US stock futures pointed to a higher open on Monday, recovering some ground after last week's sell-off. Dow Jones futures gained 0.49%, S&P 500 futures rose 0.36%, and Nasdaq-100 futures climbed 0.55%, equivalent to about 160 points.
Last week, the S&P 500 and Nasdaq Composite posted their second consecutive weekly losses, with all three major indexes closing lower on Friday. The rebound comes as investors shift focus to the Federal Reserve's policy meeting and a wave of earnings from major technology companies.
Brazil stocks plunge after Lula's victory
Brazilian equities are set for a sharp decline after Luiz Inácio Lula da Silva won a fourth presidential term, defeating market-favorite Flávio Bolsonaro in Sunday's runoff. US-listed shares of Brazilian companies tumbled in premarket trading, with Petrobras falling around 22% and Itaú Unibanco and other financial stocks sliding sharply. The iShares MSCI Brazil ETF dropped nearly 26%.
The sell-off reflects investor concerns about Brazil's fiscal outlook, as markets had positioned for a Bolsonaro win and the prospect of tighter spending, deregulation, and economic reforms.
Musk warns of neocloud shakeup
Elon Musk has cautioned that more than 200 neocloud companies could face what he described as “guppy-level death and consolidation,” as debt markets become increasingly reluctant to finance businesses heavily dependent on AI data centers. CoreWeave, Nebius, and IREN were lower in premarket trading after already losing more than 30% of their market value over the past month.
The warning adds to concerns about whether the massive investments in AI infrastructure will generate sufficient returns, particularly as rising borrowing costs make debt-funded expansion more expensive.
Oil pulls back after last week's surge
Crude oil prices retreated after reaching near six-month highs last week amid concerns about supply disruptions linked to the Middle East conflict. Brent crude fell around 1.7% to $114.86 a barrel, while US West Texas Intermediate declined 2% to $101.08.
The pullback offered some relief to risk assets after higher energy prices had added to inflation concerns and weighed on investor sentiment. However, uncertainty around regional supply routes and the possibility of further disruption remain important risks for markets.
Asian markets show tech weakness
Asian markets continued to show weakness in technology and semiconductor stocks on Monday, reflecting lingering doubts about the sustainability of AI spending. Japan's Nikkei 225 fell 0.80%, with chip-related stocks including Screen Holdings and Kokusai Electric dropping more than 4%. South Korea's Kospi declined 1.46%, while the Kosdaq lost 3.62%. Samsung Electronics fell 1.16%.
The weakness follows last week's losses on Wall Street and comes as investors await earnings from major technology companies for clues about whether their AI investments can deliver stronger growth and profitability.
Earnings and Fed in focus
Verizon's third-quarter results, released before the opening bell, kicked off a busy week of corporate earnings. The stock was up 2% after it reported an earnings beat for the third quarter.
Investors will turn their attention to Microsoft and Alphabet on Wednesday, followed by Amazon on Thursday, as they look for evidence that rising AI spending is translating into revenue growth, margins, and cash flow.
The Federal Reserve's two-day meeting begins Tuesday, with its rate decision due Wednesday. Markets widely expect the central bank to hold rates steady following its September hike, although investors will scrutinize officials' comments for clues about the outlook for borrowing costs.
This article is for informational purposes only and does not constitute financial advice.
