HG MARKETS: 

U.S. equity futures extended losses on Monday as investors remained cautious following a volatile week on Wall Street. Nasdaq 100 futures led the decline, falling around 0.6%, while S&P 500 and Dow futures also traded lower. Rising Treasury yields, elevated corporate debt levels, and geopolitical tensions weighed on overall risk appetite.

The weakness follows a defensive session last week, with the S&P 500 falling 1.4% and the Nasdaq declining 2.1%, ending a three-week winning streak. The Dow also slipped 0.9%. Investors continue to closely monitor the bond market, as higher borrowing costs are putting pressure on equity valuations, particularly in long-duration technology stocks.

Market attention is now firmly focused on Nvidia’s upcoming quarterly earnings report. As a key beneficiary of the artificial intelligence boom, Nvidia’s results and forward guidance will be closely watched for signs of continued AI demand. Any slowdown in data-center growth or weaker guidance could trigger renewed selling across technology and AI-related stocks.

Concerns are also growing over the rising cost of financing AI infrastructure. The U.S. 30-year Treasury yield remains near 5.24%, while the 10-year yield is around 4.70%. At the same time, major technology companies are issuing large amounts of debt to fund AI-related capital expenditure, raising concerns about higher financing costs and pressure on future corporate profitability.

Geopolitical and trade tensions are adding further pressure to market sentiment. The ongoing U.S.-Iran standoff and disruptions around the Strait of Hormuz have kept oil prices elevated, while renewed U.S.-Canada trade tensions are creating additional uncertainty. Higher energy prices could also increase inflationary pressures and complicate the Federal Reserve’s policy outlook.

Looking ahead, investors will focus on Federal Reserve Chair Kevin Warsh’s upcoming Jackson Hole speech and the July PCE inflation report for clues about the future path of interest rates. With bond yields elevated and valuations stretched, U.S. equities may remain volatile, while Nvidia’s earnings could become a key catalyst for the broader technology sector and overall market direction.