US stock index futures rose slightly on Monday, with crude oil prices retreating from the gains they recorded last week, which strengthened investor sentiment at the beginning of a week filled with corporate results and the Federal Reserve’s decision on interest rates.
About a third of the companies listed in the Standard & Poor's 500 index are scheduled to announce their results this week, including the giant technology companies Alphabet, Microsoft, and Amazon.com, whose results will be closely monitored in search of indications that huge investments in artificial intelligence are beginning to achieve returns, according to Reuters.
This comes after a lukewarm reaction to the results of major companies related to artificial intelligence last week. Meta disappointed investors after it once again raised its forecast for annual spending on artificial intelligence and announced that it would issue new shares to help finance it. Tesla shares also declined after announcing its results.
Charu Chanana, chief investment strategist at Saxo, said that strong demand for artificial intelligence alone may no longer be enough, adding that markets want evidence of companies’ ability to generate revenues from these investments, improve profit margins, and generate cash flows.
Shares of companies related to artificial intelligence have been under pressure this month, amid growing fears that spending on data centers, financed by debt, will become unsustainable in light of rising borrowing costs.
Specialized cloud computing companies, known as “NewCloud,” were among the most affected. “Koroev” and “Nebios” shares lost more than 30 percent of their market value each during the current month.
The shares of the two companies fell by about 3 percent each in trading prior to the opening of the market on Monday, and the shares of “Irene” and “Applied Digital” fell by 2.6 percent and 1.5 percent, respectively.
Elon Musk said, in a post on the “X” platform on Sunday, that the markets “have almost completely closed the doors of financing” to companies that do not achieve significant revenues from sources independent of artificial intelligence data centers, anticipating the occurrence of mergers in the “NewCloud” sector.
He added that SpaceX will not acquire any of the companies in this sector, describing this as “useless.”
By 05:19 a.m. EST, Dow Jones Industrial Average futures rose 257 points, or 0.49 percent, Standard & Poor's 500 futures rose 23.25 points, or 0.3 percent, while Nasdaq 100 futures rose 73 points, or 0.25 percent.
Shares of most major companies with high market value and growth companies rose on Monday, after the Standard & Poor's 500 index recorded losses over the past two weeks. Tesla led the gains, with its stock rising 2.1 percent.
Although concerns about rising bond yields and energy costs linked to tensions in the Middle East have sparked turmoil in markets over the past weeks, expectations remain high for a strong season of corporate results.
Crude oil prices fell on Monday, after recording their highest levels in about 6 months last week. Qatari mediators went to Tehran on Sunday, as part of efforts to reduce the escalation of regional tensions, in coordination with the United States.
The Federal Reserve is scheduled to announce its decision on interest rates on Wednesday, amid widespread expectations to keep them unchanged, following their hike in September. However, traders still see the possibility of a rate hike in December, and expect at least two increases, of 25 basis points each, by mid-2027, according to data from the London Stock Exchange Group (LCEG).
The September personal consumption expenditures index, the Federal Reserve's preferred measure of inflation, is scheduled to be released Thursday. This week, GDP data for the third quarter was also released, amid expectations that the economy would grow by 3.2 percent.
In addition, Wall Street is increasingly interested in the midterm elections scheduled for November 3, which will determine who controls the US Congress.
Among the stocks that witnessed early movements, shares of Brazilian companies listed in the United States fell sharply, after President Luiz Inacio Lula da Silva won a historic fourth presidential term on Sunday, in a surprise result that contradicted opinion polls. The iShares ETF for Brazilian stocks fell by 27.3 percent.
On the other hand, Surgery Partners shares jumped by 20.9 percent, following media reports that Bon Secours Mercy Health, an American non-profit healthcare organization, is in advanced negotiations to buy a majority stake in the surgery center operating company.
A survey, the results of which were published on Monday, showed that the morale of German companies improved in October more than expected, driven by increased optimism about future economic prospects.
The Ifo Institute said that the business climate index rose to 90.2 points in October, from 89.9 points in September. Analysts polled by Reuters had expected the index to rise to 90 points.
The economic expectations index rose to 91.6 points in October, compared to 90.4 points in the previous month.
“The economic recovery is continuing,” said the institute’s president, Clemens Fust.
The German government raised its economic growth expectations to 1.3 percent in 2026 and 1.1 percent in 2027, compared to its expectations last April, which indicated growth of 0.5 percent in 2026 and 0.9 percent in 2027.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said that the sixth consecutive rise in the Ifo index indicates, above all, that the German economy is on a growth path, despite the many adverse circumstances.
Data on German economic growth in the third quarter is scheduled to be published on Friday.
Despite the improvement in the Ifo index and some other company surveys over the past months, Capital Economics expects that the German economy has recorded a recession in the third quarter.
The institution's chief economist for Europe, Andrew Kenningham, said that the survey, along with indicators of recovery in the labor market and continued fiscal stimulus, supports the institution's estimates that the slowdown in the third quarter is partly due to exceptional factors, and that the economy will return to growth in the fourth quarter.
While economic expectations rose and contributed to the increase in the general index, companies' assessment of current business conditions was slightly more negative, as the index fell to 88.8 points in October, from 89.5 points in September.
De la Rubia warned that the significant rise in oil and gas prices, which also led to an increase in electricity prices and exacerbated volatility in stock markets, would inevitably reflect on the performance of companies.
He added that the continuation of the quasi-economic recession in France, the second most important destination for German exports, due to political turmoil and fluctuations in bond markets, will have repercussions on the German economy as well.
