U.S. equity futures were modestly higher at the start of the week, as investors prepared for a heavy run of corporate earnings and closely watched economic releases that had been delayed. Semiconductor group Onsemi is among the first major names due to report on Monday, while Japanese equities climbed after Prime Minister Sanae Takaichi secured a decisive election victory.
Futures edge higher
Wall Street futures pointed slightly upward early Monday ahead of a week packed with earnings updates and key macro data. By 03:43 ET, Dow futures were up 87 points, or 0.2%, S&P 500 futures had added 6 points, or 0.1%, and Nasdaq 100 futures were ahead by 13 points, also 0.1%.
The move followed a strong finish to last week, when U.S. stocks rebounded from earlier losses driven by concerns that artificial intelligence could disrupt parts of the software sector. On Friday, the Dow Jones Industrial Average closed above the 50,000 mark for the first time, while the S&P 500 gained nearly 2% and the Nasdaq Composite advanced around 2.2%.
Not all mega-cap stocks participated in the rally. Shares of Amazon (NASDAQ:AMZN) fell 5.6% as investors reacted cautiously to signals that the company plans to significantly ramp up spending on AI. Other large technology groups, including Alphabet (NASDAQ:GOOG), have also outlined aggressive investment plans to remain competitive in AI, though questions persist over how quickly these investments will deliver sustainable returns.
ON Semi to report
Earnings attention on Monday turns to ON Semiconductor (NASDAQ:ON), which is set to release quarterly results after the closing bell. The chipmaker previously issued fourth-quarter revenue and profit guidance broadly in line with market expectations.
Demand for ON Semi’s power management solutions used in AI data centres has helped offset softer conditions in the automotive sector, where weaker electric vehicle demand in North America and Europe has reduced spending on silicon carbide components.
Consensus estimates compiled by Bloomberg suggest adjusted earnings per share of $0.63 on revenue of $1.53 billion.
Later in the week, investors will also hear from a number of other technology-focused companies, including Datadog (NASDAQ:DDOG), Spotify (NYSE:SPOT), Cisco (NASDAQ:CSCO) and Applied Materials (NASDAQ:AMAT).
Japan PM scores big win
Outside the U.S., Asian markets advanced after Japanese Prime Minister Sanae Takaichi secured a major victory in a snap election held over the weekend. The vote came just 110 days after Takaichi became Japan’s first female prime minister, making the gamble a high-stakes one.
According to reports, her Liberal Democratic Party won such strong support that it achieved a rare supermajority in the lower house of parliament. The outcome appears to clear the way for Takaichi to pursue plans for increased government spending and tax cuts, supported by what observers see as a stable political environment.
“Calm may be on the way for Japan’s markets now the election is out of the way,” said Thomas Mathews, Head of Asia Pacific Markets at Capital Economics. He added that a recent sell-off in Japanese government bonds, which had unsettled global markets, is unlikely to persist, while the yen is expected to strengthen.
Gold rises
Gold prices moved higher in European trading, with silver also advancing, following sharp swings in precious metals markets last week. Those moves were driven by a mix of subdued safe-haven demand, profit-taking and uncertainty around the outlook for U.S. monetary policy.
Investors are now focused on several key U.S. economic indicators due this week, notably nonfarm payrolls and consumer price index inflation data. Both releases are closely watched by the Federal Reserve when assessing the path for interest rates.
Some haven demand eased after signs of progress in talks between the U.S. and Iran over the weekend, with both sides indicating a willingness to continue discussions on Tehran’s nuclear programme.
Oil slips
Oil prices declined as easing geopolitical tensions weighed on sentiment. Comments from Washington and Tehran suggesting that indirect nuclear negotiations will continue helped reduce fears of an imminent escalation in the Middle East.
A firm U.S. dollar ahead of major economic data releases also pressured crude prices, which had already fallen about 2% last week. Investors are also awaiting fresh economic data from China, the world’s largest oil importer.
Brent futures were last down 1.1% at $67.32 a barrel, while West Texas Intermediate crude slipped 1.0% to $62.92 a barrel.
The U.S. and Iran said over the weekend that talks held in Oman on Friday were constructive and would continue, helping to temper concerns of military conflict after earlier U.S. naval deployments to the region.
Leave a Reply