Investing.com -- The Wall Street indices are set to rebound Tuesday after the previous session's slump, following on from Nikkei's bounce, while Alphabet's Google lost an antitrust case in the U.S.
1. Futures rebound after sharp selloff
U.S. stock futures rose Tuesday, rebounding after the previous session’s sharp losses on concerns that the U.S. economy was heading towards recession.
By 04:25 ET (08:25 GMT), the Dow futures contract was 240 points, or 0.6%, higher, S&P 500 futures climbed 50 points, or 0.9%, and Nasdaq 100 futures rose by 175 points, or 1%.
The Wall Street indices suffered a brutal start to the new week, with the blue chip Dow Jones Industrial Average dropping over 1,000 points, or 2.6%, and the broad-based S&P 500 index falling 3%, their worst sessions since September 2022.
The tech-heavy Nasdaq Composite slipped 3.4%, tumbling deeper into correction territory.
Results from industrial bellwether Caterpillar (NYSE:CAT) are due later in the session, and will give more insight into the health of manufacturing and the consumer. Super Micro Computer (NASDAQ:SMCI) is also expected to report, and will be in particular focus as it is at the center of the market's artificial intelligence excitement.
Palantir Technologies (NYSE:PLTR) surged 10% premarket on strong quarterly results and a guidance lift, while Lucid Group (NASDAQ:LCID) rallied over 13% on better-than-expected revenue in the second quarter.
2. Google loses US antitrust case
Alphabet (NASDAQ:GOOGL)'s Google violated antitrust law, a U.S. Federal Judge ruled on Monday, as the tech giant lost its legal battle against the Department of Justice, the first big win for federal authorities taking on Big Tech's market dominance.
“Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Amit Mehta in Washington ruled on Monday.
The judge concluded that Google has "violated Section 2 of the Sherman Act by maintaining its monopoly in two product markets in the United States general search services and general text advertising-through its exclusive distribution agreements."
The ruling, which can be appealed, marked a major win for the DoJ, who had argued that Google's agreements with companies, including Apple (NASDAQ:AAPL), to make Google the default search engine on smartphones violated antitrust laws.
The ruling paves the way for a second trial to determine potential fixes, possibly including a breakup of Google parent Alphabet, and also offers encouragement to the U.S. antitrust authorities prosecuting the powerful Big Tech companies.
3. Harris set to unveil running mate
Kamala Harris is set to unveil her vice presidential running mate later Tuesday, her first major decision as the Democratic Party's presidential candidate as she attempts to win the White House in November.
Harris has narrowed her list of candidates to Pennsylvania Governor Josh Shapiro and Minnesota Governor Tim Walz, Reuters reported, citing sources.
Harris became the Democratic Party's standard bearer after President Joe Biden ended his re-election campaign last month, gathering sufficient delegates to be her party's nominee, and prompting the Democratic National Committee late on Monday to confirm she had officially secured the nomination.
Harris is expected to appear with her running mate at an event in Philadelphia late Tuesday.
4. Nikkei rebounds, but still in bear market
Most Asian stock markets rebounded Tuesday, with Japan’s benchmark Nikkei 225 index leading the way.
The Nikkei surged 10% Tuesday, helped by some bargain buying, as traders piled into heavily discounted stocks with strong fundamentals, and which are likely to benefit from lower interest rates in the coming months.
That said, the Nikkei still remained in bear market territory after tumbling just over 12% in the prior session, its worst day since the 1987 Black Monday crash.
Still, a recovery in Japanese markets was still a “little time away,” with markets likely to trade flat in the near-term before gaining enough confidence for a recovery, Citi analysts said in a note.
The near-term outlook for Japanese markets remains dour, with Citi forecasting risk-off trades to “dominate.” The brokerage recommended defensive sectors in the near-term.
The brokerage said that a brief U.S. recession, guarantees of stimulus support for the global economy and a less hawkish tone from the BOJ will be needed to spark a recovery in local markets.
5. Crude rebounds from lows
Crude prices rose Tuesday, rebounding from eighth-month lows as traders took advantage of battered levels to restock and as MIddle East tensions remain.
By 04:25 ET, the U.S. crude futures (WTI) climbed 0.4% to $73.25 a barrel, while the Brent contract rose 0.2% to $76.44 a barrel.
Concerns over an escalation in the Israel-Hamas war, especially after Iran vowed retaliation over the killing of a Hamas leader in Tehran, have provided an element of support for the oil markets.
However, sentiment remains very fragile amid fears slowing economic growth will dent demand, especially as underwhelming U.S. labor market readings ramped up concerns over a potential recession in the country.
The weak U.S. labor readings were preceded by dismal readings from China, especially on the country’s manufacturing sector, added to concerns over slowing demand in the world’s biggest oil importer.
More readings from China are due later this week, with trade data for July in particular focus as it will provide insight into the country’s oil imports.
Saudi energy giant Aramco (TADAWUL:2222) reported a 3.4% decline in its second-quarter net income earlier Tuesday on lower crude volumes.