The S&P 500 fell 0.2% yesterday while the equal-weight (-1.2%), Russell 2000 (-0.9%) and Dow (-1.1%) saw larger declines. Oil jumped over 5% after the US resumed strikes against Iran and President Trump commenting the ceasefire was over as far as he was concerned. Despite the turn of events, it so far looks to be another contained flare up rather than complete collapse of the détente. Tech strength mitigated the losses for the S&P versus the other indexes. The US conducted more airstrikes on Iran overnight and Iran hit sites in Kuwait and Bahrain, but it seems that may be the end of the flare-up that pushed equities lower yesterday, at least for now. S&P futures are near their best levels, up 0.3% as we approach the Open despite crude rising for the third straight day.

Software stocks are under pressure in the pre-market following a Bloomberg report that SBUX is using AI to develop internal tools to cut reliance on outside software, playing right into the AI disruption narrative. META is down 3% after a report it will begin production of a new AI chip in September and double it’s AI compute capacity to 14GW in 2027, following yesterday’s news it will invest ~$10B to build its first data center in Canada. That’s going against the concerns that were triggered last week on reports the company was looking into selling excess capacity. That’s also pushing AI tools and supply stocks (chips, etc) higher ahead of the Open. What’s also helping is Micron announcing its raising its planned US investment to over $250B through 2035, up from $200B. LEVI (-3%) reported a beat and raise last night but is trading lower. AZN is down 8% in the pre-market following negative clinical trial results.