US futures rise with Fed in focus, Alphabet up in premarket trading

NEW YORK / WAM/ BLOOMBERG

Stocks rose as investors awaited near-term trading cues in a busy week of inflation data and policy decisions from the Federal Reserve and Japan. Futures on the S&P 500 and Nasdaq 100 climbed after Bloomberg reported that Apple Inc is in talks to build Google’s Gemini artificial intelligence engine into the iPhone. Google parent company Alphabet Inc advanced as much as 3 percent in premarket trading, while Apple added as much as 0.8 percent. European stocks edged higher.
Bets are mounting that the Bank of Japan will end its negative-rate policy at its meeting on Tuesday, while the UK’s policy decision and inflation data are due later in the week. The main focus comes on Wednesday, when Fed policymakers gather for a decision that has the potential to set the tone for global stocks for the next quarter.
While Fed Chairman Jerome Powell indicated the central bank was close to having the confidence to cut, bond traders appear to have painfully surrendered to a higher-for-longer reality. The 10-year Treasury yield held near a three-week high on Monday, having risen more than 20 basis points last week. A gauge of the dollar was steady. “The Fed may have less confidence on inflation than before, but it still has confidence in the disinflation trend,” Bank of America economists including Michael Gapen wrote in a note to clients. In Japan, the Nikkei 225 index climbed the most in a month and the yen traded weaker against the dollar, amid signs markets have priced in the potential for an interest-rate increase. “Japanese stocks are rising, driven by weakness of the yen,
and expectations that the currency won’t strengthen even if the central bank hikes,” said Charu Chanana, a strategist at Saxo Capital Markets based in Singapore.
Elsewhere this week, the Reserve Bank of Australia is set to extend its rate pause while Bank Indonesia and the Bank of England also deliver policy decisions. Eurozone inflation data is due as well as Reddit Inc’s initial public offering. In commodities, oil hit a fresh four-month high — building on the biggest weekly advance in a month.