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Futures up: Dow 0.15%, S&P 500 0.32%, Nasdaq 0.51%
Oct 6 (Reuters) - U.S. stock index futures rose on
Monday, building on gains from last week as a flurry of
AI-related dealmaking and softer labor market trends bolstered
expectations for an interest-rate cut.
The resilience in equities came despite the federal
government shutdown showing little signs of resolution,
underscoring the persistent appetite for tech stocks and an
increased focus on the upcoming earnings season for cues on the
trajectory of the economy.
"The current AI infrastructure buildout is structurally more
durable than prior large cycles. It's funded by strong cash
flows and AI adoption can happen without costly consumer device
upgrades," BofA Securities senior analyst Vivek Arya said in a
note.
While the shutdown has delayed the release of the closely
watched nonfarm payrolls report, a slew of alternative
indicators last week pointed to tepid hiring, reinforcing
expectations that the Federal Reserve will cut rates by 25 bps
at its next meeting.
With little else on the calendar today, traders lacking
fresh catalysts will have to lean on that same data to guide
near-term positioning.
At 05:25 a.m. ET, Dow e-minis were up 72 points, or
0.15%, U.S. S&P 500 E-minis climbed 21.5 points, or
0.32%, and Nasdaq 100 E-minis rose 127.25 points, or
0.51%.
Goldman Sachs expects the military pay date on October 15 to
pressure lawmakers into ending their deadlock. If the shutdown
stretches beyond that date, roughly 1.3 million uniformed
military personnel would go unpaid, the brokerage said.
However, even if a deal is reached, the timeline for
releasing delayed data remains uncertain, increasing the
likelihood that the Fed will be operating with limited
visibility into the economy at its upcoming meeting.
The third-quarter earnings season that kicks off next week
will also test the durability of the rally.
"The next two weeks of earnings are going to matter more
than usual. There will be some economists that look for proxies
for the government data. The most 'boots on the ground' data
that the Fed is going to have is going to be the earnings data
and the forecasts," said Arnim Holzer, global macro strategist
at Easterly EAB.
By the end of October, 68% of companies representing 72% of
market cap will have reported, according to Goldman.
Among stocks, Micron Technology ( MU ) rose 4% premarket
after Morgan Stanley upgraded it to "overweight" from "equal
weight".
Crypto stocks gained with bitcoin near all-time
highs. Coinbase Global ( COIN ) rose 2.6%, Riot Platforms ( RIOT )
jumped 3.7% while MARA Holdings ( MARA ) climbed 3.2%.
(Reporting by Niket Nishant in Bengaluru; Editing by Devika
Syamnath)