US Stock Futures Preview: All Three Major Index Futures Decline, 10-Year Treasury Yield Hits 5%, Crypto Stocks Slide in Pre-market Trading

Pre-market Market Trends

1. On Tuesday, September 15th, before the U.S. market opened, futures for all three major U.S. stock indexes fell. As of press time, Dow Jones futures were down 0.27%, S&P 500 index futures down 0.15%, and Nasdaq futures down 0.07%.

2. As of press time, the German DAX index was up 0.01%, the UK FTSE 100 Index was down 0.33%, the French CAC40 index was down 0.27%, and the Euro Stoxx 50 index was down 0.17%.

3. As of press time, WTI crude oil was up 0.92% at $102.32 per barrel. Brent crude was up 0.24% at $105.93 per barrel.

Market News

The 10-year U.S. Treasury yield breaks 5%, reaching a near 20-year high, putting the Federal Reserve's anti-inflation credibility to the test. As of press time, the 10-year U.S. Treasury yield was at 5.007%, briefly rising to 5.047% intraday. The 30-year Treasury yield was at 5.373%, touching 5.400% earlier in the session. The increased pressure in the bond market has heightened tensions ahead of the Fed’s rate decision on Wednesday. Investors expect Fed officials to raise short-term borrowing costs for the first time since July 2023. If the Fed does not hike rates, or if Fed Chair Kevin Walsh suggests upcoming monetary tightening may be less than what the market currently prices in, bond investors may demand higher yields to hedge against inflation risk. BMO Capital Markets strategist Vir Hartmann stated, “If the Fed holds rates steady this week, it will likely damage its inflation-fighting credibility. The market is not only vulnerable to a surprise pause but also to a ‘dovish hike’—that is, if the dot plot or press conference sends a more patient signal.” PGIM Credit’s Chief Global Economist, Dalip Singh, commented, “The stronger the Fed can demonstrate its anti-inflation credibility, the more possible it is to compress risk premiums at the long end of the Treasury curve over the medium term.”

Chip stocks: the “pain trade”? Wall Street shifts bets to the next beneficiaries. The AI safety storm is suddenly rewriting Wall Street trading. Investors are recalculating another possibility: if model training slows, the computing power trade may cool, but identity management, data governance, and cybersecurity could see larger spending cycles ahead. Evercore ISI analyst Kirk Materne believes that no matter how quickly AI agents enter the enterprise world, they must be protected, governed, and monitored. Thus, even if AI training slows down, structural demand for cybersecurity and certain foundational infrastructure software remains. Jefferies analyst Joseph Gallo expects that the AI security market for agents is still in its early stages, with initial business signals potentially appearing later in 2026 and significant revenue contributions more likely after 2027. He believes identity security vendors could be among the first beneficiaries, as businesses need to control machine identities, access privileges, and data calls as AI agents increase.

BofA: S&P 500 forms a bullish flag during consolidation; long-term target still above 8,000 points. Bank of America technical analysts remain bullish on the long-term rise, expecting the S&P 500 to break above 8,000 points despite recent market and macro headwinds challenging investor confidence. Since breaking the weekly pennant formation in early August, the benchmark index has successfully reached BofA’s previously set target of 7,741 in the next year. Technical strategist Paul Ciana noted in a client report that as long as the index holds the critical support at 7,500 points, the broader uptrend remains intact. Ciana said recent price consolidation is forming a potential bullish flag on the daily chart, and if the index decisively closes above the 7,760 to 7,770 resistance zone, this pattern will be confirmed. Successfully breaking this level would reopen upside targets at 8,000 and 8,234 points, with the long-term forecast at 8,541. Ciana also warns that losing support at 7,504 to 7,500 points would mark a significant technical breakdown, possibly initiating a pullback to 7,314 to 7,294. Further weakness would ramp up the risk of a deeper retracement towards the rising 200-day moving average around 7,200, or even down to the key breakout region at 7,000 points.

With a Fed rate hike looming, S&P 500 could fall 10%! MRA strategist: A second wave may occur in December. Macro Risk Advisors LLC says the Fed’s imminent rate hike, which could begin as early as this week, may trigger a pullback in the S&P 500 as shrinking corporate profit margins will hurt earnings prospects, while the market is bracing for a tightening cycle. Founder and CEO Dean Curnutt said that if a hike is implemented on Wednesday, the market will come under increased pressure. “We expect the S&P 500 to pull back 8% to 10%, with a second dip possible in December,” he wrote. He said the hike would “squeeze the profit margins of companies unable to pass on costs,” while introducing volatility to a market unprepared for this. Curnutt said the current market setup is similar to what investors saw in 2018, when the S&P 500 peaked in September, then plummeted 10% cumulatively in October and November. He warned that that year’s “Santa Claus rally did not occur,” and the market suffered further losses in December, ultimately falling nearly 20% from its peak.

The “copper scramble” cools? LME sees largest delivery in nearly four weeks as copper retreats to $14,000. Since last week’s surge to an all-time high, copper prices have pulled back significantly. At that time, traders shifted supply to the U.S. ahead of expected tariffs on refined copper, causing shortages elsewhere globally. So far, however, the tariffs have yet to materialize. As of press time, London Metal Exchange (LME) copper futures were at $14,030/ton. On Monday, LME warehouses saw the largest copper delivery in nearly four weeks. The three-month contract turned into a premium of $85.75 per ton over prompt delivery, a structure known as “contango,” which usually indicates abundant supply.

Individual Stock News

Musk fuels Tesla (TSLA.US), SpaceX (SPCX.US) merger speculation, hints at action amid “close cooperation.” Tesla and SpaceX shares saw modest gains in pre-market trading on Tuesday after CEO Elon Musk refused to rule out a merger between the two companies, reigniting speculation that has spread from retail investors to Wall Street. When asked at the All-In Summit why Tesla and SpaceX remain independent despite increasingly close ties, Musk called it a “good question” and hinted that their growing collaboration could eventually prompt action. Musk commented, “With all this collaboration on so many levels, when there is such close cooperation in so many areas, who can say what actions might be taken.”

Broadcom (AVGO.US) CEO rebuffs “AI brakes” talk: AI semiconductor revenue target unchanged, eyeing $230 billion by 2028. The debate over whether development of cutting-edge AI models should hit the brakes continues to reverberate across the industry. After Nvidia (NVDA.US) CEO Jensen Huang directly rejected the “AI brakes” view at an event, Broadcom CEO Hock Tan also tried to downplay related concerns. In a recent interview, Tan addressed worries that a slowdown in advanced AI model development might affect the chipmaker’s business, emphasizing the company’s commitment to its long-term revenue target. At the Los Angeles All-In Summit on Monday, Huang discussed AI safety with the host, flatly dismissing predictions that “AI could destroy the world” as “lacking scientific basis.” In the previous week, Huang sharply remarked that concerns over AI safety might simply create business opportunities for the cybersecurity industry—“What creates demand better than creating a problem?”

Micron (MU.US) AI windfall distribution battle escalates? Taiwanese union threatens strike, HBM supply concerns rise. A trade union representing Micron Technology workers in Taiwan warned Tuesday that a strike is possible unless the U.S. memory chip maker agrees to establish a permanent profit-sharing scheme, escalating a labor dispute at its largest manufacturing hub. The union is seeking a long-term, transparent, and verifiable profit-sharing system, not just a one-time bonus, reiterating demands for 15% of Micron’s operating profit to be distributed to global employees. Taiwan is a key production center for Micron’s DRAM and high-bandwidth memory (HBM) chips, which are core components for AI servers. Although no strike has been announced and production has not been affected, any labor action could intensify already heightened concerns over the memory chip supply chain.

CLARITY Act key procedural vote imminent! Circle (CRCL.US), Coinbase (COIN.US) and other crypto stocks dip pre-market. As of press time, in U.S. pre-market trading Tuesday, Circle and Coinbase fell nearly 5%, and Strategy (MSTR.US) fell almost 4%. It is reported that the U.S. Senate is scheduled for a key procedural vote on the Digital Asset Market Clarity Act (CLARITY Act) at 2:15 pm ET Tuesday; at least 60 votes are needed to advance. The act aims to create a new regulatory framework for cryptocurrencies and other digital assets. Currently, the Republicans hold 53 seats, so the result depends on Democrats. However, crypto reporter Eleanor Terrett posted on X Monday that a group of Senate Democrats plan to meet that night to discuss a counter-proposal.

Rocket Lab (RKLB.US) CFO: Acquisition of Iridium Communications (IRDM.US) will “double” company size overnight, more deals may follow. Rocket Lab expects its proposed acquisition of Iridium Communications will “double” the company’s size “overnight.” As the space company prepares to use the deal as a springboard to further expand its orbital applications and constellation business, broader expansion plans are also unfolding. CFO Adam Spice stated during World Space Business Week that Iridium Communications fills a gap as Rocket Lab transitions from launch service provider to fully integrated space operator. He noted that Rocket Lab’s “very healthy market cap” enables it to pursue the acquisition of a company nearly its own size. In turn, executing its strategy should allow Rocket Lab to continue raising funds for internal investments and future deals. As of press time, Rocket Lab was up more than 2% in U.S. pre-market trading Tuesday.

Key Economic Data & Events Preview

20:30 Beijing time: U.S. September New York Fed Manufacturing Index

Earnings Preview

Wednesday morning: Trip.com (TCOM.US)