US stock futures rose Monday morning as investors prepared for a week dominated by the Federal Reserve's policy meeting and earnings reports from major technology firms. The move marked an attempt to recover after the S&P 500 and Nasdaq Composite recorded their second consecutive week of losses.
Futures for the Dow Jones Industrial Average increased by 0.4%, while contracts for the S&P 500 and the Nasdaq-100 both added 0.3%. The market's attention is now fixed on Wednesday, when Alphabet and Microsoft are scheduled to report earnings. Investors are closely monitoring these results to gauge the impact of growing artificial intelligence spending and backlogs on corporate performance, following a recent sell-off in AI-related stocks.
The Federal Reserve's upcoming policy decision is the week's central event. Following inflation data that came in hotter than expected, many experts anticipate that Fed Chairman Kevin Warsh will adopt a hawkish stance. Alan Blinder, a former Fed vice chair and economics professor at Princeton University, described the expected outcome as a "hawkish pause." Blinder argued that the current moment requires clear forward guidance from the central bank. He suggested Warsh should strongly hint that the Fed is pausing rate changes while standing ready to raise rates again, potentially even signaling that the next meeting could bring an interest rate hike. The European Central Bank, the Bank of Canada, and the Bank of Japan are also scheduled to convene their respective policy meetings during this same period.
Oil markets showed volatility as Brent crude futures fell below $110 per barrel on Monday. The global benchmark had reached its highest level since April late last week before dipping. This price action follows Houthi attacks on Saudi Arabia, which stoked energy supply concerns. Prices had settled nearly $3 higher on Friday after the attacks, with Brent finishing the week up 6% and WTI ending 2.3% higher. The Houthis stated they attacked Saudi airport and oil facilities on Saturday, while Saudi Arabia reported intercepting additional missiles and drones on Sunday. The top oil exporter restarted partial operations at its main airport on Sunday after previous damage, even as the militant group vowed to continue targeting the facility.
Investors also watched economic data released Monday, including the Chicago Fed national activity index for September, which was expected to be -0.1 after a prior reading of -0.04, and the Dallas Fed manufacturing activity index for October, which had previously stood at 9.8. The earnings calendar for the day included reports from Verizon Communications, Welltower, Cadence Design Systems, Nucor Corporation, Public Storage, and Amkor Technology.