Stocks Edge Higher as Oil Eases Ahead of Big Earnings Week and Fed Decision

U.S. stock index futures moved higher on Monday as crude oil prices pulled back from last week’s surge, opening a week that brings earnings reports from about one-third of S&P 500 companies and a Federal Reserve rate decision on Wednesday.

At 5:19 a.m. ET, Dow E-minis were up 257 points, or 0.49%, S&P 500 E-minis were up 23.25 points, or 0.3%, and Nasdaq 100 E-minis were up 73 points, or 0.25%, according to Reuters. Tesla led the early advance among large stocks, rising 2.1%.

Earnings put AI spending to the test

Alphabet, Microsoft and Amazon are among the companies set to report this week, and their results will be watched for signs that heavy spending on artificial intelligence is paying off. The focus follows a muted reception for AI-linked megacaps last week: Meta disappointed investors after it raised its annual AI spending forecast again and said it would sell new stock to help pay for it, while Tesla also fell after its results.

“Strong AI demand alone may no longer be enough. Markets want evidence of monetization, margins and cash flow,” Charu Chanana, chief investment strategist at Saxo, told Reuters.

Neocloud firms, which rent out computing capacity for AI work, have been among the hardest hit this month. CoreWeave and Nebius have each lost more than 30% of their market value in October, and both fell around 3% in premarket trading on Monday. IREN dropped 2.6% and Applied Digital fell 1.5%. Elon Musk wrote on X on Sunday that markets have “almost entirely shut off access to money” for companies without substantial revenue independent of AI data centers, and predicted consolidation among neocloud firms.

Oil eases, and the calendar fills up

Crude oil prices eased on Monday after hitting a near six-month high last week. On Sunday, Qatari mediators traveled to Tehran as part of an effort to de-escalate regional tensions in coordination with the United States, Reuters reported.

The Federal Reserve’s rate decision is due on Wednesday, with a pause widely expected after its September rate increase. Traders still see a December increase as firmly possible, and at least two quarter-point increases by mid-2027, according to LSEG data. The Fed’s preferred inflation gauge, the Personal Consumption Expenditures index for September, is due on Thursday, and third-quarter gross domestic product, expected to show 3.2% growth, is also due this week.

Wall Street is also watching the November 3 midterm elections, which will decide control of Congress. Among early moving stocks, U.S.-listed shares of Brazilian companies fell after Luiz Inacio Lula da Silva won a fourth term as president on Sunday, with the iShares Brazil ETF down 27.3%. Surgery Partners jumped 20.9% following media reports that Bon Secours Mercy Health is in late-stage talks to buy a majority stake in the surgery operator.

Reporting based on coverage by Reuters.