U.S. stock futures slipped early Monday, signaling a cautious start to a pivotal week for Wall Street. Dow futures lost 86 points, or 0.2%, while S&P 500 futures fell 8 points, or 0.1%, and Nasdaq 100 futures dropped 19 points, also 0.1%, as of 03:30 ET. The pullback comes as the S&P 500 and Nasdaq hover near record highs, leaving little margin for error.
Oil prices surged, with Brent crude jumping $2.46 to $101.59 a barrel and U.S. crude gaining $2.20 to $96.60. The rise was fueled by ongoing shipping disruptions near the Strait of Hormuz, a critical chokepoint for global oil and gas trade, as U.S.-Iran negotiations remain deadlocked. Iran has reportedly proposed reopening the strait through Pakistani intermediaries, but the move has added uncertainty to energy markets, especially after President Donald Trump canceled a planned envoy visit to Islamabad.
This week's earnings slate is heavy, with tech giants representing 44% of the S&P 500's market cap reporting. Microsoft, Alphabet, Amazon, and Meta Platforms all release results on Wednesday, with investors focused on capital spending plans. Apple follows on Thursday. In premarket trading, tech stocks showed mixed moves: Nvidia edged up 0.3%, Intel climbed 1.6%, AMD picked up 0.2%, and Qualcomm surged 5.4%, while Apple dropped 0.5% and Tesla edged down 0.1%.
The Federal Reserve is widely expected to leave rates unchanged at its meeting this week, which could be Jerome Powell's final as chair. However, Powell's commentary on inflation, particularly the impact of rising oil prices, and the policy outlook will be closely watched. Goldman Sachs analysts have flagged the risk of "non-linear price increases" if oil inventories fall too far, keeping inflation expectations sticky and reducing the likelihood of rate cuts.
"This may be the most important week for markets so far this year," said Glen Smith, chief investment officer at GDS Wealth Management, in an interview with Barron's. With earnings driving stock moves, the focus has shifted back to corporate fundamentals. Verizon reports before the bell on Monday, offering a first look at defensive names ahead of the tech wave.
Oil's persistence above $100 a barrel is a key concern, as it keeps inflation expectations elevated and complicates the Fed's path. The cautious mood in premarket trading reflects these uncertainties, with chip stocks attracting interest but broader questions about AI budgets, oil negotiations, and Fed signals remaining unresolved.
