Pre-Market Update: S&P 500 and Nasdaq Futures Slide as Samsung Q2 Results Disappoint

TLDR

• Nasdaq 100 futures dropped 1% while S&P 500 futures slid 0.2% in pre-market trading Tuesday
• Samsung reported a 19-fold surge in Q2 operating profit but its stock fell nearly 7% on profit-taking
• The Dow futures rose slightly after hitting a record high above 53,000 on Monday
• Oil prices climbed around 1.4% after Iran fired missiles at commercial ships near the Strait of Hormuz
• Federal Reserve minutes are due Wednesday, with no major U.S. market-moving events on Tuesday

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US stock futures pulled back Tuesday morning after Samsung’s blowout earnings report triggered a wave of selling across the chip sector. The Nasdaq bore the brunt of it, while the Dow held up better.

Samsung reported a 19-fold increase in second-quarter operating income, driven by surging demand for artificial intelligence chips. Despite the massive profit jump, the company’s stock fell nearly 7% in Seoul trading.

Analysts pointed to profit-taking after a 382% surge in Samsung’s stock over the past 12 months. The earnings also only beat estimates by around 6%, which disappointed some investors.

Tech Stocks Pull Back After Monday Rally

The sell-off in chip stocks came just one day after a broad market rally. On Monday, the Dow closed at a record high for the second straight session, while the Nasdaq gained more than 1%.

Nasdaq 100 futures dropped around 1% in pre-market trading. S&P 500 futures fell 0.2%. Dow Jones futures edged up about 0.1%, adding 48 points.

E-Mini S&P 500 Sep 26 (ES=F)

The gap between the Dow and Nasdaq futures showed investors rotating away from tech and into more traditional blue-chip stocks.

There are no major scheduled U.S. economic events on Tuesday. A NATO summit in Ankara, Turkey could generate some market-relevant headlines.

Investors are watching Wednesday closely, when the Federal Reserve releases its latest meeting minutes.

Oil Rises After Iranian Attack Near Strait of Hormuz

Oil prices moved higher Tuesday after Iran’s Islamic Revolutionary Guard Corps fired missiles at two commercial ships near the Strait of Hormuz.

Brent crude futures climbed 1.4% to around $73 a barrel. West Texas Intermediate futures rose by the same amount to about $69.50 a barrel.

The Strait of Hormuz is one of the world’s most important oil shipping lanes. Markets are watching closely for any signs that the fragile US-Iran peace deal could break down.

The US dollar edged up 0.1% against a basket of major currencies. The yield on the 10-year Treasury note rose 3 basis points to 4.51%.

Samsung’s earnings report and the tension in the Middle East are now the two main stories driving markets on Tuesday morning.

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