US stock futures edged higher on Monday, with Nasdaq 100 contracts climbing roughly 100 points (0.3%-0.4%) and S&P 500 futures up about 0.1%, while Dow futures slipped slightly. The cautious optimism follows Friday's record close for the S&P 500, after July payrolls unexpectedly fell by 23,000, sharply reducing expectations for another Federal Reserve rate increase in September.
Brent crude held near $84 a barrel as the Strait of Hormuz remained largely restricted, keeping inflation as the market's biggest unresolved risk. Investors now turn to Wednesday's consumer price index (CPI) report, which could reset the Fed trade.
CPI could reset the Fed trade
Friday's employment report gave equities some breathing room. Nonfarm payrolls fell by 23,000 in July, while May and June were revised lower by a combined 103,000 jobs. The unemployment rate held near 4.1%, but the deterioration in hiring pushed the probability of a September rate increase to around 44%.
Attention now shifts to July consumer prices on Wednesday at 8:30 am ET, followed by producer prices on Thursday. Deutsche Bank analysts see CPI as potentially decisive for September policy pricing. A softer reading would strengthen the case for keeping rates unchanged; a renewed inflation surprise could quickly reverse Friday's bond-market relief.
Hormuz keeps oil from delivering full inflation relief
Iran says its agreement with Oman on new shipping lanes through the Strait of Hormuz is nearing completion, but Tehran has again made a full reopening conditional on concessions from Washington. Commercial traffic through the waterway therefore remains heavily constrained.
Brent traded near $84 a barrel on Monday, well below earlier wartime peaks but high enough to matter for inflation expectations. The key question for Wall Street is whether diplomacy restores physical oil flows, rather than merely producing another negotiating framework. Persistent disruption would leave the Fed balancing a weakening labour market against expensive energy.
JPMorgan says profits can push the S&P 500 to 8,000
Corporate earnings remain the strongest pillar underneath the rally. FactSet said 86% of S&P 500 companies that had reported second-quarter results through Friday beat earnings estimates, while 76% topped revenue forecasts. Even excluding unusually large investment gains at Alphabet and Amazon, earnings growth remains unusually strong.
JPMorgan raised its year-end S&P 500 target to 8,000 from 7,800 on Monday and lifted its 2026 earnings forecast to $365 a share. Its analysts increasingly see stronger cloud growth and expanding backlogs at large technology companies as evidence that enormous AI infrastructure budgets are translating into revenue.
SpaceX leads movers as the AI earnings test continues
SpaceX rose about 3% before the bell after surging 15.8% on Friday, when fears surrounding its first major post-IPO share unlock failed to trigger the expected wave of selling. The shares were trading around $137 in Monday's pre-market session.
The earnings calendar is lighter than last week but still contains important AI infrastructure signals. CoreWeave reports on Tuesday, Cisco follows on Wednesday and Applied Materials is due Thursday. Their outlooks should offer fresh evidence on cloud capacity, networking demand and semiconductor spending after a reporting season that has repeatedly rewarded companies showing tangible returns from AI investment.
Shutdown fears ease, but Congress has unfinished business
One political risk has moved slightly further into the background. The Senate overwhelmingly approved a temporary funding measure that would keep federal agencies operating at current levels through December 11, taking a potential shutdown beyond the November midterm elections. The measure has not yet completed Congress—it still requires approval from the House—so it is premature to describe a shutdown as fully averted.
For more on how the jobs data impacted markets, see our earlier coverage of the Dow slipping while Nasdaq jumped. Also, check out our analysis of the AI-fueled rally and bitcoin's performance relative to equities.
This article is for informational purposes only and does not constitute financial advice.
