Stock Futures Rise as Investors Make Cautious Return to Risk — Update
By Joe StonorNasdaq futures rebounded as investors tentatively turned back to artificial-intelligence stocks after heavy selling last week, as lower oil prices and strengthened Treasury supported a return to risk.Futures for the S&P 500 also rose--up 0.4%--though Dow Jones Industrial Average futures slipped 0.2%. Nasdaq futures jumped 1.2%, retracing some of last week's losses though the index remains down for the month. Chip makers gained premarket with bellwether Nvidia rising close to 2%. Earnings this week from artificial intelligence-linked companies including Meta, IBM and Texas Instruments will help shape AI sentiment."What investors really need is stronger monetization--proof that the revenues generated with AI can catch up with the spending on AI tools," said Swissquote's Ipek Ozkardeskaya.In Asia, stock indexes were mixed amid cautious tech recovery. South Korea's semiconductor-heavy Kospi rose 1.8%, though Japan's Nikkei Stock Average slipped 0.7%. European stocks pulled back sharply as elevated energy prices and the rotation back toward AI stocks weighed on the technology-light continent. The Stoxx 600 fell 1.1%.Oil prices fell after President Trump intervened to block sanctions that were set to be imposed on Russia, but Brent crude pared losses as Monday progressed. Front-month Brent dropped 1.1% to trade around $108.50 a barrel after closing at a five-month high of close to $110 Friday.Lower oil prices eased pressure on Treasurys, with yields falling across the curve. The faltering AI trade has also supported government bonds, as investors wager that stock market weakness will limit the severity of Federal Reserve tightening. Ten-year yields edged slightly lower to 5.094%, while 30-year yields fell by a similar amount to trade around 5.430%. Two-year yields fell to trade around 4.730%.In Europe, yields on French government bonds rose sharply following the weekend's demonstrations, while yields on German bonds traded slightly up.The dollar rose as the selloff in AI stocks eased. ING analysts said the selloff had weighed on the outlook for Fed rate hikes and, in turn, the greenback. The cautious return to risk helped bitcoin--up 2% to $82,514--while New York gold continuous contracts hovered around $4,200 a troy ounce.For the day ahead, investors will look to U.S. housing market data for October at the start of what is a quiet week for macro data releases.Write to Joe Stonor at [email protected]