Dow futures gain up to 150 points after steep losses; Here's why this week is crucial

Futures on Wall Street have resumed trading on Sunday evening local time with modest gains after witnessing steep selling pressure through the course of last week. The Dow futures and the Nasdaq futures are both trading with gains between 150 points to 200 points as trading resumed after the weekend break. The S&P 500 futures are little changed.

Friday's session saw the Dow Jones fall 650 points, as the effect of the higher crude oil prices spilt on to other sectors as well. For the S&P 500 and the Nasdaq, it was back-to-back weeks of losses. According to a note from Bank of America, investors are likely to remain risk-off well into November and therefore, they turn tactically risk-off till mid-November as well.

The note went on to add that the most popular themes are the ones that are affected the most in case sentiments turn, in this case being AI. The firm expects stocks, yields and the US Dollar to be lower during this period. On the flip side, UBS believes that the current sell-off does not change their stance that earnings will continue to support the equity markets.

It went on to add that AI demand remains strong and bond yields provide attractive income and just geopolitical tensions are not the only reason why investing should acquire a defensive tilt. Brent crude prices continue to remain at elevated levels, above the $115 a barrel mark as US President Donald Trump said the decision is nearing with regards to Iran and that he has two options before him, either to "finish them off", or to make a deal. Why This Week Is Important For Wall Street?

This is an important week for Wall Street as it contains a blend of everything - From the Fed rate decision, to big tech results, and some key macro data reporting as well. The most important trigger will be the Fed rate decision, which will be reported on Wednesday night Indian time. According to the CME FedWatch tool, the probability of the Fed maintaining rates where they are this time around, currently stands at 90%.

Apart from the Fed decision, their preferred inflation gauge, the Personal Consumption Expenditure (PCE) inflation data will be reported on Thursday, a day after the policy, along with the advance Q3 GDP estimates and the weekly jobless claims. The week is also important for corporate earnings as companies such as Alphabet, and Microsoft among big tech names will be reporting their numbers after market hours on Wednesday. Amazon reports on Thursday after market hours, while others such as Visa, Coca-Cola, Boeing (Tuesday), GE Vernova (Wednesday), and Intel, Mastercard and Merck & Co. (Thursday), will also be reporting their quarterly numbers during the course of the week.

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Source: CNBC TV18