U.S. Futures Rise Amid Tech Earnings and Fed Rate Decision Anticipation

U.S. index futures climbed on Monday as investors geared up for a busy week marked by a Federal Reserve interest-rate decision, major tech earnings, and crucial labor data. Major tech stocks rebounded slightly in premarket trading. Investors await justification for high valuations and potential Fed rate cuts.

U.S. index futures climbed on Monday after a recent market rout, as investors girded up for a busy week marked by a Federal Reserve interest-rate decision, eagerly awaited tech earnings, and crucial labor data.

In premarket trading, Nvidia, Alphabet, Amazon.com, Meta Platforms, and Tesla were up between 0.5% and 0.8%, following a sell-off in megacap tech shares that sent Wall Street's main stock indexes spiraling down last week. At 5:40 a.m. ET, Dow e-minis were up 109 points, or 0.27%, S&P 500 e-minis were up 15.5 points, or 0.28%, and Nasdaq 100 e-minis were up 84.75 points, or 0.44%.

The three major U.S. stock indexes jumped more than 1% on Friday after an optimistic U.S. inflation report fueled hopes of an early start to monetary policy easing. This came on the heels of data signaling a softening job market. However, the S&P 500 and Nasdaq closed the week lower after disappointing tech earnings led to the steepest one-day drop since 2022 on Wednesday.

The upcoming earnings reports from tech giants like Microsoft, Meta, Apple, and Amazon.com starting Tuesday are highly anticipated. Investors seek justifications for the high valuations and indications that the AI-driven equity rally has further room for growth.

Following Wall Street's record-breaking run since the start of the year, concerns have emerged about Big Tech's dominance. This has led investors to move funds from top-tier stocks to mid and small caps, which are expected to benefit from a low-interest-rate environment. Investors hope the Fed will signal a rate cut in September. Any hawkish commentary from central bank officials could trigger renewed selling pressure on equities.

Bets of a 25-basis-point cut by September have surged to around 88%, up from nearly 60% last month, according to CME's FedWatch Tool. This week's employment reports, such as the Job Openings and Labor Turnover Survey, ADP Employment, non-farm payrolls, and weekly jobless claims, will be scrutinized for concrete signs of an easing labor market.

Other market movers included crypto stocks like Coinbase Global, Riot Platforms, Marathon Digital, and MicroStrategy, each gaining around 4% after bitcoin prices hit a seven-week high. Abbott Laboratories dropped 7.6% after a jury ordered the healthcare company to pay $495 million in damages in a premature-infant formula trial.

(With inputs from agencies.)