Stock futures jump ahead of a monster week after a $5 trillion AI rout

Stock futures experienced a positive start on Sunday evening as Wall Street braces for a significant week, featuring key earnings reports from Apple, the upcoming midterm elections, and fluctuating oil prices that could reach $100 per barrel.

Futures for the S&P 500, Nasdaq 100, and Dow Jones all registered gains, with the Nasdaq, heavily influenced by technology, showing the strongest performance following last week's significant selloff in the artificial intelligence sector.

The downturn that concluded October was harsh yet limited in scope. Major companies in the AI and semiconductor fields have collectively lost approximately $5 trillion in market capitalization since October 6, according to estimates from Yahoo Finance. In contrast, the remaining 625 large-cap stocks in that same timeframe have gained about $1.3 trillion in value.

Last week underscored this trend. The S&P 500 index saw a decline of around 0.6%, but notably, nine out of its eleven sectors posted increases of 1% or more. Notably, no prior week of decline for the index has recorded more than seven sectors rising since at least 1999, as per Yahoo Finance's calculations.

Looking ahead, opinions diverge on the potential trajectory of the market. Some analysts suggest that the current tech downturn could worsen before it stabilizes. Conversely, historical data indicates that the stock market often enters a favorable period following midterm elections, particularly from late October to the following June. Since 1950, the S&P 500 has seen gains during this stretch every time. Both scenarios might coexist, as the recent selloff demonstrated that other market sectors can thrive even while technology stocks struggle.

A significant focus this week will be on Apple, which is set to report its earnings after the market closes on Monday. Investors will be particularly interested in the sales figures for the iPhone 18, as Apple remains the world's most valuable company, closing on Friday with a market valuation of approximately $5.03 trillion. This positions it ahead of Nvidia, which is valued at around $4.93 trillion. Notably, Apple is the only stock among the so-called "Magnificent Seven" that has outperformed the S&P 500 this year, with a gain of about 27% compared to the index's 11% increase. Palantir is also scheduled to release its earnings on Monday.

In the oil market, West Texas Intermediate crude opened lower on Sunday after closing above $104 a barrel on Friday, marking its highest price since mid-September. The geopolitical situation remains tense, particularly with the Strait of Hormuz largely closed due to ongoing conflicts related to Iran, while OPEC+ has decided to maintain its production targets for December.

Additionally, voters will head to the polls on Tuesday for the midterm elections, and the October jobs report is set to be released on Friday. This has sparked discussions on Wall Street regarding the potential for renewed support from the Federal Reserve in light of economic conditions. The upcoming week promises to be pivotal for both investors and the broader market.

This article was produced with the assistance of internal AI tools that helped analyze data, conduct research, and draft content. All information was reviewed, edited, and fact-checked by human editors before publication.

Jared Blikre serves as the global markets and data editor for Yahoo Finance. You can follow him on X at @SPYJared or reach him via email at jaredblikre@yahooinc.com.