Futures Rise as Yields and Oil Ease; Constellation Energy Jumps on Google Nuclear Deal

Good morning. This is Trade and Ticker. Tuesday, October sixth, twenty twenty-six. Here's what you need to know before the opening bell.

Daily Catalysts. Four things to watch today. First, the August trade report, out at eight-thirty Eastern. Second, Constellation Energy, the nuclear power producer, which is jumping in early trading after a long-term power deal with Google. Third, Treasury yields and a busy day of Fed speakers, with the thirty-year yield pulling back from its highest level since two thousand two. Fourth, two company events: Marvell Technology's investor day, and Constellation Brands, the beer company behind Corona and Modelo, reporting after the close. We'll get into each of these as we go.

Let's start with U.S. futures. The board is pointing higher this morning, and the gains have grown since early in the session. As of about eight o'clock Eastern, Dow futures are up about seven-tenths of a percent. S-and-P futures are up about half a percent. Nasdaq futures are up about six-tenths of a percent. The Dow is out front this morning, and lower yields and lower oil prices are doing the lifting.

That comes after a good Monday. The Nasdaq finished about one percent higher at a record close, carried by Nvidia and Microsoft. The S-and-P finished about two-thirds of a percent higher and is now just below its mid-August record. The Dow finished about two-tenths of a percent higher. So the question for today is a simple one: can the S-and-P join the Nasdaq at a new high?

Now rates and oil. This is the main reason futures are firmer. The ten-year Treasury yield is down to about five-point-two-seven percent, after finishing Monday above five-point-three. The thirty-year yield is around five-point-six-three percent, after touching its highest level since two thousand two on Monday. Even a small step back from those levels takes some pressure off stock valuations. On the Fed, traders see roughly a four-in-five chance the central bank holds rates steady this month, though a December hike is still mostly priced in. Oil is falling. Brent crude is down about two percent, back below one hundred dollars at roughly ninety-eight. U.S. crude is down about two percent, a bit above eighty-seven dollars. Middle Eastern oil exports have held up better than feared, and the Group of Seven's emergency stockpile release is easing supply worries.

In early trading, a few single names stand out. Option Care Health, the home infusion company, is up more than twenty percent after a Financial Times report that McKesson and the private equity firm Clayton Dubilier and Rice are in advanced talks to buy it, in a deal valued at roughly five billion dollars. McKesson is up about one and a half percent. A-M-D is up nearly two percent after Citi raised its price target to eight hundred dollars, pointing to stronger demand for computer processors driven by A-I agents. Procter and Gamble is up more than one percent after an upgrade from Evercore. Corteva, the crop chemicals company, is up about three percent after an upgrade from JPMorgan. And Nike is lower, down about one percent, after Berenberg downgraded the stock to sell. Among the megacaps, Nvidia is up about one percent and is valued at roughly five-point-eight trillion dollars. Microsoft, Amazon, Meta, and Tesla are all modestly higher. Apple is little changed.

Quickly overseas. Tokyo rose about one percent, and the Nikkei closed above seventy thousand for the first time since July. Hong Kong also gained about one percent, with mainland China still closed for a holiday. Europe is up more than half a percent.

Now let's get into those four things to watch.

First, the trade report at eight-thirty Eastern. Economists expect the August trade deficit to widen to about one hundred two billion dollars, from eighty-eight-point-six billion in July. In July, the gap widened as imports rose on solid demand, and a bigger trade gap subtracts from economic growth on paper. A gap that wide would trim some third-quarter growth estimates. Trade numbers don't usually move the market much on their own, but with yields this high, anything that changes the growth picture gets a look.

Second, Constellation Energy and Google. This is the biggest single-stock story of the morning. Google signed a twenty-year power purchase agreement that will add eight hundred ninety megawatts of new nuclear capacity to the P-J-M grid, which serves the Mid-Atlantic and Midwest. That power comes from upgrades at eleven Constellation nuclear units in Illinois, Pennsylvania, and New Jersey, backed by more than four-point-three billion dollars of new investment from Constellation. The first upgrade is expected by twenty twenty-eight. On top of that, the two companies signed a separate fifteen-year deal covering another two thousand seven hundred megawatts from Constellation's existing plants. Constellation shares are up about seven percent in early trading, and Alphabet is up about half a percent. The bigger point is that the A-I buildout keeps turning into real, long-term contracts for power. Watch whether other power producers and utilities trade higher in sympathy.

Third, yields and the Fed. It's a busy day for Fed speakers. New York Fed President John Williams moderates a session at five past nine Eastern. Fed Vice Chair for Supervision Michelle Bowman speaks at ten forty-five on bank regulation. Kansas City Fed President Jeffrey Schmid speaks at one-fifteen, and Dallas Fed President Lorie Logan moderates a session this evening. Schmid's talk is about monetary policy, so his is the one to watch for comments on rates. With the ten-year and thirty-year yields still near multi-year highs, any hint of more rate hikes could quickly undo this morning's relief. The Fed's September meeting minutes are due tomorrow afternoon.

Fourth, the company calendar. Marvell Technology, the custom chip and networking company, holds its investor day today and is expected to update its long-term financial targets. Investors want to know whether it raises its outlook for custom A-I chips. Marvell is up a little in early trading. Then after the close, Constellation Brands reports quarterly results. Wall Street expects sales of about two-and-a-half billion dollars, and investors will be listening for updates on beer demand and the company's outlook for the year. Different company from Constellation Energy, but both will have the Constellation name in the headlines today.

Here's what would make a higher open fade. Watch three things. First, yields turning back up, especially if a Fed speaker leans toward more hikes. Second, oil bouncing back above one hundred dollars on new Gulf headlines. Third, the rally narrowing to just a handful of megacap tech names while the rest of the market lags. On the other side, steady yields, lower oil, and broad gains would put the S-and-P within reach of a new record.

So here's the picture heading into the open. Futures are higher, led by the Dow. The ten-year yield is down to about five-point-two-seven percent, and Brent crude is back below one hundred dollars. Constellation Energy is jumping on its Google nuclear deal, and Option Care Health is surging on buyout talk. And Fed speakers are on deck all day.

We'll be back at midday with the lunch show: whether the S-and-P can push toward a record, how yields react to the Fed speakers, and what to expect from Constellation Brands after the close. Thanks for listening. I'm Trade and Ticker.