Wall St set for muted open as tech stocks take a breather

Wall Street's main indexes prepare for a subdued opening on Monday, as technology stocks pull back from record highs and investors seek new signals on monetary policy. Chip stocks led the decline, with Intel falling 3.8% and Micron Technology dropping 0.6%. Nvidia experienced a slight gain of 0.5%, after reaching a record high on Friday.

The tech-focused Nasdaq achieved fresh highs in the prior session following weaker-than-anticipated jobs data, which reduced expectations of a Federal Reserve rate hike during their upcoming meeting. Traders now believe there is an 80% chance the Federal Reserve will keep interest rates unchanged this month, although a rate increase in December remains likely, according to the CME FedWatch tool.

The 10-year U.S. Treasury yield remains near multi-year highs at 5.277%, driven by worries about the government's financial situation, substantial debt issuance, and high energy costs. Brent crude futures slightly increased but hovered near the psychologically significant $100-a-barrel level due to ongoing concerns over disruptions in Gulf oil infrastructure amid the ongoing US-Israel conflict.

Some investors think higher yields could disrupt the equity rally, but Peter Andersen, founder of Andersen Capital Management, believes the market still possesses enough momentum to sustain further interest rate hikes. At 08:13 a.m. ET, Dow E-minis were up 37 points (0.07%), S&P 500 E-minis rose by 1.5 points (0.02%), and Nasdaq 100 E-minis fell by 35 points (0.11%).

Positive corporate sentiment has allowed U.S. stocks to outperform global peers over the past six months, despite geopolitical uncertainties and inflation concerns. The upcoming quarterly earnings season will highlight the performance of companies, with roughly 70% of the S&P 500's market capitalization expected to report by month-end.

Goldman Sachs analysts anticipate that most companies will surpass earnings estimates for the quarter, with a median growth of 9% year-over-year for the median S&P 500 stock. Among the notable gainers on Monday, PTC surged 35.7% following its acquisition by France's Schneider Electric, valued at approximately $22.6 billion. RXO increased 24% after C.H.

Robinson Worldwide finalized a stock-and-cash deal for $5.8 billion to acquire the transportation broker. Cerebras Systems climbed 4.4% after OpenAI CEO Sam Altman confirmed the chip designer's close partnership and deep collaboration in advancing speed technology. Meanwhile, brokerage Panmure Liberum predicts the equity bull market may be nearing its conclusion, projecting the S&P 500 to decline more than 35% by the end of 2027.

However, near-term forecasts remain optimistic, based on year-end targets from leading brokerages. Upcoming readings of two surveys on US services sector activity for September will be released shortly after the markets open.