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Exchange-Traded Funds, Equity Futures Lower Pre-Bell Tuesday as AI Spending Concerns Weigh on Technology Shares

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The broad market exchange-traded fund SPDR S&P 500 ETF Trust (SPY) was down 1.4%, and the actively traded Invesco QQQ Trust (QQQ) retreated 3% in recent Tuesday premarket activity, amid a broad technology selloff fueled by concerns over borrowing costs and heavy spending on artificial intelligence infrastructure.

US stock futures were also lower, with S&P 500 Index futures down 1.4%, Dow Jones Industrial Average futures slipping 0.5%, and Nasdaq futures retreating 3% before the start of regular trading.

The S&P Global flash readings for June manufacturing and services conditions are due to be released at 9:45 am ET.

The state-level unemployment data for May and the Richmond Fed's services and manufacturing readings for June will be released at 10:00 am ET.

In premarket action, bitcoin was down by 4.4%. Among cryptocurrency ETFs, the cryptocurrency fund ProShares Bitcoin Strategy ETF (BITO) was 3.4% lower, Ether ETF (EETH) retreated by 5.5%, and Bitcoin & Ether Market Cap Weight ETF (BETH) was flat.

Power Play:

Technology

The State Street Technology Select Sector SPDR ETF (XLK) retreated 3.8%, and the iShares US Technology ETF (IYW) was 3.5% lower, while the iShares Expanded Tech Sector ETF (IGM) was down 3.4%. Among semiconductor ETFs, the State Street SPDR S&P Semiconductor ETF (XSD) declined by 5.8%, while the iShares Semiconductor ETF (SOXX) fell by 7%.

International Business Machines (IBM) shares were up more than 4% in recent premarket activity after the company said it joined the OpenAI Daybreak Cyber Partner program.

Winners and Losers:

Financial

The State Street Financial Select Sector SPDR ETF (XLF) was down 0.2%. Direxion Daily Financial Bull 3X Shares (FAS) retreated by 1.1%, while its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), was 0.1% higher.

Robinhood Markets (HOOD) shares traded down 5.6% in early hours activity after the online investment platform priced a private $2 billion offering of non-interest-bearing senior convertible notes, due Oct. 1, 2029.

Consumer

The State Street Consumer Staples Select Sector SPDR ETF (XLP) was up 1.5%, the Vanguard Consumer Staples Index Fund ETF Shares (VDC) was gaining by 0.2%, and the iShares US Consumer Staples ETF (IYK) was flat. The State Street Consumer Discretionary Select Sector SPDR ETF (XLY) lost 0.9%. The VanEck Retail ETF (RTH) was inactive, while the State Street SPDR S&P Retail ETF (XRT) retreated by 0.6%.

Tesla (TSLA) shares were down 2.7% pre-bell, following a 1.1% gain at the previous day's close. NatPower said it has signed a multiyear supply and execution deal with Tesla for more than 25 gigawatt-hours of battery energy storage systems in Italy and the UK.

Health Care

The State Street Health Care Select Sector SPDR ETF (XLV) advanced 0.7%, the Vanguard Health Care Index Fund (VHT) was up 0.4%, while the iShares US Healthcare ETF (IYH) was up 2%. The iShares Biotechnology ETF (IBB) was down 0.7%.

Natera (NTRA) stock was down more than 2% premarket, extending the 1.1% decline at the prior close. The company said it has received a Category 1 recommendation from the National Comprehensive Cancer Network for Signatera-guided adjuvant atezolizumab treatment in patients with muscle-invasive bladder cancer.

Energy

The iShares US Energy ETF (IYE) was down 0.03%, while the State Street Energy Select Sector SPDR ETF (XLE) was up by 0.2%.

Energy Fuels (UUUU) stock was down more than 2% before market open after the company agreed to acquire Germany's Vaccumschmelze and associated business and subsidiaries from Ara Partners for $1.9 billion in cash and stock.

Industrial

The State Street Industrial Select Sector SPDR ETF (XLI) declined by 1.2%, while the Vanguard Industrials Index Fund (VIS) was up less than 0.1% and the iShares US Industrials ETF (IYJ) was flat.

A. O. Smith (AOS) stock little changed before the opening bell. The company said its board has elected Stephen Shafer, president and chief executive officer, as chairman, effective July 1, after Executive Chairman Kevin Wheeler retires.

Commodities

Front-month US West Texas Intermediate crude oil retreated by 0.3% to $73.60 per barrel on the New York Mercantile Exchange. Natural gas was down by 1.6% to $3.20 per 1 million British Thermal Units. The United States Oil Fund (USO) declined by 1%, while the United States Natural Gas Fund (UNG) was 1.5% lower.

Gold futures for July were down by 1.6% to $4,134.70 an ounce on the Comex. Silver futures retreated by 5.1% to $62.21 an ounce. SPDR Gold Shares (GLD) declined by 2%, and the iShares Silver Trust (SLV) was 4.9% lower.

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Commodities

US Rig Activity Holds Steady as Private Operators Expand Market Share, RBC Says

US drilling activity remained largely stable last week as operators maintained activity levels across major shale basins, RBC Capital Markets said in a Friday note.The Baker Hughes (BKR) US land rig count increased by one rig to 551. Rigs drilling for oil rose by one to 423, while rigs targeting natural gas also increased by one to 122, according to RBC.The Permian Basin held steady at 256 rigs, representing 61% of Lower 48 oil rigs and 46% of total US land rigs. Exxon (XOM) led operators with 34 rigs, followed by Devon (DVN) with 21 and Occidental (OXY) with 20.Private companies accounted for 43% of active Permian rigs, up from 42% a year earlier. Helmerich & Payne (HP) remained the leading contractor with 90 rigs, while Patterson-UTI (PTEN) and Nabors (NBR) operated 31 and 29 rigs, respectively.Eagle Ford activity remained unchanged at 44 rigs. ConocoPhillips (COP) operated seven rigs and EOG Resources (EOG) ran six, while private operators increased their share of active rigs to 45% from 42% a year ago.The Anadarko Basin added one rig over the week to reach 20. Continental remained the largest operator with eight rigs, followed by Mewbourne with seven, while private companies controlled 92% of active rigs.Haynesville drilling activity held steady at 55 rigs. Apex led operators with 13 rigs and Adamas followed with six, while private operators expanded their share to 73% from 66% a year earlier.Helmerich & Payne operated 11 rigs in Haynesville, ahead of ICD with nine, Precision Drilling (PDS) with eight and TG Natural Resources with six.Across the US market, private operators accounted for 57% of active rigs, up from 55% a year earlier. The six largest drilling contractors controlled 72% of active rigs nationwide.Oilfield services stocks fell 9.2% over the week as West Texas Intermediate crude dropped 13.1%. EFX-CA gained 1.6%, while SLB (SLB) and Nabors declined 14.1% and 14.6%, respectively, RBC said.

$BKR$COP$DVN$HP$NBR$OXY$PDS$PTEN$SLB$XOM
Commodities

US DOE Awards 500,000 Barrel SPR Crude Exchange to Vitol

The US Department of Energy awarded a contract covering 500,000 barrels under its Strategic Petroleum Reserve crude exchange program to commodity trader Vitol, according to award information released Monday.The award was made under a Request for Proposals seeking the exchange of up to 40 million barrels from the SPR.As of June 22, the Department of Energy said Vitol had been awarded a contract covering 500,000 barrels.The solicitation covers up to 40 million barrels of sour crude from the Strategic Petroleum Reserve's Bryan Mound and Big Hill sites. The DOE said offers will compete on overall value to the government.DOE plans to supply 8 million barrels from Bryan Mound in July 2026 and another 7 million barrels in September 2026. Both exchange programs require a minimum return volume of 3 million barrels per month.At Big Hill, DOE is offering 11 million barrels in August 2026 and 14 million barrels in September 2026. The associated return periods begin in 2027 and extend into 2028, according to the department.DOE said bidders are responsible for securing sufficient pipeline and terminal capacity, adding that lower inventory levels could reduce delivery rates and require buyers to manage any resulting logistical constraints.DOE said Strategic Petroleum Reserve crude includes a blend of domestic and international grades, including Isthmus, Urals, Alaskan North Slope, Arabian Light, Saharan and Dubai crude streams.The agency requires returned crude to meet quality specifications and reserves the right to reject barrels that fail compatibility standards. Offerors must submit quality information 90 days before the return period begins.DOE said that oils with elevated light-end gas content or vapor pressure could affect storage integrity and limit the reserve's ability to deliver oil when needed.The minimum offer size stands at 3 million barrels for both pipeline and vessel deliveries. DOE said awards to a single bidder generally will not exceed 20 million barrels unless additional volumes remain available.The notice did not disclose financial terms or delivery schedules for the Vitol award, nor did it mention whether additional awards may be made under the solicitation.

Commodities

US Natural Gas Update: Futures Edge Up on Hotter Early July Forecasts

US natural gas futures continued to decline from earlier highs but managed to remain in positive territory in after-hours trade on Monday, despite forecasts for hotter weather across much of the country that point to stronger demand.The front-month Henry Hub contract and the continuous contract rose by 0.15% to $3.238 per million British thermal units.Barchart said natural gas prices rallied to a three-week high in the nearest futures contract on Monday as weather forecasts signaled increased cooling demand. It cited the Commodity Weather Group on Monday, which said above-average temperatures are expected across most of the US from July 2-6.Forecasts also indicate Lower 48 population-weighted temperatures are expected to rise above the 10-year seasonal average during the first week of July after generally below-average temperatures prevailed through much of June, Aegis Hedging said Monday.Warmer summer weather typically increases electricity demand for air conditioning, boosting natural gas consumption by power generators.On the supply side, US dry gas production remained steady at a robust 109.5 billion cubic feet per day, Aegis said, citing data from S&P. Barchart, citing BNEF data, said Lower 48 dry gas production on Monday was 109.6 Bcf/d, up 1.5% from a year earlier.Regarding demand, BNEF said US gas demand on Monday totaled 71.0 Bcf/d, down 2.0% from a year earlier. Celsius Energy said power burn on June 20 was 34.2 Bcf/d, down 2.5 Bcf/d from the previous day and down 1.2 Bcf/d from the same day last year.Over the preceding seven-day period, natural gas accounted for 39% of the fuel mix, up 1 percentage point from a year earlier, according to Celsius Energy. The week ending June 20 saw power burn average 35.8 Bcf/d, down 1.7 Bcf/d from the comparable period a year ago.Meanwhile, estimated LNG net flows to US LNG export terminals were 19.3 Bcf/d on Monday, up 0.9% from the prior week, according to BNEF. Feedgas volumes have remained mainly above 19 Bcf/d since June 14 as the maintenance schedules among LNG facilities on the US Gulf Coast wind down.On the export side, Gelber & Associates said Europe, the primary destination for US LNG, continues to show strong demand and is currently experiencing a heatwave of undetermined duration.Looking ahead at the US market, Gelber & Associates said: "For now, July appears to be building a firmer base above $3.00, but a sustained move higher likely needs heat to keep expanding across major load centers and storage injections to come in lighter than expected over the next couple of reports."