U.S. stock index futures edged higher on Sunday evening, driven by a temporary truce in the weekend conflict between the U.S. and Iran, which sent international oil prices tumbling. Traders are also closely watching a packed week of major tech earnings and a Federal Reserve meeting that could produce unexpected outcomes.
Dow Jones Industrial Average futures gained 244 points, or 0.5%, while S&P 500 futures rose 0.6% and Nasdaq 100 futures surged 1.2%.
The recent escalation of attacks between the U.S. and Iran over the past two weeks had been escalating, but Iran later signaled it would suspend retaliatory strikes if the U.S. simultaneously ceased military operations. On this news, oil prices fell sharply. International benchmark Brent crude futures dropped over 5%, settling near $92 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 5%, trading around $85 per barrel.
Other geopolitical tensions are also heating up: Ukraine attacked an Iranian civilian merchant ship in the Caspian Sea, prompting Iranian authorities to accuse Kyiv of a "hostile criminal act."
U.S. stocks closed lower again last week, with a chip sector pullback and the uncertainty of the U.S.-Iran conflict weighing on market risk appetite. On Friday, the S&P 500 and Nasdaq each fell 0.6% and 2.1%, respectively, marking the second consecutive weekly decline for both indexes. The Dow Jones index dropped 0.4%, posting its third consecutive weekly loss.
In the coming week, major U.S. indices face multiple tests. After Alphabet's earnings fell short of expectations last week, Amazon, Apple, Meta, and Microsoft are set to release their quarterly reports in quick succession. These earnings will determine whether market concerns over tech companies' massive AI capital expenditures can ease or if anxiety will intensify. The performance will also directly impact the semiconductor sector, which is heavily reliant on AI computing demand.
Ken Mahoney, CEO of Mahoney Asset Management, stated: "The biggest risk is whether AI capital spending can be sustained. If tech giants reduce spending or slow its growth under pressure from shareholders, the entire market will react negatively." He added, "Therefore, the market will show a clear tug-of-war dynamic."
The Federal Reserve will announce its latest interest rate decision on Wednesday. Market expectations are overwhelmingly for a rate hike in September, but data from the CME FedWatch Tool shows traders are already pricing in a significant probability of a 25 basis point hike as early as this week.
(Source: Sina Finance)
Editor: Chen Yujia
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