Wall Street Operates Cautiously as Oil Prices Decline and the Fed Begins a Key Meeting

International markets are operating cautiously this Tuesday, amid three main focal points: the continued decline in oil prices, the start of the Federal Reserve meeting, and a new wave of corporate earnings that will test the valuations of the technology sector.

Wall Street futures show mixed behavior. The Dow Jones is slightly up, while the S&P 500 and Nasdaq 100 are trading lower, with greater pressure on technology and semiconductor stocks.

Meanwhile, oil extends the sharp correction from Monday, when it recorded its worst session since early April. Brent is down nearly 1.47% and has fallen below $85 per barrel, while West Texas Intermediate is at $81.

The drop in crude oil is due to a lower perception of immediate risk regarding the conflict between the United States and Iran. Although Tehran denied accepting a ten-day ceasefire, direct hostilities are temporarily halted, and both parties have left the door open for negotiations.

U.S. President Donald Trump stated that Washington is holding meetings with Iran and assured that "good things could happen." However, he also warned that the United States will resume intense military actions if talks fail.

Rabobank emphasized that the message still leaves a wide margin of uncertainty, as it is unclear what results the negotiations might yield or whether the Iranian interlocutors have real decision-making power.

Despite the short-term relief, geopolitical risk remains present. In recent hours, new incidents involving drones have been reported in Jordan and Saudi Arabia, while Houthi rebels continue to threaten Saudi oil facilities and ports in the Red Sea.

Attacks on Saudi Aramco's infrastructure in Yanbu, one of the main exit points for Saudi crude to Asia, keep concerns high about supply routes.

The Commonwealth Bank of Australia noted that the recent drop in prices reflects a lower likelihood of immediate escalation, although it warned that differences over the Strait of Hormuz could quickly reignite hostilities.

The maritime passage remains the main focal point of tension, as it carries a significant portion of the oil and gas traded globally.

Iran insists on having a role in controlling maritime traffic, while the United States maintains that the route must remain open without restrictions or mandatory fees. This difference continues to be one of the main obstacles to reaching a more lasting agreement.

On Wall Street, attention is also focused on the Federal Reserve, which began its monetary policy meeting this Tuesday and will announce its decision on Wednesday.

The market assigns a majority probability that the Fed will keep the benchmark rate in the range of 3.50% to 3.75%, although nearly a third of traders still contemplate a 25 basis point increase.

The evolution of energy prices will be one of the main elements under analysis. Although inflation showed signs of moderation in June, the volatility of oil has raised doubts about the possibility of new pressures in the coming months.

The Nasdaq remains the weakest index amid growing concerns about the level of investment directed toward artificial intelligence.

Nvidia's shares fell after reports emerged about a possible financial guarantee of around $250 billion to support an OpenAI data center project. At the same time, the debut of Chinese memory manufacturer CXMT and reports about Apple using Chinese chips increased pressure on the sector.

The Philadelphia Semiconductor index fell 2.2%, signaling the deterioration facing the segment. According to The Wall Street Journal, all companies within the index fell below their 50-day moving average for the first time since April 2025.

The corporate earnings season is also entering one of its most important stages. Before the market opens, Coca-Cola and Boeing will present their accounts, while after the close, it will be Visa and Seagate Technology's turn. However, the main focus will be on the earnings of Microsoft, Meta, Apple, and Amazon.

Investors will be looking for signals regarding the pace of investment in data centers, chips, and infrastructure related to artificial intelligence, and about these companies' ability to start transforming those outlays into sustainable revenues.