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U.S. futures remain subdued on Monday at the start of a week which will bring Nvidia (NASDAQ:NVDA) earnings and inflation data that will likely cement expectations for September rate cuts.

1. Futures little changed with markets near records

U.S. stock futures were little changed on Monday as markets hovered near record highs after the Federal Reserve gave a clear signal that the long-awaited start of rate cuts would come next month.

By 03:48 ET (07:48 GMT), the Dow futures contract and the S&P 500 futures were both flat, while Nasdaq 100 futures rose by 35 points, or 0.1%.

Markets are coming off a strong week with the S&P 500’s Friday close putting the benchmark index less than 1% away from its all time high reached in mid July.

The three main indexes rallied after Fed Chair Jerome Powell stated that “the time has come” to lower the Fed funds target rate, and “the upside risks of inflation have diminished.”

These remarks appeared to guarantee a rate cut at the Fed’s September 18 meeting, marking the first such cut in over four years.

2. U.S. data

This week, the data-dependent Fed will have several economic indicators to consider ahead of its September rate decision, including the Commerce Department’s revised second-quarter GDP and the broad-ranging Personal Consumption Expenditures (PCE) report, which includes the Fed’s preferred inflation metric, the PCE price index.

Friday’s PCE data will be closely monitored, though recent remarks by Fed policymakers suggest that the Fed’s focus has shifted toward labor market risks and that inflation is close enough to target to facilitate rate cuts starting next month.

The economic calendar also includes a report on durable goods orders later Monday along with the weekly report on initial jobless claims on Thursday.

3. Nvidia earnings

The rally in U.S. markets will face a test when AI-darling Nvidia reports earnings after the close on Wednesday.

Nvidia stock is up approximately 150% year-to-date, accounting for around a quarter of the S&P 500’s 17% year-to-date gain. However, the impressive multi-year run and AI-mania have drawn comparisons to the dot-com craze that imploded over two decades ago.

The earnings report, along with guidance on corporate investments in AI, could be a crucial turning point for market sentiment heading into a historically volatile time of year.

The results come at the end of an earnings season where investors have viewed big tech companies with skepticism when their earnings fail to meet high valuations or significant spending on AI.

4. Oil prices rise

Oil prices increased on Monday amid concerns that any potential escalation of the conflict in the Middle East could disrupt regional oil supplies, while the prospect of imminent U.S. rate cuts boosted global economic and fuel demand outlooks.

Brent crude futures climbed 74 cents, or 0.9%, to $78.89 a barrel by 03:48 ET (07:48 GMT), while U.S. crude futures were at $75.62 a barrel, up 75 cents, or 1.0%.

Both oil benchmarks gained over 2% on Friday as expectations for September rate cuts by the Fed solidified. However, oil prices still ended last week lower due to a poor outlook for major economies impacting fuel demand.

Oil traders remain cautious regarding plans by the Organization of Petroleum Exporting Countries (OPEC) and its allies, or OPEC+, to raise output later this year.

5. NASA snubs Boeing

NASA announced Saturday that it’s too risky to bring two astronauts stranded aboard the International Space Station back home in Boeing’s faulty new capsule and they will now return in a SpaceX craft in early-2025.

Astronauts Butch Wilmore and Sunita Williams were stranded aboard the ISS in June after Boeing’s Starliner capsule malfunctioned during a test flight. The flight was initially planned to last at least nine days but was delayed indefinitely as the agency raced to identify the issues with the Starliner.

NASA’s decision to proceed with SpaceX marks further trouble for Boeing (NYSE:BA), which was already under scrutiny regarding the safety standards of its commercial aircraft.

SpaceX has a contract with NASA to supply cargo to the ISS and has completed nine successful missions to and from the ISS as of April 2024.

— Reuters contributed reporting