- The three major U.S. stock index futures were collectively under pressure before the market opened on Tuesday, with the Nasdaq 100 E-mini contract leading the decline by 0.78%. This was mainly due to the valuation adjustments of Nvidia and memory chip, data storage stocks, as funds are rapidly flowing out of the high P/E semiconductor sector.
- International benchmark commodity prices fluctuated at high levels. Although Brent crude oil futures marginally fell by 1.5%, they remained above $110 per barrel due to macro conflict uncertainties. The global sovereign bond sell-off momentum temporarily eased, with the U.S. 10-year Treasury yield slightly retreating to 4.587%.
- The market's pricing of the Federal Reserve's nominal interest rate path has undergone a hawkish reconstruction. The CME's FedWatch tool shows that the probability of at least a 25 basis point rate hike by early next year has risen to around 40%. Investors are awaiting the release of the Fed's policy meeting minutes and Nvidia's earnings report on Wednesday.
Valuation Multiples of Growth Tech Assets Under Reassessment
As long-term U.S. Treasury yields reached their highest level since February 2025, the discounted cash flow models of high-valuation tech stocks are facing systemic reassessment. In pre-market trading, Nvidia recorded a decline of over 1%, risking a third consecutive day of losses. Meanwhile, the decline in the memory chip and data storage sub-sectors continued, with Micron Technology, Seagate Technology, and Western Digital showing significant pre-market declines. This reflects that allocation funds, in the absence of new market catalysts, are beginning to take profits on core heavyweight stocks that have driven the market to new highs this year, shifting funds to defensive assets.
Macroeconomic Uncertainty Suppresses Risk Asset Premiums
Although the Trump administration postponed a military action against specific geopolitical targets originally scheduled for Tuesday, temporarily alleviating concerns about physical crude oil supply, the sustained high commodity prices continue to fuel financial market worries about secondary inflation. Major global central banks may be forced to adopt longer cycles of tightening or neutral monetary policies in the face of inflation resilience, directly constraining risk appetite in the derivatives market. XTB Research Director Brooks pointed out that due to the lack of a clear mechanism to resolve geopolitical stalemates, investors generally factor in higher geopolitical premiums when assessing high-risk assets.
Key Macroeconomic Variables and Corporate Earnings Outlook
On Wednesday, the market's core focus will shift from pre-market fluctuations to the unfolding of two major events. First is the release of the Federal Open Market Committee's policy meeting minutes, as the market seeks to capture the internal support for moving away from an accommodative stance towards a more restrictive policy position. Secondly, as a barometer of global AI demand, Nvidia's upcoming earnings report will directly confirm or refute the current high valuation bubble in the semiconductor industry. Additionally, Walmart's performance this week will provide data on end consumers' actual resilience in the face of rising energy costs.
