By Ragini Mathur and Purvi Agarwal
Oct 12 (Reuters) – Wall St futures were subdued on Monday as investors monitored oil prices and geopolitical developments ahead of crucial bank earnings and inflation data due later in the week that could influence the US Federal Reserve’s interest-rate outlook.
Brent crude futures rose to their highest levels in about two weeks, trading at more than $106 a barrel, after deadly strikes on Riyadh’s international airport over the weekend. [O/R]
The rise was contained, however, after President Donald Trump said Ukraine and Russia had agreed to halt attacks on each other’s energy facilities following a US diesel-supply deal with Moscow. Details of the agreement were not clear and the plan faces opposition in Washington.
“Any hope that Trump’s deal with Putin might help bring down prices has been negated by the flare-up in the Houthi conflict,” said Chris Beauchamp, chief market analyst at IG.
“While earnings season will be a key driver this week, investors should expect oil news to keep making headlines, weighing heavily on sentiment.”
Earnings season begins on Tuesday, with major US banks including Wells Fargo, Goldman Sachs, Citigroup and JPMorgan Chase scheduled to report first.
S&P 500 earnings are expected to jump 30.6% in the third quarter, according to LSEG IBES data.
At 07:12 a.m. ET, Dow E-minis rose 30 points, or 0.06%, S&P 500 E-minis gained 2.25 points, or 0.03%, and Nasdaq 100 E-minis fell 73 points, or 0.23%.
The three major indexes had ended higher last week on optimism around an AI-driven third-quarter earnings season and hope that the Fed may avoid near-term rate hikes.
A handful of AI-linked megacaps were driving an outsized share of returns and market value, but keeping the four-year bull market going, according to Angelo Kourkafas, senior global strategist, investment strategy, at Edward Jones.
“While correction risks are rising as the cycle matures, growing profits and a Fed that may be looking to tap the brakes rather than slam on them suggest the bull market may still have room to run,” Kourkafas said.
Recent data showing a lower-than-expected rise in inflation and weaker jobs growth also helped knock off bets of imminent hikes.
Treasury yields climbed to 24-year highs earlier this month as elevated energy prices stoked concerns inflation could remain sticky, potentially keeping policymakers hawkish and pressuring equity valuations.
The US Treasury market is closed for Columbus Day on Monday.
Investors will also be watching this week’s US consumer and producer price data as well as retail sales figures. Higher energy prices are expected to push headline CPI up 3.7% annually, while core inflation is seen rising at a more modest 2.5% annually.
Markets are pricing in just a 19% chance the central bank will raise interest rates this month, according to CME’s FedWatch tool.
In premarket movers, IREN’s shares rose 3.3% after The Information reported Anthropic had entered into a multi-year cloud deal with the data-center firm.
Salesforce gained 4.2% after BofA Global Research double-upgraded its rating to “buy” from “underperform”.
(Reporting by Ragini Mathur in Bengaluru; Editing by Pooja Desai)
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