As Earnings Week begins, US Futures Pare Gains – Europe Market Wrap
US equity futures pulled back from their highs at the start of the week as investors looked ahead to earnings from Nvidia and the release of long-delayed economic data.
Futures on the S&P 500 struggled to hold on to gains following a volatile stretch for stocks. The advance in Nasdaq 100 contracts was stronger, with Alphabet climbing 5.5% in premarket trading after Berkshire Hathaway disclosed a $4.9 billion stake. Bitcoin rebounded after erasing its year-to-date gains. Treasuries strengthened across the curve, while the Dollar edged higher.
While AI bellwether Nvidia is scheduled to report on Wednesday, earnings from Target and Walmart in the coming days will provide insight into the health of consumers. Statistical agencies will also start working through a backlog of reports, including September’s jobs figures.
Only late last week did government financing resume following a 43-day shutdown. The delay has given policymakers limited view into the economy, causing some Fed officials to warn that it may complicate decisions on an interest-rate decrease next month.
Markets are recovering from last week’s volatility, which was fuelled by concerns that this year’s rise has become overly reliant on a few tech behemoths. A debt-fueled drive to expand AI capacity has raised concerns that a bubble is brewing.
Uncertainty about the Fed’s potential hawkish swing has fuelled fears that this year’s gains have exceeded expectations. Traders have trimmed the odds of a quarter-point rate cut in December below 50% after some officials indicated that additional easing is not guaranteed.
