US Futures and Asian Stocks Gain After Wall Street AI Rally; Eyes on Earnings, Fed, Oil Slides

US equity futures and major Asian stock markets traded higher following a technology-driven rally on Wall Street. The moves come as markets anticipate US tech earnings reports and await this week’s Federal Reserve decision, leaving investors attentive to cues from corporate profits and monetary policy.

Wall Street Strength Sets Global Tone

According to the Associated Press, the S&P 500 rose 0.7% on Monday, more than recovering losses from the previous week and coming within 1.8% of its all-time high set earlier this month. The Nasdaq Composite gained 0.8%, and the Dow Jones Industrial Average added 0.3%.

Nvidia led the gains, rising 2.4% after three consecutive weeks of losses—its longest such losing streak since June. While Nvidia helped drive the rally, the article notes that other artificial intelligence sector stocks were volatile, responding to concerns about high borrowing costs for data centers and AI chip purchases. Meta Platforms remained active after announcing plans to raise $35 billion via a stock sale for AI investment. Nvidia, Advanced Micro Devices, and Broadcom have indicated potential participation, collectively considering up to $5 billion in Meta's offering.

Profit reports from major tech companies this week are expected to provide updates on the impact and profitability of ongoing AI investments. Alphabet and Microsoft report Wednesday, with Amazon to follow on Thursday. Roughly one-third of S&P 500 companies will deliver results this week, per the Associated Press.

Asia Stocks Rally, Tech Drives Gains

Asia broadly mirrored Wall Street’s gains. South Korea’s Kospi was up 3.6% at 5,667.99 by midday, with SK Hynix surging 7% and Samsung Electronics adding 4.8%. Tokyo’s Nikkei 225 climbed 2.2% to 63,542.77, driven by Advantest’s jump of more than 10% and a 7% rise in SoftBank Group. Taiwan’s Taiex gained 0.5% and Australia’s S&P/ASX 200 rose 0.3% to 8,838.10.

Not all markets joined the rally. Hong Kong’s Hang Seng index slipped 0.2% to 23,174.44 and the Shanghai Composite edged 0.1% lower to 3,692.58. Activity in China was subdued as traders awaited potential announcements from a closed-door leadership meeting of the Communist Party.

Oil Prices and US Treasury Yields Move

Crude oil prices continued falling. Brent crude, the global benchmark, dropped 0.8% to $109.82 a barrel, and US benchmark crude declined 0.8% to $100.93. The article does not specify a catalyst for the move.

In the US bond market, the 10-year Treasury yield eased to 4.98% from 5.00% Friday, while the two-year yield rose to 4.71% from 4.69%. The prevailing expectation, according to the Associated Press, is that the Federal Reserve will keep its federal funds rate unchanged this week, after last month’s increase—the first in three years.

Earnings and Fed Decision in Focus

Investors are focused on upcoming earnings from tech majors Alphabet, Microsoft, and Amazon, with about one-third of S&P 500 companies set to report this week. The Federal Reserve concludes its policy meeting Wednesday. The consensus view is for no change to the federal funds rate, but updated guidance or economic projections could affect sentiment and valuations. The Fed continues to seek evidence of cooling inflation following its recent rate hike.

Elsewhere, in currency markets, the dollar rose to 157.65 Japanese yen from 157.50, and the euro edged down to $1.1173 from $1.1176.

In other global moves, Brazilian stocks fell after President Luiz Inácio Lula da Silva won reelection, with the Bovespa index dropping roughly 14% amid investor anxiety about a potential increase in government spending and debt pressures.