Stock Futures Higher, Oil Lower as Investors Return to Risk

Stock futures rose and Treasury yields eased, as falling oil prices encouraged investors to make a cautious return to risk after last week's tech selloff.

Nasdaq futures rose 0.6%, while futures for the S&P 500 and Dow Jones Industrial Average both climbed around 0.3%. Artificial-intelligence stocks rallied after heavy selling last week, ending in the Nasdaq's worst one-day decline since June on Friday. Asian stock indexes largely rose as some money returned to AI, with the South Korean Kospi closing 2.2% higher, though Japan's Nikkei 225 slipped 0.3%. European indexes were mixed in choppy trade.

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Investors are grappling with mounting doubts around AI, Deutsche Bank's Jim Reid wrote in a note. AI stocks will be back in focus when tech giant Apple reports earnings after the closing bell Monday.

In the bond market, Treasury yields slipped at the longer end of the curve. Ten-year yields fell back to hover around 4.910%, while 30-year yields traded below 5.300%. Two-year yields crept higher, trading around 4.600% as investors continued to expect a Federal Reserve rate hike in December.

Oil prices fell, with Brent crude for January delivery dropping 3.9% to trade around $109 a barrel, while the West Texas Intermediate contract for December fell below $100 a barrel. Prices rose last week as fears grew that the U.S. could resume strikes against Iran following the midterm elections. However, greater hopes for diplomatic advances on Monday saw oil return some of the week's gains.

Gold futures ticked higher but continued to trade below $4,000 a troy ounce. The dollar weakened against a basket of global currencies, and bitcoin traded flat at $78,200, around 5% below its level before last week's hack of Binance.

The week ahead will be shaped by U.S. midterm elections. Investors will watch final-stage polls closely, with a potential Democratic sweep of the House and Senate viewed as negative for the AI trade amid voter concern around data centers. As well as Apple, Palantir and Vertex Pharmaceuticals are among companies reporting after the closing bell.

Write to Joe Stonor at josephmichael.stonor@wsj.com

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