Dow Jones futures edged higher by 0.21% on Monday, reaching near 52,030 during European trading hours. S&P 500 futures also gained 0.25%, rising to approximately 7,880, while Nasdaq 100 futures increased by 0.15% to around 31,150. These gains came despite ongoing inflation concerns, as investors reacted to rising crude oil prices following deadly attacks on Riyadh’s King Khalid International Airport. The Houthi militants targeted the airport again on Sunday, just a day after an earlier strike that left 12 people dead and over 300 injured. In response, US President Donald Trump is considering retaliatory actions against the Iran-backed Houthis in Yemen.
Economic data revealed continued pressure on consumer sentiment, with the University of Michigan's Consumer Sentiment Index dropping to 46.3 in October, down from 48.1 in September and missing market expectations of 47.6. The likelihood of a Federal Reserve rate hike of at least 25 basis points this month fell to 19.4%, down from 24.4% the prior week. However, market participants remain confident in a year-end rate adjustment, pricing in an 86% probability of a rate increase at the Fed's December meeting.
These developments follow a strong performance on Wall Street last week, where all three major US stock indexes closed higher, supported by a rally in technology shares. Traders are now bracing for a busy week as the third-quarter earnings season kicks off, with major financial institutions like JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo set to announce results on Tuesday. Bank of America and Morgan Stanley will follow on Wednesday. Additionally, key inflation updates, including the September Consumer Price Index (CPI) and Producer Price Index (PPI), are scheduled for release on Wednesday and Thursday, respectively.
Analysts at Rabobank noted that the rally in US equities broadened out, with the S&P 500 closing 46 points higher at 7,811 on Friday. Strong gains were seen across the real estate, consumer discretionary, healthcare, and financial sectors.