US equity futures moved higher on Monday, suggesting that Wall Street could recover some of the losses recorded at the end of the previous week, as technology stocks attracted renewed interest and crude oil prices declined.
Nasdaq 100 futures rose 1.3% ahead of the opening bell, following a session in which technology shares accounted for a substantial portion of the broader market’s losses.
The expected recovery followed Friday’s decline, which pushed the Nasdaq Composite to its lowest closing level in a month.
Market participants were reassessing technology shares after recent selling linked to concerns about borrowing to finance artificial intelligence infrastructure and the potential returns from those investments.
A retreat in crude oil futures also provided a different backdrop for trading after prices had increased over several sessions.
The decline followed an executive order signed by President Donald Trump waiving key provisions of newly introduced sanctions against Russia. Trump said the decision was justified by US national interests.
Oil markets had previously responded to renewed Iranian attacks in the Strait of Hormuz and indications that a reported energy ceasefire between Russia and Ukraine was no longer holding.
US crude oil futures had risen above $100 a barrel for the first time in a month before retreating on Monday.
Technology Sector Losses Push Nasdaq to One-Month Low
US stocks ended Friday’s session lower, reversing the predominantly positive finish recorded on Thursday.
The Nasdaq Composite declined 572.99 points, or 2.1%, to 26,140.03, while the S&P 500 fell 84.62 points, or 1.1%, to 7,659.44.
The Dow Jones Industrial Average recorded a smaller decline, losing 175.28 points, or 0.3%, to close at 52,002.41.
Over the full trading week, the Nasdaq dropped 4.5% and the S&P 500 declined 2%. The Dow gained 0.7%, reflecting differences in performance between the major indices.
Technology shares were particularly affected by concerns surrounding capital expenditure on artificial intelligence infrastructure, including the use of debt to finance development.
Computer hardware stocks recorded some of the largest losses, with the NYSE Arca Computer Hardware Index falling 5.4% to its lowest closing level in two months.
Shares in semiconductor manufacturers, networking equipment providers and software companies also declined.
The losses across these industries contributed to the Nasdaq’s weekly decline and provided the context for Monday’s anticipated recovery.
Oil Price Movements Affect Airlines and Energy Stocks
The increase in crude oil prices during the previous week affected several sectors of the US equity market.
Airline shares declined as investors assessed the potential effect of higher fuel prices on operating costs.
The NYSE Arca Airline Index fell 3.2% on Friday.
Brokerage and biotechnology stocks also moved lower, while energy shares advanced alongside crude oil futures.
Oil prices had risen amid uncertainty surrounding international supply routes and geopolitical developments.
Renewed attacks by Iran in the Strait of Hormuz, an important passage for global energy shipments, added to concerns about potential supply disruptions.
Uncertainty surrounding a reported energy ceasefire between Russia and Ukraine also contributed to fluctuations in crude prices.
Monday’s decline in oil futures followed the US decision to waive certain sanctions provisions affecting Russia.
The change in energy prices was among the factors influencing equity futures before the start of regular trading.
Federal Reserve Reports 0.7% Increase in Industrial Production
Investors also considered US economic data showing that industrial production increased more than expected in September.
According to the Federal Reserve, industrial output rose 0.7% during the month, compared with economists’ forecasts for a 0.4% increase.
The August reading was revised to a gain of 0.1%, replacing the previously reported unchanged figure.
The September increase therefore represented an acceleration from the previous month’s revised growth rate.
Industrial production provides an indication of activity across manufacturing, mining and utilities and is one of the measures used to assess economic conditions.
The figures added to the information available to investors as they evaluated the outlook for US growth and monetary policy.
Investors Monitor Technology Shares and Energy Markets
Monday’s higher index futures suggested a possible change in direction following the previous week’s losses, particularly among technology companies.
Nasdaq 100 futures were up 1.3%, while lower crude oil prices provided a contrast to the energy market conditions that had affected equities on Friday.
The previous session’s losses had left the Nasdaq down 4.5% for the week, compared with a 2% decline in the S&P 500 and a 0.7% gain in the Dow.
The Federal Reserve’s industrial production figures also showed faster-than-expected growth in September.
Investors continued to monitor technology sector valuations, energy prices and geopolitical developments ahead of the opening of regular US trading.
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