North American Morning Briefing: Stock Futures Point Toward Gains as Fed Decision Nears

Stocks were poised for gains Monday as a crucial week in terms of

corporate earnings as well as fiscal policy gets underway.

About 36% of S&P 500 companies, including Amazon, Alphabet and Microsoft are scheduled to report quarterly results this week, according to FactSet, and the Federal Reserve will announce an interest-rate decision on Wednesday.

The central bank is widely expected to leave the Fed Funds rate on hold.

"Our best guess is that many were caught off guard by the market's very hawkish interpretation of the September FOMC meeting, and they aren't yet convinced that the Fed needs to embark on a full-throated tightening cycle," J.P. Morgan said.

BondBloxx Investment Management contends that the market views the Fed's decision this week as a pause and not necessarily the end of the tightening cycle.

Despite investors juggling artificial-intelligence valuation worries and fresh fighting in the Middle East, the Nasdaq, S&P 500 and Dow were in positive territory.

Analysts expect companies in the S&P 500 to report a 30% jump in third-quarter earnings from a year ago, according to FactSet, the Wall Street Journal reported.

Elsewhere, the upset presidential election victory of Luiz Inácio Lula da Silva in Brazil was expected to hurt Brazilian stocks.

Stocks to Watch

CoreWeave fell 2% Nebius Group declined 2%, Applied Digital fell 1% and so too did Core Scientific after Elon Musk warned yesterday hundreds of neocloud companies could see "guppy-level death."

U.S. shares of Brazilian companies tumbled after Brazil's presidential election. XP declined more than 40%, Petrobras dropped more than 20% and MercadoLibre fell 10%.

Watch For:

U.S. Chicago Fed National Activity Index (CFNAI) for September; Verizon 3Q earnings

Today's Top Headlines/Must Reads:

- Why the Fed Is Expected to Hold Rates Steady Despite a Case for Raising Them

- How the Proposed California Billionaire Tax Became a 'Hot Mess' for Democrats

- Why So Many Shoppers Think Retailers Are Using AI to Jack Up Prices

MARKET WRAPS Forex:

The dollar was flat against a basket of currencies as investors looked ahead to the Fed decision on Wednesday. With a hold nearly fully priced, the foreign exchange reaction hinges on tone, Monex Europe said.

The euro was steady but the currency could struggle to recover as concerns about France's debt persist despite Moody's maintaining the country's Aa3 rating on Friday, ING said.

"While welcome news in the short term, we will need to see concrete and material progress on the French budget over the coming months to take pressure off the euro."

Sterling fell against the dollar and the euro on investor jitters ahead of the U.K. budget on Wednesday. The country's treasury chief is expected to give extra support to the state's business lender and infrastructure bank, according to the Financial Times.

"This would mark a substantial increase in cash borrowing relative to our baseline expectations," Deutsche Bank said.

Bonds:

Treasury yields fell in the run-up to Wednesday's Fed interest-rate decision.

Money markets were assigning a 90% probability for interest rates to stay unchanged.

Energy:

Oil prices pulled back from recent highs Monday but held above $100 a barrel as traders weighed diplomatic efforts to ease U.S.-Iran tensions against persistent regional supply risks and fresh Houthi strikes on Saudi Arabia.

December Brent crude futures fell 1.8%, while December West Texas Intermediate futures dropped 2.2%.

Metals:

Gold futures ticked higher in early European trading, supported by softer oil prices and as investors awaited the Fed's policy decision.

"A pullback in oil prices in early trade is helping to limit some inflation pass-through expectations though energy futures still remain elevated. The next major catalyst for gold markets will be the FOMC decision this week and whether the Fed shifts its tone to more overtly hawkish," MUFG said.

TODAY'S TOP HEADLINES

Santander Shares Drop After Surprise Result in Brazilian Election

Banco Santander shares fell after a surprise victory for leftist candidate President Luiz Inacio Lula da Silva over right-wing contender Flavio Bolsonaro in Sunday's presidential election.

Shares in Santander were down 5.3% at 10.90 euros during early European trading on Monday.

Saudi Arabia's Sabic Profit Rises Despite Lower Sales Volume

Saudi Basic Industries Corp. reported an increase in third-quarter net profit, buoyed by higher average selling prices and gains from investments, even as regional shipping disruptions weighed on sales volumes.

Sabic, one of the world's largest petrochemical manufacturers, said Sunday that net profit rose to 499 million Saudi riyals ($133 million) from 434 million riyals in the same period a year earlier. Revenue fell to 28.17 billion riyals from 29.08 billion riyals.

Bayer Gets in China Its First Global Approval for Stroke Prevention Drug

Bayer said it received regulatory authorization to launch a new drug to prevent recurrent stroke in China, winning the first global approval for a new class of medicines.

The German pharmaceutical group said the decision from China's National Medical Products Administration hands it the first approval worldwide for a class of drugs called Factor XIa inhibitors, which aim to slow down the activity of a protein that regulates how the body forms clots without increasing the risk of bleeding.

Roche Targets Emerging Oncology Market With New Lung-Cancer Drug

MADRID-Roche Holding said it expects a pill it is developing to become the new standard treatment for an advanced form of lung cancer, and the company's first shot at an emerging field within the oncology market.

The Swiss drugmaker is working on several drugs that target a driver of cancers that long eluded the industry. A breakthrough in pancreatic cancer from U.S. biotech Revolution Medicines put the field on investors' radar, and Roche aims to venture into it with lung-cancer medicine divarasib.

ECB Expected to Leave Key Rate Unchanged Amid French Bond Drama

The European Central Bank is expected to leave its key interest rate unchanged Thursday, avoiding additional pressure on French government bonds at a time when there are few signs that a jump in energy costs is raising prices of other goods and services.

The eurozone's central bank raised borrowing costs in September for the second time since the war between the U.S. and Iran began to push energy prices sharply higher. Since then, yields on French government bonds have risen to highs not seen since the early years of this century.

Two AI Chipmakers Make Up 34% of America's Earnings Boom

Wall Street has rested much of its optimism about the stock market on a surge in corporate earnings. The catch is that the profit growth is being driven by a handful of AI giants.

Analysts expect companies in the S&P 500 to report a 30% jump in third-quarter earnings from a year ago, according to FactSet, boosting investor confidence that the good times can keep rolling so long as businesses keep printing money. But just two companies-Nvidia and Micron-account for 34% of that growth, according to a Dow Jones Market Data analysis.

France's Nuclear Forces Bring In Neighbors to Keep Russia in Check

PARIS-France, working with European allies, is strengthening and expanding its role as a nuclear-weapons power in an effort to bolster deterrence against Russian attacks as Europe's confidence in American security guarantees wavers.

Dubbed "forward deterrence" by President Emmanuel Macron, the plan envisions deployments of French nuclear-enabled Rafale jet fighters across Europe and the creation of new infrastructure, communications, early-warning and intelligence-sharing links with these allies.

Lula Wins Fourth Term in Brazil Election Upset

SÃO PAULO-President Luiz Inácio Lula da Silva clung to power in Sunday's presidential election by orchestrating a surprise victory over Flávio Bolsonaro, winning an unprecedented fourth term and cementing his place as one of the world's longest-serving democratically elected leaders.

The leftist leader, just two days away from turning 81, won 51.8% of the vote against 48.2% for Bolsonaro, electoral authorities said with over 99% of the votes counted. The victory came after da Silva's Workers' Party requested that voting be extended Sunday, after reports that some local governments had reduced the number of buses serving poorer voters, who tend to support the president.

Le Pen Pitches Herself as France's Unifier After Another Weekend of Protests

PARIS-Marine Le Pen, France's leading right-wing presidential candidate, opened her campaign for next year's elections by casting herself as a unifying figure to revive France after weeks of unrest fueled by economic hardship and anger at the government.

Politicians from both right and left have been trying to seize the initiative as this month's protests swept through France. On Saturday more than 400,000 people took to the streets to rail against the rising cost of living and deteriorating public services. While the demonstrations largely were peaceful, clashes with police broke out in several regions in an echo of the looting and rioting a week earlier.

Venezuela's Machado Returns Home, Challenging U.S.-Backed Government

Venezuelan opposition leader María Corina Machado returned home Sunday after nearly 11 months in exile, putting new pressure on the U.S.-backed interim government and potentially complicating the Trump administration's efforts to manage a gradual political transition.

"I am here. With you," Machado posted on X on Sunday morning. In a video posted by her party, Machado was welcomed by a crowd of supporters at the Sanctuary of the Divine Shepherdess in the city of Barquisimeto in central Venezuela.

(MORE TO FOLLOW) Dow Jones Newswires

October 26, 2026 06:20 ET (10:20 GMT)