US stock futures rose on positive investor sentiment on expectations of a rate cut by the Federal Reserve (Fed) and encouraging developments in US-China trade talks.
The S&P 500 index rose 0.7% to 6,873.75 points, the Dow Jones jumped 0.6% to 25,726.75 points, while the technology-focused Nasdaq rose 0.9% to 25,726.75 points.
Investor sentiment continued to strengthen after data showed US consumer prices fell more than expected in September, raising expectations that the Fed will cut rates at its policy meeting on October 30 at 2:00 am Malaysia time.
The lower inflation data also raised expectations for a 25 basis point cut, and the market is now looking for signs that the central bank will ease policy further in the coming months.
In other developments, US and Chinese officials reached a “framework understanding” on key trade issues over the weekend at the ASEAN Summit in Kuala Lumpur.
US Treasury Secretary Scott Bessent confirmed that the two sides had agreed to postpone new tariff threats and halt China’s planned restrictions on rare earth exports.
The breakthrough paves the way for US President Donald Trump and Chinese President Xi Jinping to meet later this week to finalise the deal.
The positive development is seen as a sign that tariff tensions between the two countries are about to ease, boosting global appeal for risk assets.
Meanwhile, the focus will turn to corporate earnings season, with five of the ‘Magnificent Seven’ tech giants due to report this week.
Microsoft, Meta Platforms and Alphabet are due to report results on Wednesday, followed by Apple and Amazon on Thursday.
Investors will now be looking for updates on artificial intelligence (AI) investment, cloud service demand and consumer spending trends.
