U.S. equity futures edged higher at the start of the week, with traders directing attention to a calendar packed with corporate earnings reports and inflation figures, viewing positive outcomes as a potential support for the market's recent upward run even as oil prices remained elevated and geopolitical tensions persisted.
Futures tied to the S&P 500 edged up by 0.11%, while contracts tracking the Dow Jones Industrial Average added 51 points, equivalent to a 0.10% gain. Nasdaq 100 futures slipped into negative territory, giving back the ground gained earlier in the session.
Gains in the technology sector had already lifted Wall Street's performance before that development, with investors setting aside the drag from rising oil prices and bond yields. The Dow Jones Industrial Average and S&P 500 each posted back-to-back weekly advances, notching their second uptick across the past three weeks, while the Nasdaq Composite extended its run of consecutive weekly gains to four.
Crude benchmarks recovered ground on Monday after opening losses, with traders pulling back as questions mounted over a Trump-backed truce proposal aimed at ending the conflict between Russia and Ukraine. A claim by Zelenskyy that Moscow had already violated the ceasefire conditions pushed oil prices into positive territory, reversing the losses that had accumulated through the earlier part of the trading session.
Benchmark crude contracts advanced on the day, with West Texas Intermediate settling at $92.81 per barrel after a 1.05% gain and Brent landing at $105.70 on a rise of 0.94%.
Ahead of third-quarter earnings releases, stock markets were looking to corporate performance data for a potential lift, even as tensions abroad and rising energy costs placed pressure on investor confidence. Earnings disclosures from a number of the largest U.S. banks were due throughout the coming days, keeping the results calendar active. Quarterly results were on the horizon for Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo, among others.
Whether profit results from listed companies can keep pace with elevated borrowing costs — and hold up against a broader backdrop of economic uncertainty — was the question weighing on traders and investors.
Strategists at Goldman Sachs, among them Christian Mueller-Glissmann, shifted their equity positioning to overweight on a three-month horizon, pointing to anticipated double-digit earnings expansion and a pullback in valuations. Vincent Juvyns, chief investment strategist at ING in Brussels, noted that robust earnings growth had so far absorbed the drag from elevated interest rates, adding that the upcoming earnings season would reveal whether conditions remained favourable for the bull market to extend.
Market participants were also set to track the September consumer price index and producer price index releases, due out on Wednesday and Thursday respectively. Traders and analysts indicated they would turn to the figures to gauge whether price pressures were cooling or holding firm, with the outcome expected to shape expectations around the Federal Reserve's next steps on monetary policy.
Remarks from Federal Reserve Chair Kevin Warsh, set for delivery on a fixed date, were drawing attention from market participants seeking guidance on the direction of borrowing costs. Traders in short-term interest rate instruments had factored in the likelihood of a further U.S. rate increase before the end of the year.
Market participants were watching whether steady corporate profit results could counterbalance the pressure building from fuel costs and borrowing rates that had reached multi-decade peaks.
Stock markets across Europe began the trading week with gains. The pan-European Stoxx 600 rose 0.41% and the UK's FTSE 100 added 0.56%, leaving both indices in positive territory by the close. Italy's FTSE MIB led the group with a gain of 0.65%, followed by Germany's DAX at 0.49%, and France's CAC 40 edging up by 0.11%.