US stock futures moved higher on Monday as investors prepared for a crucial week of corporate earnings, the Federal Reserve's interest-rate decision and major economic data releases. Wall Street attempted to recover from recent losses in technology shares, with attention turning to whether America's largest technology companies can justify their substantial investments in artificial intelligence.
At 9.05 am Eastern Time, futures linked to the Dow Jones Industrial Average rose 208 points, or 0.4 per cent, while S&P 500 futures gained 0.34 per cent. Nasdaq 100 futures advanced 0.6 per cent, supported by gains in several major technology and semiconductor companies.
The positive opening indications followed a difficult period for US equities, particularly technology and AI-linked stocks, as investors questioned whether rapidly expanding expenditure on data centres and computing infrastructure would generate sufficient profits.
Oil prices also eased on Monday following diplomatic efforts to reduce tensions in the Middle East, providing some relief to investors concerned about inflation and energy costs.
๐๐ถ๐ด ๐ง๐ฒ๐ฐ๐ต ๐ฒ๐ฎ๐ฟ๐ป๐ถ๐ป๐ด๐ ๐ถ๐ป ๐ณ๐ผ๐ฐ๐๐
Approximately one-third of the companies in the S&P 500 are scheduled to report quarterly earnings this week, making it an important period for assessing the health of corporate America.
Technology giants Microsoft and Alphabet are due to announce their results on Wednesday, followed by Amazon on Thursday. Investors will examine revenue growth, profitability, cloud computing performance and spending on artificial intelligence.
The earnings reports are expected to provide a clearer picture of whether the billions of dollars being invested in AI infrastructure are translating into sustainable business returns.
The scrutiny has intensified following a disappointing market response to earnings announcements from several AI-linked companies last week.
Meta raised its annual AI spending forecast and announced plans to raise as much as USD 95 billion through equity financing to support its expansion of data centres, cloud computing capacity and related infrastructure.
The announcement highlighted the enormous financing requirements associated with the AI industry, even as investors increasingly demand evidence of profitability.
Tesla also faced pressure following its quarterly results, although its shares recovered in premarket trading on Monday after Barclays upgraded the stock from equal-weight to overweight. Tesla gained approximately 2.5 per cent before the opening bell.
๐๐ ๐ถ๐ป๐ณ๐ฟ๐ฎ๐๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ ๐๐๐ผ๐ฐ๐ธ๐ ๐๐ป๐ฑ๐ฒ๐ฟ ๐ฝ๐ฟ๐ฒ๐๐๐๐ฟ๐ฒ
Companies specialising in AI computing infrastructure continued to face selling pressure amid concerns over debt-funded expansion and rising financing costs.
CoreWeave and Nebius have each lost more than 30 per cent of their market value during October, reflecting growing uncertainty over the financial sustainability of large-scale AI infrastructure projects.
CoreWeave shares declined approximately 3.9 per cent in premarket trading, while Nebius fell around 1.7 per cent.
The weakness followed comments by billionaire Elon Musk, who warned that financial markets had become increasingly reluctant to provide capital to businesses lacking substantial revenue outside AI data centre operations.
Musk also suggested that consolidation could accelerate among smaller AI infrastructure providers as financing conditions tighten.
The concerns have emerged despite continued demand for advanced computing capacity, highlighting the distinction between rapid technological expansion and the ability of companies to generate adequate returns on investment.
Meanwhile, semiconductor companies showed signs of recovery. Nvidia, Advanced Micro Devices and Intel each gained more than one per cent in premarket trading.
AI company Anthropic's plans for a public offering also attracted investor attention, bringing renewed focus to the opportunities and financial challenges facing the sector.
๐๐ฒ๐ฑ ๐ฟ๐ฎ๐๐ฒ ๐ฑ๐ฒ๐ฐ๐ถ๐๐ถ๐ผ๐ป ๐ฎ๐๐ฎ๐ถ๐๐ฒ๐ฑ
The Federal Reserve's monetary policy decision on Wednesday is another major event for financial markets. The US central bank is widely expected to leave interest rates unchanged following its September increase, although investors remain alert to the possibility of another hike in December.
The federal funds target range currently stands at 3.75 to 4 per cent. Persistent inflation has complicated the central bank's efforts to balance price stability with economic growth.
Investors will closely examine comments from Federal Reserve Chair Kevin Warsh for indications of how policymakers assess inflation, economic activity and the future direction of borrowing costs.
Markets are also awaiting September inflation figures and third-quarter US gross domestic product data, both scheduled for release on Thursday. The economic reports could influence expectations about interest rates over the coming months.
๐ข๐ถ๐น ๐ฝ๐ฟ๐ถ๐ฐ๐ฒ๐ ๐ฟ๐ฒ๐๐ฟ๐ฒ๐ฎ๐ ๐ฎ๐บ๐ถ๐ฑ ๐ฑ๐ถ๐ฝ๐น๐ผ๐บ๐ฎ๐๐ถ๐ฐ ๐ฒ๐ณ๐ณ๐ผ๐ฟ๐๐
Crude oil prices declined on Monday after climbing sharply during the previous week amid renewed tensions in the Middle East.
Brent crude fell as diplomatic efforts gathered pace to prevent further escalation involving Iran and regional powers. Saudi Arabia joined Turkey and Pakistan in discussions with Iranian officials in Tehran aimed at reducing tensions and maintaining communication channels.
The decline in oil prices provided some relief to equity markets, although concerns over potential supply disruptions remained.
Higher energy prices have added to inflationary pressures in the United States, making developments in the Middle East particularly important for investors assessing the Federal Reserve's policy outlook.
๐๐ป๐๐ต๐ฟ๐ผ๐ฝ๐ถ๐ฐ ๐ณ๐ถ๐น๐ฒ๐ ๐ณ๐ผ๐ฟ ๐๐ฃ๐ข
In another major development, artificial intelligence company Anthropic filed for a US initial public offering on Monday, drawing attention to the rapid growth and financing requirements of the AI industry.
The company's filing outlined its ambitions to develop advanced AI systems while acknowledging the substantial costs and operational challenges associated with the technology.
According to the filing details reported by The Economic Times, Anthropic's customer base includes every Fortune 10 company, more than half of the Fortune 500 and over 30 per cent of the Global 2000 among customers generating at least USD 100,000 in trailing 12-month revenue as of September 30.
Goldman Sachs, Morgan Stanley, JPMorgan and Citigroup are among the underwriters associated with the offering.
The development comes at a time when investors are reassessing the valuations of AI companies and questioning whether rapid revenue growth can justify the enormous capital expenditure required to build advanced computing systems.
๐ ๐ฎ๐ฟ๐ธ๐ฒ๐๐ ๐ณ๐ฎ๐ฐ๐ฒ ๐ฐ๐ฟ๐๐ฐ๐ถ๐ฎ๐น ๐๐ฒ๐ฒ๐ธ
Beyond technology earnings and the Federal Reserve meeting, investors are monitoring the November 3 US midterm elections, developments in the Middle East and changing expectations for global economic growth.
The European Central Bank and the Bank of Japan are also scheduled to announce policy decisions this week, adding to the number of events that could influence financial markets.
While Monday's futures movements indicated a cautiously positive opening, the performance of technology companies and the Federal Reserve's guidance are expected to shape investor sentiment in the coming sessions.
With AI spending, borrowing costs and geopolitical risks all under scrutiny, Wall Street faces an important test of whether corporate earnings can support valuations after recent market volatility.