US Futures Decline, Oil Surges on Geopolitical Tensions; Walmart Down 7%

Lead US equity futures are lower this morning, reversing earlier gains. S&P futures are down 0.53%, Nasdaq futures are down 0.76%, and Dow futures are down 0.82%. The US 10-year yield is up 1.10% to 4.7%. Crude oil prices are surging, with WTI up 3.19% and Brent up 2.75%, driven by escalating geopolitical tensions in the Gulf of Aden and near Yemen, including reports of hijacked tankers. Gold is down 0.53%. In corporate news, Walmart shares are down 7% after flagging a stretched consumer and the slowest US sales growth in 6 years. Micron expects to break ground on a new R&D facility in 2027. Moderna's price target was raised to $120 from $67 following positive Phase 3 data. Session narrative Equity futures are broadly lower in pre-market trading. S&P 500 futures are down 0.53%, Nasdaq futures are down 0.76%, and Dow futures are down 0.82%. The Russell 2000 futures are also down 0.76%. The VIX is up 7.66% to 16.03. The US 10-year yield is up 1.10% to 4.7%. The dollar index is down 0.08%. In commodities, WTI crude is up 3.19% and Brent crude is up 2.75% due to heightened geopolitical tensions. Gold is down 0.53%, while silver is up 0.94%. Copper is down 1.25%. In individual stock news, Walmart is down 7% after reporting a stretched consumer and the slowest US sales growth in 6 years. Coty shares extended premarket losses, last down 18.5%. Moderna's price target was raised to $120 from $67 after positive Phase 3 data. Micron expects to break ground on a new R&D facility in 2027. HYPR Hyperfine received FDA clearance for its Next Optive AI software. Allstate announced July estimated catastrophe losses of $682M. CVS, Humana, and UnitedHealth are seeing softer Medicaid managed care declines. NTNX analyst reiterated Outperform and raised its price target to $80. US continued claims rose to 1.799M for the August 8 week, while the insured unemployment rate held at 1.2%. The effective Fed Funds rate remains at 3.63%. Cross-asset check In the currency markets, the EUR/USD is up 0.06%, while the USD/JPY is up 0.35%. The Swiss franc strengthened to around $0.798, its highest level in two months. In commodities, palm oil is rising toward a 20-month high near 4,965 ringgit/tonne. UK natural gas is inching higher near 157p/therm on Hormuz risk. Bitcoin jumped 11% to an 11-week high on short liquidations. Long-dated Treasuries erased their gains as rising oil prices revived concerns over inflation. Themes & continuing stories Geopolitical tensions are a dominant theme, with multiple maritime incidents reported in the Gulf of Aden and near Yemen, driving oil prices higher. Iran's Azizi issued a warning of "even more severe consequences." China is stalling exports of key materials to Taiwan, adding to geopolitical concerns. Taiwan's cabinet approved a record $35.1 billion defense budget for 2027. Inflation concerns are resurfacing, with rising oil prices contributing to this sentiment. Federal Reserve official Mary Daly noted the Fed is missing its inflation goal by "quite a bit" but sees no signs of more worrying inflation. The consumer spending outlook remains a key focus, with Walmart flagging a stretched consumer and slower sales growth. The copper market is experiencing a squeeze, drawing the biggest weekly flow to LME sheds since 2020. What’s ahead Traders will continue to monitor geopolitical developments, particularly those impacting energy markets. Federal Reserve commentary on inflation and monetary policy will remain under scrutiny. Economic data releases, including jobless claims and other indicators of consumer health, will be closely watched for further insights into the economic outlook.