Three Major US Stock Index Futures Collectively Narrow Premarket Losses; Dollar Continues to Strengthen on Safe-Haven Sentiment

TradingKey - Pre-market losses for the three major U.S. stock index futures narrowed as safe-haven sentiment retreated from its peak toward rationality. The stabilization of indices was primarily supported by heavyweight stocks and defensive sectors, reversing the downward trend in index futures. Earlier, Nasdaq futures fell by more than 2%; as of press time, the decline had narrowed to 1.2%, while Dow Jones and S&P 500 futures concurrently saw their losses shrink to less than 1%.

The U.S. Dollar Index rose to 98.26, up 0.6% on the day. Analysts at Monex Europe stated in a report that the dollar could extend its gains if the conflict in the Middle East escalates further. They noted that the conflict has triggered risk-off sentiment, rising oil prices, and demand for liquidity. Given the dollar's safe-haven status and U.S. energy independence, this has translated into dollar strength.

The strength of the U.S. dollar has partially driven a localized recovery in U.S. stocks; nevertheless, AI giants led by Nvidia still fell by more than 1% pre-market, while the popular stock Tesla dropped by over 2% pre-market.

UBS noted that Palantir may emerge as a winner in the AI development wave, maintaining a price target of $180, which prompted its shares to rise over 4% pre-market; however, a collective recovery in software stocks driven by this move has not yet been observed.

U.S. Treasuries continue to face accelerated selling pressure, with both short-term and long-term yields rising sharply. This indicates market concerns over escalating geopolitical conflicts and a rise in short-term cash demand, as investors sell Treasuries for dollar liquidity, leading to a decline in bond prices and a corresponding rise in yields.