Investing.com-- U.S. stock index futures rose Monday, starting a new week that includes a Federal Reserve meeting as well as more crucial earnings on a positive note.
At 06:25 ET (10:25 GMT), Dow Jones Futures rose 175 points, or 0.4%, S&P 500 Futures climbed 25 points, or 0.5%, and Nasdaq 100 Futures gained 110 points, or 0.6%.
Wall Street indexes had rebounded sharply on Friday after the PCE price index--the Fed’s preferred inflation gauge--read mostly within expectations for June, driving up optimism that the central bank will begin cutting rates in September.
The S&P 500 rose 1.1%, the NASDAQ Composite gained 1%, and the Dow Jones Industrial Average surged over 650 points, or 1.6%.
Fed meeting set to provide rate cut clarity
The U.S. Federal Reserve is widely expected to keep interest rates unchanged at the conclusion of its two-day meeting on Wednesday.
But any signals from the central bank on when it plans to begin cutting interest rates will be closely watched, amid increasing signs that inflation had cooled in recent months.
Recent comments from Federal Reserve officials signal they will likely remain on hold at their upcoming meeting, but the prospect of a first interest rate cut has become more probable, according to Goldman Sachs (NYSE:GS) economists.
The primary factor moving the FOMC closer to a cut is the favorable inflation data from May and June. After firmer inflation figures in the first quarter—attributed largely to residual seasonality and typical month-to-month noise—the second quarter saw significant improvement in inflation news.
Traders were seen pricing in a 25 basis point cut by the Fed in September, CME Fedwatch showed.
Apple, Microsoft to report this week
Earnings reports from some of Wall Street’s biggest companies are also on tap this week, with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) set to report on Tuesday and Thursday, respectively.
Other tech majors including Meta Platforms (NASDAQ:META), Advanced Micro Devices (NASDAQ:AMD) and Amazon (NASDAQ:AMZN) are also set to report earnings through the week.
The results come in the wake of an extended rout in technology stocks, as the sector was walloped by profit-taking and as expectations of rate cuts saw investors pivot into more economically sensitive sectors.
Underwhelming earnings from Alphabet (NASDAQ:GOOGL) last week also sparked increased caution ahead of the tech earnings, with investors waiting to see whether increased investment in artificial intelligence was bearing fruit.
As far as Monday is concerned, earnings from fast-food giant McDonald’s (NYSE:MCD) will be the highlight.
Crude slips despite heightened Middle East tensions
Crude prices edged lower Monday despite concerns of a widening conflict in the Middle East, potentially impacting global supply.
By 06:25 ET, the U.S. crude futures (WTI) dropped 0.2% to $77.02 a barrel, while the Brent contract fell 0.1% to $80.20 a barrel.
A deadly rocket strike in the Israeli-occupied Golan Heights over the weekend has been blamed by both Israel and the U.S. on Iran-backed Hezbollah, who have denied responsibility for the attack.
Israel has vowed retaliation against Hezbollah in Lebanon, and Israeli jets hit targets in southern Lebanon on Sunday.
These increasing tensions are also seen diminishing the prospect of a ceasefire between Israel and Hamas.
However, the crude market remains weak as demand remains threatened by global economic weakness.
(Ambar Warrick contributed to this article.)
This content was originally published on Investing.com
