U.S. stock-index futures edged lower early Monday, as a sharp rise in oil prices weighed on investor sentiment ahead of a crucial week dominated by major technology earnings and a Federal Reserve policy decision. Brent crude jumped close to 3%, hitting $108.5 a barrel—a level not seen in over three weeks—after U.S.-Iran negotiations stalled, keeping Middle East energy exports under pressure.
At 5:44 a.m. ET, Dow E-minis slipped 65 points, or 0.13%, while S&P 500 E-minis eased 0.08% and Nasdaq 100 E-minis dipped 0.05%, according to Reuters. By 6:08 a.m. New York time, Bloomberg data showed S&P 500 futures off by 0.1%, Nasdaq 100 futures barely budged, and Dow futures slipping 0.2%. The benchmark S&P 500 still holds nearly a 10% gain for the month, powered by a rally in chip stocks.
This week brings the real test for market stability. Microsoft, Alphabet, Amazon, and Meta all line up with reports on Wednesday; Apple steps in with its numbers on Thursday. In total, firms accounting for about 44% of the S&P 500’s market cap are on tap to release earnings in the next several days.
Oil led the move. Brent crude at one point jumped close to 3%, hitting $108.5 a barrel—a high not seen in over three weeks, Reuters said. The catalyst: stalled negotiations suggesting Middle East energy exports will stay squeezed.
“We are suffering from a distinct lack of clarity at the moment,” said William Blair macro analyst Richard de Chazal. He noted equity investors have reverted to the AI trade, whereas commodity players keep cautioning that the geopolitical risk is still being played down, as reported by Reuters.
So far, earnings season has thrown the market a lifeline. Out of 139 S&P 500 firms reporting by Friday, 81.3% topped profit forecasts—beating the previous four-quarter average of 78.1%, LSEG data showed, as reported by Reuters. Still, that’s coming from the early stretch of the Middle East turmoil. The real test for margins looms if energy and shipping prices keep climbing.
Futures leaned on chips for support again. Qualcomm gained premarket after TF International Securities’ Ming-Chi Kuo pointed to industry checks indicating OpenAI is teaming up with Qualcomm and MediaTek on smartphone chips, eyeing mass production in 2028. Intel climbed as well, extending Friday’s jump that was driven by AI data center CPU demand. Intel’s announcement dragged rivals into the spotlight. On Friday, Reuters noted that shares of AMD and Arm jumped, as traders wagered that inference—the AI phase handling user queries—might drive up CPU sales. Nvidia, for its part, is already expanding into that field with a processor push of its own.
AI wasn’t the only story moving stocks before the bell. Domino’s Pizza dropped close to 4% after reporting U.S. same-store sales grew just 0.9% in the first quarter, missing the 2.72% increase analysts had expected, per LSEG data via Reuters. Rising living costs and economic jitters are pinching diners’ budgets, the company said.
It all comes down to the Fed. Policymakers are widely expected to leave the benchmark overnight rate untouched at 3.50% to 3.75% when they meet Wednesday, according to Reuters. Still, Chair Jerome Powell’s remarks will be in focus for any hint that surging oil prices might keep inflation stubborn enough to block rate cuts.
This rally has a fragile side. Should oil prices keep climbing, the Fed hold off on easing, or Big Tech stumble in persuading investors that AI spending brings real cash flow, support for stocks could evaporate fast. “Even if we do get a deal, oil is not going back to pre-war levels,” Jefferies strategist Mohit Kumar said. He flagged the risk of stagflation — that mix of higher prices and sluggish growth that markets may need to price in, as reported by SWI swissinfo.ch.
Futures are signaling caution rather than any dramatic shift. “Markets are looking for a new narrative and are jumping back to the AI boom for now,” said Joachim Klement, head of strategy at Panmure Liberum. With crude prices on the rise and the Fed meeting just two days out, the open should reveal whether that story still has legs, as reported by SWI swissinfo.ch.
