Google, Apple Boost Big Tech Gains

STOCK INDEX FUTURES

Stock index futures are mixed, with the S&P and Nasdaq posting gains while the Dow slips. Google was spared in an antitrust lawsuit after a judge ruled that the tech giant does not need to sell its Chrome browser, allowing the company to continue paying Apple to use Google Search as a default in its devices. Google’s and Apple’s shares rallied in premarket trading, helping lift the S&P and Nasdaq and also reinforcing the strength of the big tech rally. Markets will await today’s JOLTS jobs report and watch for any signs of layoff activity that could signal coming weakness in the labor market. ADP private payrolls for August and weekly jobless claims data on Thursday will also add clues about the strength of the US labor market ahead of Friday’s jobs report.

The indexes remained firmly lower on Tuesday as the global bond sell-off spilled over into equity markets across the globe, as investors grew cautious over several major countries’ fiscal outlooks, and as markets eyed President Trump’s attempt to fire Fed Governor Lisa Cook. Investors are also waiting on a court ruling regarding Trump’s tariffs after a federal appeals court said the tariffs were illegal, although it left them in place until a higher court rules on the issue. Secretary Scott Bessent said on Monday that he is confident that the Supreme Court will back President Trump’s use of emergency powers to implement tariffs.

ISM Manufacturing PMI data showed activity remained in contractionary territory for the sixth straight month, with the index coming in at 48.7, which was an uptick from last month’s reading of 48.0. New orders, however, rose to 51.4, a strong rebound from July’s 47.1. Production saw a sharp drop in activity, falling into contractionary levels with a reading of 47.8, down from 51.4. Employment continued to fall, though at a slightly slower pace, while customers’ inventories and order backlogs shrank, pointing to weaker demand conditions. The gauge for input price inflation eased to 63.7 from 64.8 but remains at a historically elevated level. Survey respondents continued to point to tariffs as a drag on business conditions, citing higher costs, supply chain disruptions, and reduced competitiveness. Services activity on Thursday will also provide further clues on how the US economy is currently faring, especially after the implementation of hefty tariffs.

CURRENCY FUTURES

The USD index slipped in the overnight session following Tuesday’s strong gains that were brought on from weakness in several major foreign currencies. Markets will look to JOLTS Job Openings and the Fed’s Beige Book later today for clues on labor market strength and on economic conditions in the US. Friday’s August nonfarm payrolls data remains the key piece of data this week, which could potentially signal the amount of easing the economy will see from the Fed this year. San Francisco Fed President Mary Daly said Friday the central bank is prepared to ease policy given risks to the labor market, adding that tariff-driven inflation may prove temporary. Markets are pricing in nearly a 92% chance of a rate cut in September. PCE inflation data last week came in line with expectations. The dollar has also felt pressure from President Trump’s efforts to remove Fed Governor Lisa Cook and, if successful, replace her with a more dovish-leaning candidate.

Euro futures edged higher Wednesday following the release of S&P Global Composite PMI figures for August, which showed private sector activity in the eurozone expanded at a smaller pace than expected. Composite PMI figures posted an index reading of 51.0, just below expectations for a reading of 51.1, while services PMI figures also squeezed out growth, posting a reading of 50.5 vs. expectations of 50.7. Consumer prices rose 2.1% in August in the eurozone, up from 2.0% in July and adding to expectations that the European Central Bank will leave interest rates unchanged at its meeting next week. Core inflation was unchanged at 2.3%. In Germany, inflation rose in August, while inflation eased in France and was stable in Italy and Spain, per data posted last week. The European Union’s statistics agency Monday said the unemployment rate fell to 6.2% from 6.3% in June, matching a record low, as the number of workers without a job fell by 170,000. The data added to market expectations that the ECB will be comfortable leaving borrowing costs in place for the longer term. The recent strengthening of the euro, which is expected to continue into the future, has reduced the competitiveness of European goods on the global market. The stronger euro, along with newly imposed US tariffs, is likely to hurt growth for the trade bloc, especially for export-focused Germany, as its European neighbors will be unable to pick up the hit to demand from the American market.

British pound futures are higher, gaining back some of yesterday’s losses that were sparked by a rise in bond yields. PMI survey figures out of the UK were better than expected, with composite PMI posting a reading of 53.5, beating expectations of 53.0, while services PMI figures also outperformed expectations with a reading of 54.2 vs. expectations of 53.6. Long-dated government bonds in Britain hit their highest levels since 1998 over concerns regarding the fiscal health of the country that triggered a sell-off in the bond market. Investors are growing worried over the UK’s ability to get its finances under control and the government’s ability to exercise self-imposed fiscal constraint rules. Finance Minister Rachel Reeves is expected to raise taxes in her autumn budget in order to remain on course for her fiscal targets, potentially adding to the challenge of boosting growth. Fiscal policy could weigh further on the sterling if Reeves raises taxes again. The UK’s challenging fiscal environment could open the door for more rate cuts this year if economic conditions worsen. However, money markets now see only around a 36% probability of a quarter-point reduction this year, and the next cut is likely priced in for spring 2026. Inflation rose to 3.8%, although many price pressures are expected to drop from the last reading. Still, inflation remains well above the Bank of England’s target, and in its most recent policy meeting, policymakers signaled they were more concerned with rising inflation than they were with supporting the economy. Bank of England Governor Andrew Bailey is also set to speak today at the House of Common’s Treasury Committee.

Japanese yen futures continued lower on Wednesday as political uncertainty regarding Prime Minister Shigeru Ishiba’s fate continues to weigh on the yen. Secretary-General Hiroshi Moriyama, a close aide to Prime Minister Shigeru Ishiba, said he intended to resign earlier in the week. This development follows Ishiba’s party’s defeat in the upper house election in July, which has resulted in calls for him to resign from his post. Ongoing political uncertainty over Ishiba’s possible decision to resign will likely weigh on the yen. Further pressuring the yen were comments from Deputy Governor Ryozo Himino that offered a lack of a hawkish tone. Himino offered few hints on how soon the central bank could raise interest rates, cautioning that global economic uncertainty remains high. Tokyo core CPI recorded a reading of 2.5% last week, above the Bank of Japan’s 2% target and down from a previous recording of 2.9%. Industrial production in the country declined 1.6% in July, below expectations of a 1.1% drop, while retail sales in the country shrank 1.6% during the same period as well, also falling below expectations. At the same time, the unemployment rate eased to 2.3% from 2.5% in June, pointing to continued labor market strength. The mixed data suggests that conditions for a rate hike from the BoJ are not yet in place. BoJ Governor Kazuo Ueda recently stated that wages are expected to rise further amid tightening labor conditions, reinforcing expectations that another rate hike is potentially coming into view.

Australian dollar futures are higher, boosted by better-than-expected GDP figures that saw the economy grow 0.6% during the second quarter. Annual growth came in at 1.8%, beating expectations of 1.6% growth. The data points to evidence of a recovery in the economy, although the figures remained sluggish in a general sense as investment in the country weakened. Weather events like floods and major storms in Queensland curbed growth to a degree, the Australian Bureau of Statistics noted. Domestic demand was the main driver of growth, led by household and government spending. Household spending grew 0.9% in Q2. The data also shows that interest rate cuts from the Reserve Bank of Australia have helped lift private demand. The RBA is expected to keep cutting rates over the next year but could reduce the amount of easing if inflationary pressures become evident. Recent CPI data showed an uptick, reminding policymakers that caution is warranted. Elsewhere on the data front, manufacturing activity jumped to a near three-year high in August 2025, marking the eighth consecutive month of expansion. Meanwhile, business inventories saw their weakest expansion since the contraction in Q3 2024. In the housing sector, private house approvals posted a modest rebound in July. However, this was overshadowed by a steep drop in total dwelling approvals, which fell well short of forecasts and erased June’s strong gains.

INTEREST RATE MARKET FUTURES

Futures are little changed across the curve following Tuesday’s spike in yields that was triggered by a selloff in Britain that made its way across seas.

Investors are showing refreshed concern over high government debt levels and how they could impact global bond markets. Bond yields, especially longer-dated yields, rose across global markets on Tuesday amid worries of unrestrained government spending and widening government deficits. While worries about fiscal issues overseas were the main drivers in the US, markets also focused in on Friday’s appeals court ruling that most of President Trump’s tariffs are illegal. The court allowed for the tariffs to remain until October 14 to give the administration a chance to file an appeal with the Supreme Court. Markets will remain highly sensitive to labor data, with Friday’s data likely being a decisive piece of information for interest rate expectations after July’s PCE inflation data offered no surprises. Weak data on the labor front, as well as weak readings from ISM surveys due this week, could drag yields lower. Concerns over the removal of Governor Lisa Cook have continued to stay evident in Treasury yields, with markets expecting a board with a more dovish tilt. The prospect of monetary policy that could be looser than necessary has raised concerns that the board could lose its grip on inflation has sent short-term yields lower and longer-term yields higher as inflation expectations increase.

The US Treasury market is also experiencing a unique supply/demand dynamic shift. Recent government debt auctions have shown a changing profile of who is purchasing government bonds, with demand from traditional investors like central banks and pension funds waning and unlikely to come back. Instead, short-term investors such as money market funds have picked up supply. The new mix of investors is likely to lead to a more volatile market for longer-dated debt, as short-term investors will be more price sensitive than traditional investors, like pension funds, who tended to hold onto their bond investments. Demand from pension funds has dwindled in recent years due to funds switching from defined-benefit schemes, which provide a guaranteed income at retirement, to defined-contribution schemes,which depend on investment performance. Defined-benefit schemes use government bonds, while defined-contribution schemes favor equities. These developments also come at a time when central banks are selling their holdings of government debt (quantitative easing), and governments are increasing spending, driving up bond issuance. This has resulted in investors demanding more term premium on longer-dated debt, while shorter-term debt has remained closer to current interest rate levels, steepening the yield curve. In response, governments have increased short-term debt issuance in order to avoid steeper borrowing costs, which has the potential to reduce liquidity in longer-dated bonds and make them more volatile.

PCE inflation rose 0.2% month-over-month, a slight cooling from June’s 0.3% increase, with goods prices falling 0.1% and services prices rising 0.3%. Core PCE inflation remained steady at 0.3% monthly but ticked up to 2.9% year-over-year—the highest in five months—suggesting persistent underlying inflation pressure remains. The steady monthly core inflation and uptick in the annual rate could reinforce expectations that the Fed will remain cautious about cutting rates too soon. However, given Powell’s recent comments, it is likely the Fed will move to cut rates soon in the near future at its September or October meeting. The inflation reading adds even more importance to August’s labor market figures for further clues as to how the Fed will move in September and to the extent of easing the economy will see from the bank before year-end.

The spread between the two- and 10-year yields fell to 62 bps from 62.7 bps on Tuesday.

Interested in more futures markets?  Explore our Market Dashboards here.