By Shashwat Chauhan and Utkarsh Hathi
Oct 27 (Reuters) – US stock index futures ticked up on Tuesday as crude oil prices extended their decline, while investors awaited a slate of key corporate earnings and the Federal Reserve’s interest-rate decision this week.
The Fed is widely expected to hold rates steady on Wednesday following an increase last month, though markets are pricing in at least two more hikes by mid-2027 as key inflation indicators remain elevated amid the ongoing US-Iran conflict.
“While we don’t expect a rate move this week, we wouldn’t be against a hike even though we’re not convinced of its urgency,” said John Velis, head of Americas Strategy at BNY.
“We think maintaining credibility is paramount for the Fed, and as (Fed Chair Kevin) Warsh likes to remind us, the inflation target has been exceeded for well over 60 straight months.”
Brent crude slipped for the second straight day in volatile trading, though it still held near its highest level since late April.
At 06:56 a.m. ET, Dow E-minis were up 169 points, or 0.32%, S&P 500 E-minis were up 15 points, or 0.19%, and Nasdaq 100 E-minis were up 79 points, or 0.27%.
Coca-Cola shares inched up 0.3% in premarket trading after the beverage giant raised annual profit forecast, while PayPal fell close to 1% despite lifting annual adjusted profit view.
Hyperscalers Alphabet, Microsoft and Amazon.com are expected to report earnings later this week. Their results will be parsed for signs of whether the hefty AI investments are translating into growth.
Jefferies equity strategist Jane Gibbons said in a note that growth for ‘Magnificent 7’ names could trail the rest of the S&P 500. The brokerage sees earnings for the group of the biggest US tech stocks growing at 21% versus 32% for the rest for the benchmark.
Megacap and growth stocks were mostly higher. Tesla shares climbed over 1%, after jumping more than 5% in the last session.
Meta was flat after the company increased its largest-ever equity fundraising to $97.5 billion to fund AI expansion. The fundraising plan has also drawn interest of up to $5 billion in total from Nvidia, Advanced Micro Devices and Broadcom.
This comes amid mounting investor concerns over debt-funded spending in the face of rising borrowing costs, which has weighed on AI trade this month.
However, sentiment somewhat improved in the previous session after AI lab Anthropic revealed its IPO filing, taking a big step towards a potentially record-breaking listing even as it disclosed steep losses and security concerns.
The development had helped lift chip stocks after a bruising few weeks, along with other AI beneficiaries such as photonic product makers and neoclouds.
Among other movers, Royal Caribbean rose 4.6% after the cruise operator beat third-quarter profit estimates, while Whirlpool dropped 8% after the home appliance maker reported a third-quarter loss and missed revenue expectations.
Investors are also looking ahead to the November 3 midterm elections, which will decide control of the US Congress.
(Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Editing by Shilpi Majumdar)
Comments