US stock futures moved higher on Monday as investors prepared for a pivotal week of central bank policy decisions, following back-to-back weekly declines for the S&P 500 and Nasdaq. S&P 500 futures rose 0.25% to 0.36%, Dow Jones futures gained about 0.31% to 0.49%, and Nasdaq-100 futures advanced 0.29% to 0.55%. Last Friday, the Dow dropped more than 650 points, the S&P 500 lost 0.5%, and the Nasdaq Composite slipped 0.2% as higher oil prices and a broad sell-off weighed on risk assets.
The Federal Reserve, European Central Bank and Bank of Japan will announce rate decisions on Wednesday, Thursday and Friday. Fed funds futures show a 90% probability that the Fed will hold rates at the current range of 3.75% to 4.0%. However, Bank of America expects a quarter-point hike. Economist Claudio Irigoyen described a hike as a 'heavy lift' move and said the October decision will test Fed Chair Warsh's resolve on forward guidance. Irigoyen warned a hike could raise overtightening concerns, while a hold could lead markets to question the Fed's inflation-fighting credibility. The PCE inflation reading, due a day after the Fed decision, is expected at 3.6% — nearly double the 2% target.
Oil prices pulled back from near six-month highs. Brent crude fell about 1.7% to 2.2% to around $114.52–$114.86 per barrel, while West Texas Intermediate declined about 2% to $101.03–$101.08. Reports suggested the US and Israel could plan strikes on Iran after the midterm elections, keeping supply disruption risks in focus.
Brazilian assets sold off sharply after President Luiz Inácio Lula da Silva won re-election, defeating market-favourite Flávio Bolsonaro. US-listed Petrobras shares fell around 22%, Itaú Unibanco slid, and the iShares MSCI Brazil ETF dropped nearly 26% premarket, reflecting concerns over the country's fiscal outlook.
AI-related stocks remained under pressure. Elon Musk warned that more than 200 neocloud companies could face 'guppy-level death and consolidation' as debt markets turn reluctant to finance AI data centre expansion. CoreWeave, Nebius and IREN were lower premarket after already losing more than 30% over the past month; Intel also slipped. Earnings from Microsoft and Alphabet are due Wednesday, and Amazon on Thursday, with investors watching whether AI spending converts into revenue growth.
Asian markets were mixed, with Japan's Nikkei 225 down 0.1% to 0.8%, South Korea's Kospi lower and Hong Kong's Hang Seng up 0.66%. The macro backdrop remains dominated by central bank guidance, oil volatility, and political risk from Brazil, all of which could influence risk assets including cryptocurrencies.
