U.S. Stock Futures Mixed

U.S. stock futures traded in a mixed fashion on Monday as investors anticipated key earnings from Nvidia (NASDAQ:NVDA) and comments from several Fed officials.

By 06:00 ET (11:00 GMT), the Dow Futures contract was down 110 points, or 0.3%, while S&P 500 Futures rose by 5 points, or 0.1%, and Nasdaq 100 Futures gained 85 points, or 0.4%.

The three main indices retreated last week, falling back from recent highs after Fed chief Jerome Powell indicated that the U.S. central bank was not “in a hurry” to reduce interest rates further.

S&P Pullback Starting?

The pullback in the S&P 500 may have commenced, with the index potentially retracting by 5%-10%, according to RBC Capital Markets strategists. Factors for this potential retreat include stretched valuations, futures market positioning, and a recent bullish sentiment history, which have often preceded market downturns since late 2022.

Nvidia Earnings in Focus

Nvidia's upcoming earnings report is highly anticipated this week. The chipmaker, pivotal in this year’s AI surge, is set to unveil its third quarter results after the market closes on Wednesday. These results will likely indicate investors’ interest in tech stocks, the AI sector, and overall equity sentiment after a post-election rally halted.

Nvidia’s chips are regarded as the gold standard in AI, and the company’s shares have soared approximately 200% this year, outsizing Apple (NASDAQ:AAPL) to become the world’s largest company by market capitalization.

Additionally, Walmart (NYSE:WMT) and Lowe’s (NYSE:LOW) will also report this week, providing fresh insights into consumer spending trends. So far, 93% of S&P 500 companies have reported results; three-quarters exceeded earnings per share (EPS) expectations, while 61% surpassed revenue projections based on FactSet data.

Tesla Soars on Self-Driving Hopes

Tesla (NASDAQ:TSLA) stock surged 8% in premarket trading on Monday, following reports that the new Trump administration will prioritize establishing a federal framework for fully self-driving vehicles. Spirit Airlines (NYSE:SAVE) shares rose 2.8% after the carrier filed for bankruptcy protection, reaching a prearranged deal with bondholders to aid its recovery, which it expects to complete by next quarter.

PMI Data in Spotlight

The upcoming week will feature less economic activity in the U.S., with a significant focus on manufacturing and service sector PMI data scheduled for Friday. This data may offer early insights into how companies are responding to the Trump administration's proposed trade tariffs.

Investors will also hear from several Federal Reserve officials, including Chicago Fed President Austan Goolsbee, Kansas Fed President Jeffrey Schmid, and Cleveland Fed President Beth Hammack.

Crude Gains on Ukraine/Russia Fears

Crude oil prices climbed on Monday amidst escalating conflicts between Russia and Ukraine. However, these gains may be limited by ongoing concerns of a supply glut in the upcoming year. By 06:00 ET, U.S. crude futures (WTI) rose 0.7% to $67.37 a barrel, while the Brent contract gained 0.7% to $71.55 a barrel.

Reports indicate that President Joe Biden's administration has permitted Ukraine to utilize U.S.-made weapons for deeper strikes into Russia, responding to Russia's deployment of North Korean troops.

Although there has been little recent effect on Russian oil exports from the conflict, targeting oil infrastructure could intensify oil market volatility.

Last week, benchmark contracts dropped over 3% due to weak data from China, fueled by the International Energy Agency’s forecast predicting that global oil supply will outpace demand in 2025, even with cuts from top producers in effect.