US equity futures rise as crude oil dips ahead of rate decisions

US equity futures advanced and crude oil prices fell on Monday as market participants assessed geopolitical developments concerning Iran and prepared for a series of central bank rate decisions later this week. Nasdaq 100 futures climbed 0.6% and contracts on the S&P 500 gained 0.4% following a decline in the benchmark index on Friday. Brent crude dropped more than 1% to approximately $115 per barrel, retreating from its highest closing price since April, while West Texas Intermediate crude fell 1.5% to $101.71 per barrel.

President Donald Trump stated that it is "getting to be decision time" regarding whether to reach an agreement with Tehran or resume military attacks, amid escalating threats from Iran and the Houthis against Americans in the Middle East. The US is currently reducing diplomatic and military staffing in parts of the region as threats from Iran and Iran-backed Houthi militants in Yemen increase. The Houthis have repeatedly targeted Riyadh airport, which reopened for commercial flights on Sunday.

Asian stocks appeared set for a mixed start, with gains in US futures providing support while recent weakness in technology shares weighed on sentiment. A gauge of chipmakers posted its longest run of weekly losses last week since November, raising questions about the durability of the rebound in the artificial intelligence trade. The dollar remained broadly steady against its Group-of-10 peers after ending the previous week lower, with the Bloomberg Dollar Spot Index showing little change. The euro was quoted at $1.1210, the Japanese yen at 156.99 per dollar, the offshore yuan at 6.6693 per dollar, and the Australian dollar at $0.7038.

Investors are approaching a period where renewed geopolitical tensions, persistent inflation, and instability in the AI sector will test risk appetite. Central bank decisions in the US, euro zone, and Japan this week will provide the next major test, as policymakers balance the threat of higher energy costs against signs of strain in financial markets. Michael Hartnett, strategist at Bank of America Corp., noted in a client letter that the bank is staying tactically risk-off until mid-November, expecting a trade characterized by lower yields, lower stocks, and a weaker US dollar.

The Federal Reserve raised rates in September for the first time since 2023 and signaled that another increase was likely this year. While price pressures remain high, officials see no need for immediate action this week; market participants generally anticipate a further hike in December.

Geopolitical risks are expected to remain elevated heading into next month. Trump has suggested that US strikes on Iran could resume after the Nov. 3 midterm elections, while officials have warned that the period between the vote and the new Congress taking office could be particularly dangerous. Aslı Aydıntaşbaş, an expert on the Middle East at the Brookings Institution, said all indications point to a resumption of war and a major bombing campaign, although the timing remains uncertain.

In corporate news, people familiar with the matter said Netflix Inc. users are watching the streaming service less than they once did, indicating engagement issues for the world's most valuable entertainment company. Volkswagen AG plans to build a new $4 billion factory for its premium Audi brand in Georgia, aiming for potential relief from tariffs that have eroded profits. Suzhou Dongshan Precision Manufacturing Co., a printed circuit board maker, raised approximately HK$9.9 billion ($1.3 billion) in Hong Kong's biggest listing in nearly two months.

In other market moves, Australia's 10-year yield advanced five basis points to 5.21%, while Bitcoin was little changed at $80,436.29 and Ether fell 0.2% to $2,340.86.