Premarket: U.S. stock futures muted as oil holds near April highs ahead of Fed decision

U.S. stock index futures were little changed on Tuesday as crude oil hovered near its highest in six weeks, while investor attention turned to a slate of key corporate ⁠earnings and ​the Federal Reserve’s interest-rate decision this week.

The Fed is widely expected to hold rates steady on Wednesday following an increase last month, though markets are pricing in at least two more hikes by mid-2027 as key inflation indicators remain elevated amid the ongoing U.S.-Iran ​conflict.

“While we don’t expect a rate move this week, ‌we wouldn’t be against a hike even though we’re not convinced of its urgency,” said John Velis, head of Americas Strategy at BNY.

“We think maintaining credibility is paramount for the Fed, and as (Fed Chair Kevin) Warsh likes to remind us, the inflation target has been exceeded for well over 60 straight ‌months.”

Crude oil ​prices were slightly higher ‌on Tuesday after falling in the previous session, with Brent crude near its highest level since ​late April.

At 05:17 a.m. ET, Dow E-minis were up ⁠70 points, or 0.14%, S&P 500 E-minis were up 3.75 points, or 0.05%, and ⁠Nasdaq 100 E-minis were up 2 points, or 0.01%.

Megacap and growth stocks were mixed. Tesla shares climbed ​close to 1% in premarket trading, after jumping more than 5% in the last session.

Meta Platforms was flat after the company increased its largest-ever equity fundraising to $97.5 billion to fund AI expansion.

Whirlpool dropped 8.8% after the home appliance maker reported a third-quarter loss and missed revenue estimates.

Coca-Cola, Boeing and PayPal are some of the major ⁠companies scheduled to report earnings before markets open on Tuesday.

Hyperscalers Alphabet, Microsoft and Amazon.com are set to report later this week. Their results will be parsed for signs of whether the hefty AI investments are translating into growth.

Jefferies equity strategist Jane Gibbons said in a note that growth for ‘Magnificent 7’ names could trail the rest of the S&P 500. The brokerage sees ⁠earnings for the group of the biggest US tech ​stocks growing at 21% versus 32% for the rest for the benchmark.

The AI trade has come ⁠under pressure this month on growing concerns that debt-funded spending may become harder to justify in the face of rising borrowing ‌costs.

Investor sentiment improved somewhat in the previous session, however, after AI lab Anthropic revealed its IPO filing, ​taking a big step towards a potentially record-breaking listing even as it disclosed steep losses and security concerns.

The development had helped lift chip stocks after a bruising few weeks, along with other AI beneficiaries, including photonic product makers and neoclouds.

Separately, investors are ​looking ahead to the November 3 midterm elections, which will decide control of the U.S. Congress.

World stocks were mixed Tuesday ahead of major corporate earnings reports and central-bank decisions.

In early European trading, Germany’s DAX slipped 0.1 per cent to 25,373.71, while the CAC 40 in Paris dropped 0.3 per cent to 7,824.83. Britain’s FTSE 100 fell 1 per cent to 10,664.58.

Asian shares mostly gained as benchmarks in Tokyo and Seoul were lifted by buying of AI-related stocks.

South Korea’s Kospi briefly gained more than 4 per cent and closed 3.1 per cent higher, at 5,638.34. Computer chipmaker SK Hynix rallied 5.2 per cent and Samsung Electronics gained 4.2 per cent.

SK Hynix is set to release its third-quarter earnings Wednesday, a day before rival Samsung Electronics reports its results. Samsung has estimated its operating profit for the last quarter will be up nearly eight-fold from a year earlier.

Strong global demand for semiconductors is driving strong growth, and the South Korean economy expanded at a better-than- expected 3.4 per cent annual rate in July-September, according to data released Tuesday.

Tokyo’s Nikkei 225 added 1.7 per cent to 63,268.37. Testing equipment maker Advantest jumped 9.6 per cent and OpenAI investor SoftBank Group climbed 5 per cent.

Hong Kong’s Hang Seng gave up early gains, slipping 0.7 per cent to 23,041.32, while the Shanghai Composite dropped 1.3 per cent to 3,648.30.

Traders were watching for any major announcements from a closed-door meeting in Beijing of top leaders of China’s ruling Communist Party.

Taiwan’s Taiex rose 0.1 per cent. India’s Sensex slipped 0.5 per cent.

In Australia, the S&P/ASX 200 advanced 0.5 per cent to 8,852.10.

In other dealings Tuesday, Brent crude oil, the international standard, rose 0.7 per cent to $111.54 a barrel. U.S. benchmark crude gained 0.7 per cent, to $102.47 per barrel.

The dollar rose to 157.75 Japanese yen from 157.50 yen. The euro slipped to $1.1154 from $1.1176.

Reuters and The Associated Press