Most Important News

1. Geneva Talks End as Iran Conducts Military Drills;
2. "Long Energy + Short Consumer Discretionary" Pair Trade Gains Popularity;
3. Tech Giants Slide After Holiday Break;
4. Micron Technology Invests $200 Billion to Address AI Memory Bottleneck;

Stock futures were trading lower Tuesday as Wall Street struggles to regain its footing after yet another losing week. Technology stocks, including beaten-down software names, led the early selling.

As of 08:52 EST (or 4:52 PM in Riyadh), Futures tied to the S&P 500 were down 0.15%, while Nasdaq 100 futures shed 0.49%. Dow Jones Industrial Average futures traded flat.

As of 04:52 PM Riyadh Time, top pre-market movements are as follows:

Geneva Talks End as Iran Conducts Military Drills

The Wall Street Journal reports that Iran proposed pausing uranium enrichment, relocating some uranium offshore, and pursuing US commercial deals to advance nuclear talks and avoid strikes. However, US President Trump’s approval hinges on Iran fully halting enrichment. Meanwhile, the AP notes Iran launched live-fire drills near the Strait of Hormuz, hitting targets with missiles. KCM Trade analysts highlight cautious markets amid US-Iran tensions and limited catalysts.

"Long Energy + Short Consumer Discretionary" Pair Trade Gains Popularity

Bloomberg strategist Simon White highlighted that US energy stocks have surged over 20% this year, driven by oil price rebounds, outperforming all other sectors, including tech. Meanwhile, investors are shorting consumer discretionary stocks, including Amazon.com, Inc.(AMZN.US) and Tesla Motors, Inc.(TSLA.US), as well as traditional retail names. Analysts suggest this trend reflects a reassessment of sector outlooks and a shift toward physical asset allocation amid inflation concerns.

Global Investors' Optimism Amid Over-Investment Fears

Bank of America's survey reveals investors are "extremely optimistic," yet worry companies are over-investing as asset gains become harder.

Goldman Sachs Optimistic on Software Earnings Amid "AI Panic Trading"

Goldman Sachs, led by strategist Ben Snider, reports a 5% rise in two-year forward earnings expectations for software stocks over the past three months. Despite AI disruption concerns, industries most threatened by AI have seen upward revisions in 2026 earnings forecasts and double-digit growth in recent quarterly earnings. Snider notes that software stocks at the center of AI worries have exceeded expectations, prompting analysts to revise forecasts upwards.

Tech Giants Slide After Holiday Break

US tech giants saw pre-market declines as traders returned from holiday. The major players all experienced losses: Apple Inc.(AAPL.US) fell 0.3%, Microsoft Corporation(MSFT.US) dropped 0.62%, Meta Platforms(META.US) decreased 0.58%, Amazon.com, Inc.(AMZN.US) slipped 0.33%, Tesla Motors, Inc.(TSLA.US) fell 1.23%, NVIDIA Corporation(NVDA.US) declined 0.95%, and Alphabet Inc. Class C(GOOG.US) slid 1.71%. Investors expressed concerns over high capital spending by major cloud providers and questioned returns. Software stocks also declined amid scrutiny of AI's disruptive impact across industries.

Oil Stocks Rise, Gold and Storage Stocks Fall Pre-Market

Crude oil prices rose due to Iranian military drills, lifting US oil stocks pre-market: Murphy Oil Corporation(MUR.US), EOG Resources, Inc.(EOG.US), and Occidental Petroleum Corporation(OXY.US) gained over 1%. Gold prices fell on Trump's negotiation signals, dragging gold stocks down: Harmony Gold Mining Co. Ltd. Sponsored ADR(HMY.US) dropped over 4%, Coeur Mining, Inc.(CDE.US) fell more than 3%, and Newmont Corporation(NEM.US) slipped nearly 3%. Storage stocks also declined, with Micron Technology, Inc.(MU.US) and Sandisk Corporation(SNDK.US) losing over 2%, and Western Digital Corporation(WDC.US) and Seagate Technology Holdings PLC(STX.US) down over 1%.

Micron Technology Invests $200 Billion to Address AI Memory Bottleneck

Micron Technology is investing $200 billion to expand capacity amid the worst supply shortage in over 40 years. In Boise, the company plans to double its campus size, spending $50 billion to build two new chip factories. The first factory is expected to produce silicon wafers by mid-2027 for DRAM, essential for high-bandwidth memory (HBM) chips crucial to advanced AI computing. Both factories are slated to be operational by the end of 2028.

Alibaba Shares Rise on New AI Model Launch

Alibaba Group Holding Ltd. Sponsored ADR(BABA.US) shares rose nearly 1% pre-market after launching the Qwen3.5-Plus model, rivaling Gemini 3 Pro as the top open-source model. It features hybrid attention mechanisms, sparse MoE architecture, and enhanced stability, enabling powerful AI with less computing power. The model can interpret screens and autonomously perform tasks, including converting sketches to code. API pricing is as low as ¥0.8 per million tokens, just 1/18 of Gemini's cost.

Anthropic's AI Used in Venezuela Raid with Palantir

The Wall Street Journal reported that Anthropic deployed its AI model "Claude" during the US military's January 3 operation to detain Venezuelan President Maduro. The deployment was facilitated through collaboration with Palantir(PLTR.US). Claude had previously been used for satellite images and intelligence analysis. Anthropic is negotiating with the Pentagon to limit its AI's use in surveillance and autonomous weapons, while the military seeks broader application rights.

General Mills Drops Over 3% Pre-Market on Lower Forecasts

General Mills, Inc.(GIS.US) fell over 3% pre-market after lowering its annual sales and profit forecasts, citing weak consumer sentiment. The company now expects sales to decline 1.5%-2%, compared to the prior range of -1% to +1%. Adjusted operating profit and EPS, at constant currency, are projected to drop 16%-20%, worse than the previous estimate of a 10%-15% decline.

Medtronic Falls Nearly 3% Pre-Market on Disappointing Guidance

Medtronic Plc(MDT.US) dropped nearly 3% pre-market as its full-year guidance fell short of expectations. Q3 revenue reached $9 billion, up 8.7% year-over-year, beating estimates by $110 million. Adjusted EPS was $1.36, surpassing forecasts by $0.02. The company reaffirmed its FY2026 organic revenue growth forecast of about 5.5% and adjusted EPS between $5.62 and $5.66, below the consensus of $6.12. This includes a potential $185 million tariff impact, consistent with prior estimates. Excluding tariffs, adjusted EPS growth for FY2026 is projected at approximately 4.5%.

• ZIM Integrated Shipping Services Ltd.(ZIM.US) surged 35% pre-market after German shipping company Hapag-Lloyd announced a cash acquisition valued at approximately $4.2 billion.