U.S. stock futures steady after Nasdaq hits record on reduced Fed hike bets

The Nasdaq reached a record high closing price on Monday, propelled by a surge in Nvidia and Microsoft shares. Investors were focusing on declining oil prices and anticipating quarterly earnings reports. This marked the Nasdaq's second consecutive day of significant gains, following weaker-than-expected jobs data on Friday which reduced expectations for a Federal Reserve interest rate increase during its upcoming policy meeting.

The S&P 500 also experienced an increase and was near its August 13 record high closing level. Nvidia surged 2.1%, setting a record high and increasing its market value to $5.76 trillion. Microsoft rose 1.5%, while Meta Platforms and Tesla climbed approximately 2% each. Oil prices dropped after an increase in Middle Eastern crude exports and a commitment by the G7 nations to boost supplies.

Art Hogan, chief market strategist at B. Riley Wealth, noted that with light economic data and earnings coming up in a week, investors were seeking positive news, primarily due to lower energy prices. The third-quarter earnings season began with reports from major US banks. Analysts projected an S&P 500 earnings growth of over 30% year-over-year, primarily driven by AI-related stocks.

Following the jobs data on Friday showing a slowdown in US job growth, traders estimated a 24% chance of an interest rate hike at the Fed's October meeting, down from a 70% probability a week prior. PTC surged 33% after a US$22.6 billion all-cash acquisition of RXO by Schneider Electric. The S&P 500 ended the session at 7,773.95 points, the Nasdaq at 27,477.31 points, and the Dow Jones Industrial Average at 51,267.90 points.

The Nasdaq's previous record high was on September 22. Ten of the 11 S&P 500 sector indexes increased, with materials up 1.22% and communication services at 1.14%. Optimism about strong corporate earnings has helped US stocks surpass global competitors in the past six months, despite rising Treasury yields and higher oil prices due to the US conflict with Iran.

RXO increased over 22% following C.H. Robinson Worldwide's acquisition of transportation broker in a stock-and-cash deal for $5.8 billion. C.H. Robinson fell nearly 11%. Cerebras Systems rose 9% after OpenAI CEO Sam Altman announced the chip designer was a close partner and both companies had deep engagement to advance speed. Advancing issues surpassed falling ones within the S&P 500 by a ratio of 1.7-to-1.

The S&P 500 reported 13 new highs and 20 new lows; the Nasdaq recorded 57 new highs and 243 new lows. US exchange volume was relatively light, with 16.8 billion shares traded, compared to the 17.3 billion shares average of the previous 20 sessions.