raised 3 billion euros, equivalent to $3.48 billion, from a pool of existing investors like Samsung and Dutch chip-equipment giant ASML Holding as well as new backers such as Advent, funds and accounts managed by BlackRock and the Grand Duchy of Luxembourg.
Novartis's Latest Trial Setback Sinks Stock
Novartis shares plunged after the Swiss drugmaker said an experimental neuromuscular medicine missed the primary goal in a late-stage clinical trial, the latest blow to its efforts to find new growth engines.
Shares in Novartis slid 10% shortly after the opening bell Tuesday, wiping out most of the stock's gains since the start of the year. If maintained until close, this would mark Novartis's worst one-day percentage drop since 1987, according to FactSet data.
EverBank to Combine With WaFd to Create $75 Billion Bank
Florida-based EverBank Financial has reached a deal to pursue a reverse merger with a smaller bank in the Pacific Northwest, WaFd, the companies said.
The deal would create a regional bank with some $75 billion in assets.
Robinhood Wins a New Role in the Oura IPO: Underwriter
Smart-ring maker Oura's IPO filing this week listed a surprise underwriter: Robinhood Markets.
It is the first official underwriting gig for Robinhood, the retail brokerage of meme-stock fame that has in recent years expanded its business well beyond equity and options trading.
Oil Nears $100 a Barrel as Fresh Attacks on Saudi Energy Operations Raise Supply Concerns
Oil prices climbed in early European trading Tuesday after attacks on energy-sector facilities in southern Saudi Arabia temporarily halted some operations, adding to concerns that Persian Gulf oil supplies could remain constrained.
Front-month Brent crude oil futures rose to $99.2 a barrel, while front-month West Texas Intermediate crude oil futures climbed to $94.5 a barrel.
ECB Set to Raise Key Rate Again, Signal Caution on Further Moves
The European Central Bank is expected to raise its key interest rate Thursday for the second time since the start of the war between the U.S. and Iran, but signal caution about further moves that would take borrowing costs to levels that restrain economic activity.
The eurozone's annual rate of inflation rose in August to 3.3%, the highest level in almost three years and well above the ECB's 2% target. However, there were no signs of the second-round effects that policymakers always fear when energy prices shoot higher, as they have since the war closed the Strait of Hormuz.
Copper Reaches New Highs on U.S. Tariff Fears, Supply Challenges
Copper prices climbed to a fresh record on the London Metal Exchange as distortions to trade flows due to concerns over potential U.S. tariffs collided with supply challenges at key mines worldwide.
In midmorning European trading on Tuesday, three-month copper futures rose 0.7% to $14,598.50 a metric ton after touching an intraday high of $14,635. The metal is up nearly 17% this year.
AI Use Contributes to Global Decline in Student Reading Skills, OECD Says
The widespread use of AI tools and social media platforms has contributed to a sharp deterioration in the reading skills of high-school students around the world, according to the OECD, with potential implications for the long-term economic outlook.
The Organization for Economic Cooperation and Development on Tuesday said tests taken last year by 760,000 15-year-olds in 91 countries and economies revealed a big drop in scores compared with a decade earlier, reflecting a reduced ability to evaluate information, think critically and bring together multiple pieces of evidence.
Trump's Latest Target for a Name Change: New Mexico
President Trump made a series of social-media posts over the holiday weekend calling for changing New Mexico's name to "New America," his most ambitious-and unlikely-attempt yet to remake the North American map.
Trump started late Sunday with a message that said "many people" have suggested making the name change. "So much more prestigious and beautiful for the people of that potentially incredible State," the post said. "Wow, I Love It!!!"
Greenland Seeks to Turn Peril Into Profit After Trump's Threats to Take It Over
Greenland is cashing in on President Trump's threats and talk of dealmaking by using its position as a strategic Arctic linchpin to draw investments from European allies.
Ursula von der Leyen, president of the European Union's executive arm, visited Greenland on Monday and pledged investments worth 200 million euros, equivalent to about $230 million, in minerals, satellite communications and renewable energy.
Australian Government to Allow Opt Out Of Social Media Algorithms
SYDNEY-The Australian government is pushing toward stricter rules for technology giants with plans to introduce new requirements that would give social media users the ability to opt out of algorithms that shape their social media feeds.
The move by the Labor government follows its introduction of a social media age ban in 2025, and aims to ensure consumers have more choice online, Prime Minister Anthony Albanese said Tuesday.
Write to priscila.barrera@wsj.com
TODAY IN CANADA Earnings:
Nothing major scheduled.
Economic Indicators (ET):
Nothing major scheduled. Stocks to Watch:
Discovery Metals Announces Appointment of William Shaver to Board of Directors; Appoints Ewan Downie as Adviser to President, CEO and Chairman; Appoints Duncan King, Gord Leavoy as Co-COOs
Expected Major Events for Tuesday 04:01/US: 4Q Manpower U.S. Employment Outlook Survey
04:30/JPN: Aug Corporate Insolvencies
05:00/JPN: Aug Economy Watchers Survey
06:00/GER: Jul Foreign trade price indices
06:00/GER: Jul Foreign Trade
06:00/GER: 2Q Labour cost index
06:45/FRA: Jul Foreign trade
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