US EQUITY OPEN: Indices open rangebound in lacklustre trade as Middle East headlines dominate the tape
OPEN: US indices opened the first trading session of the week mixed, as the tech-heavy Nasdaq 100 gains, and outperforms, while the Russell 2000 and S&P 500 see slight losses to varying degrees. Newsflow has been pretty quiet, but a couple of US/Iran headlines have been the highlight; Al-Arabiya sources said the 60-day period between Iran and the US has been extended, while a Senior Iranian official said Iran has decided to shift its policy from defensive to a 'fully offensive' one. Meanwhile, US President Trump stated there are ongoing back channels with the IRGC, but the IRGC denied this. Sectors are exclusively in the red, aside from Technology, with Consumer Staples, Materials and Real Estate lagging. The calendar ahead is quiet as only NAHB is scheduled at the top of the hour. Elsewhere, WTI and Brent are firmer by c. USD 0.40/bbl, and seen two-way trade on the aforementioned headlines, with precious metals also eking out gains. Treasuries are marginally lower. In FX, G10 peers noticing strength across the board vs. the Dollar as Antipodeans reside as the outperformers. Regarding earnings this week, retailers are the highlight as WMT, HD, TGT & LOW are all set to report, ahead of NVDA next week.
STOCKS SPECIFICS:
- Alibaba (BABA) selling its Gaming unit for at least USD 1.5bln to fund its AI push.
- Diana Shipping (DSX) withdrew its offer to acquire Genco (GNK), citing demands from the Genco board it deemed unrealistic.
- Nvidia (NVDA) & OpenAI are nearing a deal to finance a large-scale data centre campus in Ohio.
- IRS investigating UnitedHealth (UNH) over alleged underpayment of taxes between 2017-20 via a foreign subsidiary
- Mobileye (MBLY) was upgraded at Berenberg to Buy from Hold.
- US Commerce Secretary Lutnick said the Trump administration opposes Apple (AAPL) using Chinese memory chips.
- Nvidia (NVDA) will be the exclusive AI compute infrastructure provider for SB Energy’s PORTS-Pike data centre campus in Ohio; WSJ reported that Nvidia’s financial guarantee reduced from USD 250bln to under USD 120bln to address investor concerns over risk exposure.
- Shopify (SHOP) was downgraded at Phillip Secs to 'Accumulate' from 'Buy'.
- US Navy awards RTX (RTX) $22.9bln contract to boost output of tomahawk missile.
Session opens dominated by geopolitical headline flow rather than data tend to trade two-way until the rhetoric either hardens into action or fades; in past episodes of US/Iran tension of this kind, crude and gold have carried a risk premium that unwinds quickly once back channels reassert themselves, which is the sequence to note here given the simultaneous denial and extension headlines. The Nasdaq 100 outperforming a softer Russell 2000 fits the established pattern of mega-cap tech behaving as a relative shelter in low-conviction tapes, with breadth and sector skew doing the talking rather than index level. The oil response, modest gains on conflict headlines, is consistent with prior instances where supply risk is flagged but no barrels are actually disrupted; the tell in those cases has been freight and prompt spreads rather than the flat price. With the domestic calendar thin, the retail earnings slate is the next scheduled catalyst, and consumer prints from that peer set have historically set the tone for staples and discretionary positioning into month end. Single-stock drivers, the UNH tax probe and the China chip rhetoric around Apple, follow a familiar pattern of idiosyncratic regulatory overhang capping the name while the sector trades through.