(Bloomberg) — US equity-index futures advanced and crude oil retreated after a volatile week, with investors bracing for megacap earnings that will test the artificial intelligence trade and key central bank decisions.
Nasdaq 100 Index futures rose 0.5% and contracts for the S&P 500 Index gained 0.3% in early Monday trading, rebounding after the AI trade came under intense pressure last week and a key US chip gauge posted its longest losing streak since November. Asian stocks looked set for a mixed start.
Providing support, global crude oil benchmark Brent dropped 0.7% from a six-month high to about $115.85 a barrel. US President Donald Trump said it’s “getting to be decision time” on whether to reach a deal with Tehran or resume attacks as threats from Iran and the Houthis against Americans in the Middle East mount.
Elsewhere, the dollar held steady against its Group-of-10 peers, having edged lower for two consecutive weeks. The euro was quoted a touch higher after France dodged a downgrade at Moody’s Ratings. Brazilian assets were in focus as President Luiz Inácio Lula da Silva faces off with challenger Flávio Bolsonaro in the runoff election.
Investors face another pivotal week after a volatile stretch for the AI trade, with earnings from Microsoft Corp., Alphabet Inc. and Amazon.com Inc. set to test confidence in the sector. Federal Reserve and Bank of Japan policy decisions will add to the week’s major catalysts as officials contend with stubborn inflation, higher energy costs and elevated bond yields globally.
“Global markets are preparing for another big week,” Nick Twidale, chief market analyst at AT Global Markets in Sydney, wrote in a note. The focus is “set to shift back towards central banks and interest rates after several weeks of geopolitical headlines dominating market moves.”
The Fed and its peers in the euro zone and Japan will probably keep rates steady in the coming week, opting to bide their time before potential further hikes. Three days of decisions starting on Wednesday in Washington are likely to affirm a hawkish stance balanced by a measured pace as policymakers confront inflation risks ranging from surging energy prices to the AI boom.
The Fed raised rates in September for the first time since 2023 and signaled another increase was likely this year. While US inflation has remained elevated, officials have indicated little urgency to move again this week, with economists and investors expecting the next increase in December.
In Asia, South Korean stocks will be in focus after Goldman Sachs Group Inc. strategists slashed their target for the Kospi Index by 25%, as concerns over the artificial intelligence trade intensify.
Geopolitical risks are also likely to remain elevated heading into next month. Trump has suggested US strikes on Iran could resume after the Nov. 3 midterm elections, while officials have warned the period between the vote and the new Congress taking office could be particularly dangerous.
The US is reducing diplomatic and military staffing in parts of the Middle East as threats from Iran and the Iran-backed Houthi militants in Yemen increase. The Houthis have repeatedly targeted Riyadh airport, which reopened Sunday for commercial flights.
“All indications point to a resumption of war and a major bombing campaign, although the timing remains uncertain,” said Aslı Aydıntaşbaş, an expert on the Middle East at the Brookings Institution.
Corporate Highlights:
Elon Musk said SpaceX has closed a $40 billion debt deal to pay for the chips it needs to fuel its artificial intelligence ambitions. However, people familiar with the matter said the parties were still engaged in pricing discussions as of Sunday and the deal had not yet closed. Netflix Inc. users are watching the streaming service less than they once did, the latest sign of engagement woes for the world’s most valuable entertainment company, according to people familiar with the matter. Volkswagen AG plans to build a new $4 billion factory for its premium Audi brand in the southern US state of Georgia. Suzhou Dongshan Precision Manufacturing Co. a printed circuit board maker, raised about HK$9.9 billion ($1.3 billion) in Hong Kong’s biggest listing in nearly two months. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 8:13 a.m. Tokyo time Hang Seng futures were little changed Australia’s S&P/ASX 200 fell 0.8% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was unchanged at $1.1202 The Japanese yen was little changed at 156.99 per dollar The offshore yuan was unchanged at 6.6690 per dollar The Australian dollar was little changed at $0.7029 Cryptocurrencies
Bitcoin was little changed at $80,313.73 Ether fell 0.4% to $2,335.08 Bonds
Australia’s 10-year yield advanced five basis points to 5.21% Commodities
West Texas Intermediate crude fell 0.9% to $102.33 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
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