Global markets started the week on a calmer note on Monday. Asian shares rebounded, and US stock futures moved higher in early trading.
The gains followed a chaotic week for investors. The Democrats’ sweeping win in the US midterm elections set off a sharp unwinding of trades tied to artificial intelligence.
Wall Street managed to finish higher on Friday. That close appears to have helped steady the mood heading into the new week.
Buyers looking to pick up stocks at lower prices may have been encouraged to return. The week ahead is relatively light for major economic events, which gives markets some room to settle.
AI Earnings Put the Recovery to the Test
The calm remains fragile, and several tech companies are set to report earnings this week. Their results will help show whether the recent rebound in AI-linked stocks can hold.
CoreWeave is one of the companies investors will watch most closely. The cloud-computing firm has become a leading example of investor worries about whether AI spending will turn a profit.
Those worries center on the company’s large costs to build out its AI infrastructure. CoreWeave also carries a heavy debt load, which has added to the concerns.
Applied Materials and Cisco Systems are also due to release earnings this week. Both reports will add to the picture of how large tech companies are performing.
Nvidia is adding another source of uncertainty. The chipmaker has launched a board probe into reports that CEO Jensen Huang was the target of a Chinese intelligence effort.
The probe could bring more price swings to the AI trade as it tries to recover. The company has not yet shared the results of the review.
Inflation Data and Fed Bets Take Focus
Outside of tech, Tuesday’s US consumer price index report will draw attention. The report tracks changes in the prices that consumers pay for everyday goods and services.
The data follows last week’s jobs report, which came in well above estimates. The report showed that the US labor market remains strong and continues to grow.
The strong jobs data supported the case for the Federal Reserve to raise interest rates next month. Markets are now pricing in an 80% chance of a hike of at least 25 basis points.
A basis point is one hundredth of a percentage point. A 25-basis-point increase would lift the Fed’s benchmark rate by a quarter of a percentage point.
Traders will use the inflation figures to help judge the Fed’s next step. The CPI release is one of the few major economic reports on this week’s calendar.
Oil markets are offering some relief to investors. Prices have calmed following comments from US President Donald Trump on Sunday.
Trump said he was highly unlikely to order fresh attacks on Iran as long as talks to end the conflict keep making progress.
