US stock futures are expected to open on a firm note, with reports on the start of US-China AI talks likely to be viewed as a positive catalyst. Attention will also focus this week on business sentiment indicators such as the PMI.
The three major US stock indexes finished mixed in the previous session. The Dow narrowed its decline but was still down about $95 at the close, while the S&P 500 and Nasdaq moved into positive territory after the midpoint of the session. Although released industrial production and leading economic indicators were weak, lower oil prices supported a recovery in technology stocks and underpinned the market.
Today, reports that the US and China had agreed at a summit between their leaders to begin talks on AI are expected to drive buying in related sectors and support the market. While uncertainty continues in the Middle East, a pause in the rise in oil prices could also prove supportive.
However, recently released economic indicators have highlighted a deterioration in business sentiment. This week's manufacturing and services PMIs are both expected to come in below their previous readings, and some market participants believe this could become a selling catalyst.
Meanwhile, although expectations for further rate hikes by the Federal Reserve remain, the central bank could soften its hawkish stance, which may help limit excessive selling.