Why Nasdaq, S&P 500, Dow Futures Are Edging Lower Overnight After Markets Closed Up Last Week

U.S. stock futures were trading lower in the overnight session late Sunday amid ongoing uncertainty over a deal between the U.S. and Iran, even as strong corporate earnings over the past week have bolstered markets higher.

Markets will be watching for July’s consumer price index (CPI) and producer price index (PPI) slated for later this week for clues on inflation and insights into the Federal Reserve’s next monetary policy move.

Dow futures were down 0.19%, S&P 500 futures fell 0.10%, while Nasdaq-100 futures edged 0.03% at 08:54 PM EDT.

U.S. stocks closed higher on Friday, with the S&P clocking another​ record high, ending the session 0.62% higher. The Dow and Nasdaq also climbed 0.28% and 1.30% up at close.

All three benchmark indexes closed the week higher, notching best gains since April. The Dow closed nearly 3% up, while the S&P 500 added 3.58% at close and the Nasdaq ended the week more than 5% higher.

Chief Market Strategist at Creative Planning Charlie Bilello said in a post on X on Sunday, “S&P 500 Q2 earnings are on pace to rise 50% YoY, the highest growth rate since Q2 2021. We've never seen earnings growth this high outside of post-recessionary rebounds. This is an unprecedented boom fueled by massive EPS gains in big tech, including markups in SpaceX/Anthropic.”

Last week, U.S. markets largely reacted to strong earnings from marquee names and July nonfarm payrolls report that released on Friday, which clocked a surprise contraction in jobs even as unemployment rates came in lower than expected.

The economy reported a decline of 23,000 jobs versus an expectation of 83,000 forecast by Dow Jones economists. Unemployment rates came in at 4.1% versus an expectation of 4.2%.

The unexpected contraction stoked market hopes that the Federal Reserve would likely hold off on hiking interest rates in September. According to the CME FedWatch tool, markets are now predicting a probability of about 44% that the central bank will hike rates at its next meeting, down from 67% a week ago.

“The stock market is likely to welcome the dovish implications of the [jobs] report,” Peter Graf, investing chief at Amova Asset Management Americas, told CNBC. But he added that “investors should be wary of the future growth potential of an economy where fewer people are working.”

On the geopolitical front, the uncertainty around the U.S. and Iran’s likelihood of reaching a deal soon has also been weighing on markets.

Last week, U.S. Treasury Secretary Scott Bessent indicated that a deal to reopen the Strait of Hormuz could be close. However, U.S. President Donald Trump reportedly told Axios over the weekend that the U.S. was “only semi-negotiating” with Iran and intends to continue exerting economic pressure on the country.