Most Important News

1. Potential Hormuz Deal Sinks Oil Prices;
2. Trump Administration Drafts Ban on Chinese Data Center Tech;
3. Wall Street Eyes SpaceX Earnings and Guidance;
4. Caterpillar Q2 EPS Beats Estimates, Shares Jump 7%;

US equity futures climbed early Tuesday, driven by a combination of stellar corporate earnings and easing geopolitical tensions. Upbeat quarterly reports sent shares of Caterpillar and Palantir Technologies soaring, while crude oil retreated on signs of a potential diplomatic breakthrough in the Middle East.

As of 03:47 PM Riyadh time, the Dow Jones Industrial Average futures surged 656 points, or 1.23%, heavily lifted by a 15% jump in Caterpillar Inc.(CAT.US). Concurrently, Nasdaq-100 futures advanced 1.07% on the back of a 15% premarket surge in Palantir(PLTR.US), while S&P 500 futures ticked up 0.33%.

A major driver behind the morning's broader market optimism was the potential reopening of the Strait of Hormuz. Speaking on CNBC’s “Squawk Box,” Treasury Secretary Scott Bessent confirmed ongoing negotiations with Tehran.

“We are in talks with the Iranians,” Bessent stated, noting that an agreement could be reached imminently. “There is a chance we may have a deal today or tomorrow to open the Strait and move towards a more normalized position in this conflict.”

Energy markets reacted swiftly to the prospect of restored transit through the critical waterway. West Texas Intermediate (WTI) crude slid 3% to trade near $77 per barrel, and Brent crude, the global benchmark, fell 2% to hover around $81 per barrel.

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As of 03:49 PM Riyadh Time, top pre-market movements are as follows:

Potential Hormuz Deal Sinks Oil Prices

US Treasury Secretary Bessent indicated an agreement with Iran to reopen the Strait of Hormuz could be finalized soon. Consequently, WTI crude plunged 4.0% to US$77.02 per barrel. Qatar's foreign ministry noted reconciliation efforts are ongoing and draft agreements are circulating, though they cautioned no direct US-Iran talks or definitive timelines are established yet.

US Bond Volatility Looms Ahead of Key Data

Long-term US Treasury yields surged last week, with the 30-year rate hitting a post-2007 high. Volatility may worsen this week amid upcoming US Treasury financing plans and July non-farm payrolls. Consequently, hedging demand has spiked, pushing the MOVE index higher as traders brace for rising rates and shifting Fed expectations.

Citadel Forecasts US$500 Billion AI Debt Surge

Citadel Securities anticipates US tech companies will issue over US$500 billion in debt by 2028 to fund AI chip purchases. Chipmakers alone may issue US$250 billion in 2028. This massive financing could reshape the investment-grade credit market, likely forcing investors to cut allocations in the tech, media, and telecom sectors to absorb the new supply.

Trump Administration Drafts Ban on Chinese Data Center Tech

Reuters reports the Trump administration is preparing to ban US imports of new Chinese data center components. The Federal Communications Commission is drafting measures to block new Chinese optical transceivers, which transmit data at light speed over fiber-optic cables. Officials plan to unveil and implement the restriction this year.

Wall Street Eyes SpaceX Earnings and Guidance

Analysts remain bullish on SpaceX(SPCX.US), with 30 of 39 rating it a buy. Raymond James maintains a US$800 target, expecting exponential revenue growth. Morgan Stanley reiterates a US$300 target, viewing US$100 as an attractive entry. Bernstein notes quarterly performance matters less than management's growth confidence, asserting a multi-trillion valuation is inevitable given orbital data center plans.

McDonald's Q2 EPS Beats Estimates Amid Slower Sales

McDonald's Corporation(MCD.US) reported Q2 global system-wide sales of US$37 billion, up 5%. Revenue reached US$7.1 billion, slightly missing estimates, while adjusted EPS of US$3.38 beat expectations. Although operating profit rose 3% to US$3.338 billion, growth momentum softened. Global comparable sales grew just 1.3%, down from 3.8% last year. Meanwhile, the digital business remains a crucial growth driver.

Snap Q2 Earnings and Q3 Guidance Beat Estimates

Snap(SNAP.US) shares surged 8% pre-market after Q2 revenue hit US$1.6 billion, beating the US$1.54 billion estimate. Adjusted EBITDA reached US$250 million, while daily active users matched expectations at 490 million. The firm anticipates Q3 revenue of US$1.7 billion to US$1.74 billion and adjusted EBITDA between US$300 million and US$350 million, both exceeding analyst projections.

Palantir Q2 Revenue Soars 93%, Guidance Raised

Palantir(PLTR.US) shares jumped 15% pre-market after Q2 revenue soared 93% to US$1.94 billion, beating estimates. Growth was driven by record US commercial sales of US$764 million and US government revenue of US$809 million. CEO Alex Karp attributed the exceptional quarter to strong demand for AI sovereignty. The company raised its full-year revenue outlook to up to US$8.158 billion.

Caterpillar Q2 EPS Beats Estimates, Shares Jump 7%

Caterpillar Inc.(CAT.US) surged 7% pre-market as Q2 revenue rose 24% to US$20.54 billion, topping the US$19.01 billion estimate. Adjusted EPS reached US$8.17, beating the US$6.17 forecast. The machinery, energy, and transportation segment drove results, posting a 25% increase in revenue to US$19.58 billion and a 51% increase in operating profit to US$4.21 billion.

India Sales Exceed US$10 Billion

In the 12 months ending this March, Apple Inc.(AAPL.US) saw its India sales top US$10 billion for the first time. Posting double-digit % growth from US$9 billion last year, the nation is rapidly becoming a vital market outside the US and China. This represents a landmark milestone following its 2020 online debut and 2023 physical store openings.

Bezos Plans US$4.1 Billion Stock Sale

After Amazon.com, Inc.(AMZN.US) crossed the US$3 trillion market cap milestone Monday, after-hours shares dropped over 1%. Filings reveal founder Jeff Bezos intends to sell 15 million shares, worth roughly US$4.07 billion, around August 3. The transaction executes under a pre-arranged 10b5-1 trading plan to prevent insider trading by scheduling sales well in advance.

Rubin Ultra HBM Specs Under Review

Facing projected DRAM shortages through 2027 and HBM4e validation uncertainties, NVIDIA Corporation(NVDA.US) is reconsidering its Rubin Ultra HBM configuration. TrendForce reports that from Q3 2026, the firm may pivot from an exclusive HBM4e 12hi setup to evaluating alternatives like HBM4 12hi or 8hi. Additionally, some cloud providers are contemplating reducing HBM capacity for upcoming ASICs.

Nebius Bets on AI Infrastructure Demand

NEBIUS(NBIS.US) expects infrastructure providers to capture massive value in the AI era alongside model developers. A Morgan Stanley(MS.US) analysis indicates the firm is a potential beneficiary regardless of whether closed-source or open-source models ultimately dominate the market. In either scenario, the surging demand for training and inference computing power will make the company a major winner.

DeepMind Exec Weighs AI Costs and RSI Potential

An Alphabet Inc. Class C(GOOG.US) DeepMind executive warned that current AI revenues cannot sustain massive ongoing capital expenditures of up to US$700 billion. However, he advised against doubting the tech sector's future, noting early signs of Recursive Self-Improvement are already emerging. RSI allows AI to upgrade itself autonomously, moving closer to general intelligence.