Catalyst-filled trading week ahead; oil prices ease - what’s moving markets

 Futures linked to the main U.S. averages tick up prior to a catalyst-filled week. Oil prices slip after a sharp jump in the prior week, as uncertainty surrounds a possible resurgence of fighting between the U.S. and Iran. Verizon will be in the vanguard of a deluge of corporate earnings this week, while social unrest in France and a surprising election result in Brazil are also in focus. 

1. Futures rise

U.S. stock futures pointed higher ahead of a busy trading week that will feature a series of potentially market-moving events, including a raft of corporate earnings and key central bank interest rate decisions.

By 04:43 ET (08:43 GMT), the S&P 500 futures contract had risen by 23 points, or 0.3%, Nasdaq 100 futures had gained 64 points, or 0.2%, and Dow futures had advanced by 241 points, or 0.5%.

The main averages on Wall Street were buffeted on Friday, with all three of the indices retreating. A confluence of factors weighed on sentiment. Anxieties around debt-fueled spending on artificial intelligence were exacerbated by worries over higher-for-longer interest rates, while oil prices once again climbed on reports of possible renewed strikes between the U.S. and Iran.

At the same time, social unrest and a strained fiscal position sparked ructions in French bond markets, presenting a further headache for investors. U.S. Treasuries did put in a strong performance, although some analysts that this was thanks to a flight to the perceived safety of American debt against a murky investment landscape.

2. Oil eases

Oil prices dropped marginally following reports that Qatari mediators visited Tehran over the weekend in a bid to cool tensions with Washington.

Recent media reports have suggested that U.S. President Donald Trump is mulling over a resumption of attacks on Iran after the upcoming American midterm elections in November.

On Sunday, Trump told Fox News that it is "getting to be decision time" on whether he will carry out the fresh bombardments of Iran or make a deal with Tehran. Last week, Trump hinted at another military operation against Iran, prompting the Islamic Republic to threaten their own retaliatory measures.

Also hovering in the background has been an escalating conflict between Iran-backed Houthi militants in Yemen and Saudi Arabia. An exchange of strikes have cropped up fears of new disruptions to recovering oil flows out of the Middle East.

Brent crude futures, the global oil benchmark, were last trading down by 1.6% at $114.92 a barrel, while U.S. West Texas Intermediate crude futures had slipped by 2.0% to $101.25 a barrel.

The Brent contract surged by more than 6% last week, touching its highest weekly close since 2022.

3. Verizon to report amid earnings deluge

While the turmoil in the Persian Gulf remains front of mind for markets, much of the attention in the coming days will likely turn to a flood of U.S. corporate earnings.

Only about a fourth of the companies on the S&P 500 have reported their latest quarterly results, but the returns so far have been healthy, according to analysts at Vital Knowledge.

The figures have indicated that underlying demand has been resilient, they said, adding that cost controls and price increases have also bolstered earnings. Tech sector earnings are likely to come under intense scrutiny, as investors hunt for any signs that the recent AI infrastructure spending fears are bleeding into the performance of this critical industry.

On Monday, Verizon will highlight the slate of reports before the opening bell. The telecommunications group has been battling fierce competition from traditional vendors like AT&T and T-Mobile, as well as from upstarts such as Elon Musk’s SpaceX.

4. French protests stabilize

Meanwhile, France’s 10-year government bond yields edged lower. French authorities appeared to quell mass demonstrations across the country over the weekend, helping soothe jitters over continued social unrest in Europe’s second-largest economy.

Public anger, which had been fueled initially by student protests, has been rising over wages, elevated living costs and public services in France. Labor leaders in the country called for further protests next weekend, along with a nationwide strike on November 5.

But France got a boost on Friday when Moody’s maintained their Aa3 rating for French debt, defying expectations that it would cut the outlook by one notch. On Monday, French bond futures have ticked up, while the euro has strengthened.

5. Brazilian President Lula wins fourth term

Elsewhere, Luiz Inacio Lula da Silva on Sunday evening won a fourth term as Brazil’s president, narrowly beating Senator Flavio Bolsonaro despite lagging him in the first round.

Lula won roughly 51.8% of votes, while Bolsonaro took 48.2%, Brazil’s Superior Electoral Court said, with 99% of votes counted.

Bolsonaro, however, refused to concede defeat to Lula, and called for an annulment of the vote. Bolsonaro claimed that the Supreme Court had interfered in the election by extending voting by two hours in some areas.

The result wrong-footed a market that had increasingly priced a Bolsonaro victory, analysts at Deutsche Bank noted. A Tokyo-listed ETF tracking Brazilian stocks slumped in Asian trading.

"Lula’s surprise win in the second round of Brazil’s presidential election will dash hopes for reforms that would improve the public finances and strengthen growth prospects. A sharp fall in the real and equities and a rise in bond yields, more than reversing the rally since the first-round vote, are likely," analysts at Capital Economics said in a note.