U.S. stock futures climb; Fed meeting, tech earnings, U.S.-China talks in focus

Investing.com -- U.S. stock futures rose Monday, extending last week’s rally, as investors cheered growing expectations of a Federal Reserve rate cut and encouraging signs of progress in U.S.-China trade negotiations.

At 05:35 ET (09:35 GMT), Dow Jones Futures traded 300 points, or 0.6%, higher, S&P 500 Futures gained 62 points, or 0.9%, and Nasdaq 100 Futures jumped 345 points, or 1.4%.

All three of the main stock indices posted record closing highs on Friday, fueled by cooler-than-anticipated inflation data, which reinforced expectations that the Fed will opt to slash interest rates at its two-day meeting. 

Fed meeting looms; U.S.-China trade talks progress

Investor sentiment strengthened after data last week showed that U.S. consumer prices cooled more than expected in September, reinforcing bets that the Fed will cut rates at its two-day policy meeting concluding on Oct. 29.

The softer inflation print cemented expectations of a 25-basis-point cut, with markets now watching closely for signals on whether the central bank could ease further in the coming months.

"We continue to look for a 25bp rate cut [on Wednesday], with a further 25bp move in December and 50bp of cuts in early 2026," ING analysts said in a recent note.

Adding to the upbeat tone, U.S. and Chinese officials reached a “framework understanding” on key trade issues over the weekend at the ASEAN Summit in Kuala Lumpur.

Treasury Secretary Scott Bessent said both sides had agreed to defer fresh tariff threats and pause China’s planned restrictions on rare earth exports. The breakthrough sets the stage for U.S. President Donald Trump and Chinese President Xi Jinping to meet later this week to finalize an agreement.

“I think we’re going to have a deal with China,” Trump told reporters on Sunday.

Li Chenggang, China’s lead negotiator, said a "preliminary consensus" had been notched following a round of "candid and in-depth discussions."

Investors took these comments as signs that months of tariff tensions may finally ease, a development that has buoyed risk assets globally.

Big tech earnings in focus

Elsewhere, investors will also focus on corporate earnings, with five of the so-called “Magnificent Seven” tech giants set to report this week.

Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Alphabet (NASDAQ:GOOGL) are due to release results on Wednesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.

Investors will be watching for updates on AI investment, cloud demand, and consumer spending trends.

Keurig Dr Pepper (NASDAQ:KDP) starts this week’s parade of high-profile corporate earnings reports, with investors hunting for any fresh guidance from the beverage group, especially after rivals PepsiCo (NASDAQ:PEP) and Coca-Cola (NYSE:KO) forecast a benefit to revenue and income from a weaker dollar.

Crude and gold retreat

Oil prices slipped lower Monday, handing back some of the previous week’s strong gains as traders cheered signs of progress in U.S.-China trade talks, lifting worries about a major fallout between the two largest economies in the world. 

Brent futures dropped 0.8% to $64.69 a barrel and U.S. West Texas Intermediate crude futures fell 0.8% to $61.02 a barrel.

Crude prices soared last week after the U.S. imposed fresh restrictions on Russia’s oil industry, this time targeting the country’s biggest oil firms.

Gold prices also fell Monday, extending losses from last week as easing U.S.-China trade tensions eroded bullion’s safe-haven demand.

Spot gold slipped 2% to $4,030.89 per ounce and U.S. gold futures declined 2.3% to $4,044.14/oz.

The precious metal snapped a nine-week winning streak last week as traders took profits following record highs above $4,300/oz which were fueled by geopolitical concerns and expectations of monetary easing.

Ayushman Ojha contributed to this article