Why Texas is betting 'Y'all Street' can take on Wall Street

The US stock market saw a rise on Monday as tensions in the Middle East appeared to ease, lowering crude oil prices. Dow E-minis increased by 0.89%, S&P 500 E-minis by 0.54%, and Nasdaq 100 E-minis by 0.28%. The drop in crude prices was attributed to reports of possible merger talks between Bristol Myers Squibb and AstraZeneca, which could result in one of the world's largest drugmakers worth nearly $400 billion.

Shares of Bristol Myers Squibb rose 6% in premarket trading, while AstraZeneca declined 5%. Meanwhile, US President Donald Trump announced talks with Iran to reopen the Strait of Hormuz on Monday, but Iran disagreed. Brent crude prices fell by 5%, and the yield of the two-year Treasury note decreased by 5.4 basis points. With higher energy costs and ongoing inflation, investors are still concerned about the potential impact on the global economy.

The upcoming earnings reports from major tech companies like Amazon and Microsoft, along with other AI-linked firms, will be closely watched. Additionally, government debt, increased issuance, and persistent inflation have raised the cost of capital, making earnings the primary driver of returns. Other sectors like healthcare, consumer, and energy will also be scrutinized, with earnings from companies such as Eli Lilly, McDonald's, and Occidental Petroleum scheduled for release.

The week will also feature several labor market reports, including the official nonfarm payrolls figures on Friday and a business activity survey to gauge the health of the manufacturing sector in July. Traders are also monitoring potential currency interventions by the US and Japan to stabilize the yen.