U.S. stock futures edged higher in early trading as investors geared up for a busy week marked by corporate earnings, key economic data releases, and the U.S. midterm elections.
Following a losing week influenced by tech sector sell-offs and AI spending concerns, markets are looking towards events like the jobs report and earnings from giants like Apple for direction. The upcoming midterm elections also add a layer of political uncertainty.
Stock futures showed an upward trend early Monday, attempting to recover from a challenging week on Wall Street. Investors are keenly awaiting a significant week packed with corporate earnings reports, crucial jobs data, and the pivotal U.S. midterm elections.
S&P 500 futures were up 0.5%, while Nasdaq-100 futures gained 0.9%. Futures for the Dow Jones Industrial Average increased by 186 points, marking a 0.4% rise.
These modest gains follow a difficult week for the major stock averages, which were pressured by significant selling in the technology sector. Investors have been closely monitoring companies associated with the burgeoning artificial intelligence industry. Over the past week, the S&P 500 and Dow Jones Industrial Average each experienced declines of less than 1%, while the Nasdaq Composite saw a more significant drop of 2%.
In Asian markets, Japan's Nikkei 225 registered a gain of 0.38%, while the Topix saw a slight decrease of 0.46%. South Korea's Kospi advanced by 2.38%, and the smaller Kosdaq index climbed 1.65%. Australia's benchmark S&P/ASX 200 fell by 0.53%. Meanwhile, Hong Kong's Hang Seng index rose by 0.61%, and China's CSI 300 index saw a gain of 1.26%.
The week began on a positive note, buoyed by Anthropic's public filing for an IPO, which initially boosted AI-related stocks. However, selling pressure re-emerged as concerns about capital expenditure spending surfaced, particularly after both Alphabet and Microsoft reported lower-than-expected capital expenditure forecasts. Amazon also maintained its full-year capital expenditure guidance without revisions.
Despite these concerns, Warren Pies of 3Fourteen Research remains optimistic, highlighting the upward trend in forward earnings estimates and expressing confidence in Anthropic's S-1 filing.
"I just don't see anything broken with the AI trade fundamentally," he stated on CNBC's "Closing Bell Overtime" on Friday. "Technicals are another story."
The tech-heavy Nasdaq and the S&P 500 closed October with losses, partly due to apprehension surrounding AI spending. The Nasdaq experienced its most significant monthly decline since March 2025. Conversely, the Dow Jones Industrial Average managed a gain of nearly 2% as investors shifted towards defensive sectors like healthcare.
Mike Dickson, Horizon's head of research and quantitative strategies, noted in a recent report, "Rather than running for the hills amid heightened AI risks, investors are seeing plenty of return potential in other types of stocks."
Dickson also commented on the upcoming midterm elections, stating, "While this week's midterm elections have some investors worried that changes in Washington, D.C., could impact the markets, it's important to remember that stocks tend to stay steady regardless of which party gains control of Congress."
The U.S. midterm elections are scheduled for Tuesday, with expectations leaning towards a Democratic majority in the House of Representatives, while control of the Senate remains uncertain.
Additionally, investors are anticipating the release of October's nonfarm payrolls report on Friday. Economists surveyed by Dow Jones predict an increase of 55,000 jobs for the month.
Beyond the crucial jobs report, a new wave of corporate earnings is also on the horizon. Apple, a key component of the "Magnificent Seven," is set to announce its results after market close on Monday. McDonald's and Qualcomm are also scheduled to release their earnings later in the week.
Mainland China and Hong Kong shares rise amid broad losses in other Asian markets
Mainland China and Hong Kong shares opened higher, following reports that Chinese financial regulators would convene meetings with banks and securities firms to discuss strategies for strengthening the country's stock market.
Hong Kong's Hang Seng index saw a gain of 0.59%, while mainland China's CSI 300 index added 0.21%.
The upward movement in the Hang Seng was primarily driven by the consumer cyclicals and technology sectors, both of which rose by 0.48%.
—Justina Lee
Kioxia's shares fall 14% after company warned about stalling flash memory prices
Kioxia Holdings Corporation experienced a significant share price drop of approximately 14% after cautioning investors about stagnating prices in the flash memory market during its earnings call last Friday.
The Japanese semiconductor memory solutions provider reported that the average selling prices for NAND flash memory saw mid-20% growth in the quarter ending September, a slowdown compared to the 70% growth observed in the previous quarter.
Kioxia also projected an operating profit of 2 trillion yen for the current quarter, falling short of the 2.35 trillion yen anticipated by analysts, indicating a near-flat price increase on a quarter-over-quarter basis.
—Justina Lee
Japan's Nikkei falls 0.5%, South Korea's Kospi declines 1.4%
Markets across the Asia-Pacific region traded lower early Monday, mirroring the losses seen on Wall Street last week which were primarily driven by sell-offs in the technology sector.
Japan's Nikkei 225 index decreased by 0.54%, while the Topix declined by 0.74%.
The Kospi fell 1.39% at the opening, with the smaller Kosdaq index slipping 0.81%.
Australia's benchmark S&P/ASX 200 was down 0.24%.
—Justina Lee
Oil prices fall
Oil prices experienced a decline on Sunday evening as U.S. equity futures showed an increase.
U.S. West Texas Intermediate crude futures dropped by over 1% to $102.41 per barrel, while the global benchmark Brent crude futures decreased by more than 1% to $111.68 a barrel.
These movements reverse the gains seen on Friday, which were over 2% and contributed to crude oil's overall rise of more than 10% in October.
— Sean Conlon
Asia-Pacific markets set to open lower as investors keep an eye on Mideast developments, U.S. midterm elections
Asia-Pacific markets were poised for a subdued open on Monday, tracking the downward trend of U.S. stocks from the previous week, which was significantly impacted by selling pressure in the technology sector.
Futures for Japan's Nikkei 225 indicated a decline, with Chicago futures contracts at 62,720 and Osaka counterparts trading at 62,420, compared to the index's prior close of 63,290.11.
Hong Kong's Hang Seng index futures were positioned at 23,345, contrasting with the index's last closing figure of 23,294.42.
Australia's S&P/ASX 200 showed a slight decrease of 0.16%.
Market participants are closely monitoring geopolitical developments in the Middle East, as well as the upcoming U.S. midterm elections, which are expected to shape the control of Congress.
— Justina Lee
Stock futures open higher
U.S. equity futures opened with a slight upward bias on Sunday evening.
S&P 500 futures climbed 0.2% shortly after 6 p.m. ET, alongside Nasdaq-100 futures. Dow Jones Industrial Average futures advanced by 103 points, or 0.2%.
— Sean Conlon
