NEW YORK, July 27, 2026, 09:02 EDT — U.S. stock index futures advanced in premarket trading on Monday as crude prices declined, alleviating short-term inflation fears ahead of the Federal Reserve's policy meeting and a slew of earnings reports from major technology companies.
Futures for the Dow Jones Industrial Average rose 1.11%, while S&P 500 futures gained 0.82% and Nasdaq 100 futures climbed 1.31%. The gains were driven by a sharp drop in oil prices, with West Texas Intermediate crude falling 5.99% to $83.96 per barrel and Brent crude slipping 6.61% to $90.38 per barrel, as a pause in U.S.-Iran tensions weighed on prices.
The decline in oil prices provided a clear boost to fuel-sensitive sectors. Travel and leisure stocks rallied, with United Airlines Holdings (NASDAQ:UAL) climbing 4%, Southwest Airlines (NYSE:LUV) up 3.6%, Royal Caribbean Group (NYSE:RCL) gaining 2.4%, and Carnival (NYSE:CCL) rising 3.2%. In contrast, energy producers were hit hard, with Occidental Petroleum (NYSE:OXY) dropping 4% and Exxon Mobil (NYSE:XOM) declining 3.1%. The average performance gap between travel stocks and producers stood at 6.9 percentage points, signaling that Monday's primary trade was a reversal of last week's energy-shock moves.
Economic data added to the positive tone. Core capital-goods orders, a key proxy for business investment, increased 0.9% in June, surpassing the consensus estimate of 0.8%. Shipments of core capital goods rose 1.9%, compared to a 0.2% gain in May, indicating robust equipment investment in the second quarter. The data supports expectations for continued economic growth, while lower oil prices help curb inflation forecasts.
The 10-year Treasury yield dropped 4.3 basis points to 4.64%, reflecting relief from easing oil prices. Despite the decline, rate futures still indicated a 31% probability of a rate hike at this week's Fed meeting. The Federal Reserve's two-day meeting begins Tuesday, with the policy statement due Wednesday at 2:00 p.m. EDT, followed by a press conference at 2:30 p.m. GDP and June Personal Consumption Expenditures (PCE) data are scheduled for release Thursday at 8:30 a.m.
Investors are also focused on megacap earnings. Microsoft (NASDAQ:MSFT) will report results after the close on Wednesday, while Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) are also scheduled to release earnings this week. Roughly one-third of S&P 500 companies are set to report this week, with combined earnings expected to rise 26.5% year-over-year.
Despite the rally, risks remain. The truce between the U.S. and Iran is still uncertain, shipping through the Strait of Hormuz remains subdued, and attacks have put another key Red Sea corridor at risk. A fresh surge in oil prices could quickly push yields and futures higher. At 09:02 EDT, investors were focused on lower input costs rather than a confirmed earnings reset, but upcoming Fed actions and megacap earnings will challenge that view.
