US stock futures were in the green on Monday, with all three indexes seeming set to begin the week on a high at the opening bell.
Dow Jones futures gained 0.49%, while S&P 500 futures edged up 0.36%. Nasdaq-100 futures rose 0.55%.
Last week’s sell-off pushed the S&P 500 and Nasdaq Composite to their second consecutive weekly losses, with all three major indexes closing lower on Friday.
While the Federal Reserve’s Wednesday meeting will be a major focus this week, several other developments could influence markets on Monday. Here are five things to watch.
5 things to know before Wall Street opens on Monday
- Brazil stocks crash after Lula’s election victory
Brazilian stocks are facing a sharp sell-off after President Luiz Inácio Lula da Silva secured an unexpected fourth term, defeating market-favourite Flávio Bolsonaro in Sunday’s runoff election.
US-listed shares of Brazilian companies tumbled before the opening bell. Petrobras fell around 22%, while Itaú Unibanco and other Brazilian financial stocks slid sharply. The iShares MSCI Brazil ETF dropped nearly 26% in premarket trading.
The reaction reflects investor concerns over Brazil’s fiscal outlook, as markets had positioned for a Bolsonaro victory and the prospect of tighter spending, deregulation and economic reforms.
- Musk warns of neocloud shakeup
Elon Musk has warned that more than 200 neocloud companies could face what he described as “guppy-level death and consolidation,” as debt markets become increasingly reluctant to finance businesses heavily dependent on AI data centres.
CoreWeave, Nebius and IREN were lower in premarket trading after already losing more than 30% of their market value over the past month.
The warning adds to concerns about whether the huge investments in AI infrastructure will generate sufficient returns, particularly as rising borrowing costs make debt-funded expansion more expensive.
- Oil pulls back after last week’s surge
Crude oil prices retreated after reaching near six-month highs last week amid concerns about supply disruptions linked to the Middle East conflict.
Brent crude fell around 1.7% to $114.86 a barrel, while US West Texas Intermediate declined 2% to $101.08.
The pullback offered some relief to risk assets after higher energy prices had added to inflation concerns and weighed on investor sentiment.
However, uncertainty around regional supply routes and the possibility of further disruption remain important risks for markets.
- Asian technology stocks remain under pressure
Asian markets showed continued weakness in technology and semiconductor stocks on Monday, reflecting lingering doubts about the sustainability of AI spending.
Japan’s Nikkei 225 fell 0.80%, with chip-related stocks including Screen Holdings and Kokusai Electric dropping more than 4%. South Korea’s Kospi declined 1.46%, while the Kosdaq lost 3.62%. Samsung Electronics fell 1.16%.
The weakness follows last week’s losses on Wall Street and comes as investors await earnings from major technology companies for clues about whether their AI investments can deliver stronger growth and profitability.
- Verizon earnings, Big Tech results and the Fed
Verizon’s third-quarter results, released before the opening bell, kicked off a busy week of corporate earnings. The stock was up 2% after it reported an earnings beat for the third quarter.
Investors will turn their attention to Microsoft and Alphabet on Wednesday, followed by Amazon on Thursday, as they look for evidence that rising AI spending is translating into revenue growth, margins and cash flow.
The Federal Reserve’s two-day meeting begins Tuesday, with its rate decision due Wednesday. Markets widely expect the central bank to hold rates steady following its September hike, although investors will scrutinise officials’ comments for clues about the outlook for borrowing costs.
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