Oct 27 (Reuters) – US 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 US-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 US Congress.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)
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