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U.S. equity futures powered higher Monday, while Treasury bond yields hit new cycle highs and oil prices tumbled, as investors unpicked details of a busy weekend of headline risk and braced for what could be a crucial five-day stretch on Wall Street.
Stocks ended lower for the first week in seven late Friday, with the S&P 500 down marginally on the session but dipping around 0.85% for the week amid a mixed set of corporate earnings, a selloff in Treasury bonds and uncertainty tied to a deadlock U.S. presidential election.
Bonds are back in the red this week, as well, with benchmark 10-year note yields extending their October surge by another 5 basis points overnight to trade at 4.276% heading into the New York session.
Benchmark 2-year notes were also on the rise, and were last pegged at 4.127%, ahead of a $69 billion auction in new paper later in the session and this week’s PCE inflation reading for the month of September on Thursday.
Labor markets will also be in focus this week with readings on job openings from the Commerce Department on Tuesday, payroll processing group ADP’s National Employment report Wednesday, weekly jobless claims Thursday and the benchmark non-farm payroll report for the month of September on Friday.
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Investors will also navigate a hectic calendar of corporate earnings, with 169 S&P 500 companies reporting October-quarter updates this week, including five of the so-called Magnificent 7 cohort: Alphabet (GOOGL) on Tuesday, Microsoft (MSFT) and Meta Platforms (META) on Wednesday and Apple (AAPL) and Amazon (AMZN) on Thursday.
So far this earnings season, with around 181 companies reporting, collective S&P 500 profits are forecast to rise 4.4% from last year to a $508.1 billion, with estimates for fourth quarter gains pegged at around 11.2%.
Related: Stocks are bracing for a monster week
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is up 0.8% for the month, are priced for a 36 point opening bell gain.
Futures linked to the Dow Jones Industrial Average, meanwhile, suggest a 200 point advance with those tied to the tech-focused Nasdaq indicating a 172 point gain following from Friday’s close.
Stocks are also getting a boost from a big decline in oil prices, which fell more than 5% in the overnight session following a targeted weekend strike on Iran by Israeli military forces that spared the country’s oil and nuclear facilities.
Brent crude futures contracts for December delivery, the global pricing benchmark, were last marked $4.46 lower at $71.60 each while WTI contracts for the same month slumped $4.37 to $67.41 per barrel.
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In overseas markets, global investor optimism helped lift the Stoxx 600 benchmark 0.35% higher in the opening minutes of trading in Frankfurt, with Britain’s FTSE 100 slipping 0.07% in London.
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Overnight in Asia, Japan’s Nikkei 225 jumped 1.8% in Tokyo following weekend elections that saw Prime Minister Shigeru Ishiba’s Liberal Democratic Party suffer its worst election result since 2009, with the powerful coalition leader likely to lose its parliamentary majority.
The loss likely means a more dovish tilt on rate from the Bank of Japan, and a stimulative policy on spending from whichever government emerges victorious. That’s pushing the yen further into the red, with the currency trading at a fresh three-month low against the U.S. dollar.
Related: Veteran fund manager sees world of pain coming for stocks
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