Stock Futures, Treasurys Steady as Brazilian Assets Slide — Update

By Joe StonorU.S. stock futures and Treasurys were largely steady Monday as Brazilian assets sold off sharply following the surprise election victory of leftist incumbent Luiz Inacio Lula da Silva.Futures for the Dow Jones Industrial Average and the S&P 500 rose 0.4% and 0.3%, respectively. Yields on 10-year and 30-year Treasurys were little moved ahead of the Federal Reserve's rate decision Wednesday, with 10-year yields holding below 5%.Investor attention turned to sharp falls in Brazil-linked assets following President Lula's unexpected second-round victory over Flavio Bolsonaro. Front-month Brazilian real futures contracts weakened by around 12% against the dollar. In equity markets, a gauge of Brazilian stocks represented by the iShares MSCI Brazil ETF was on track for its most severe one-day fall since at least 2000, falling over 27% in premarket trade. European companies with significant activities in Brazil dropped sharply, with Spanish bank Santander down over 5%."Instead of fiscal consolidation under Bolsonaro, Brazilian assets are...going to have to contend with Lula's campaign pledges, including a shorter working week," said ING economist Chris Turner.Nasdaq futures rose 0.5% after Anthropic filed for its initial public offering, confirming the frontier model maker will go ahead with its blockbuster public listing.Meta Platforms stock was volatile in premarket trade after the Facebook owner said it would raise up to $95 billion through stock offerings to fund its AI build-out. Cloud-computing stocks continued to weaken premarket, however. In an X post Sunday, SpaceX owner Elon Musk said lenders were turning away from cloud-computing companies, and that company consolidation in the sector is inevitable. CoreWeave shares fell 5.7% premarket, extending a recent rout. Earnings reports from hyperscalers this week will help shape the AI narrative. Alphabet and Microsoft report earnings Wednesday, before Amazon and chipmaker Intel on Thursday.Asian indexes were mixed Monday, as investors responded to Friday's surge in oil prices and AI names remained under pressure. China's Shanghai Composite Index recovered early losses to close 0.2% higher, though tech-heavy indexes in South Korea and Japan both fell back. European stocks broadly gained, with the continent-wide Stoxx 600 rising 0.5%.Oil prices remained elevated despite pulling back in early trade Monday. Brent crude contracts for December delivery fell 1.4% to trade at around $115 a barrel, while West Texas Intermediate December contracts fell 2% but held above $101 a barrel. President Trump told Fox News on Sunday that it is nearing decision time on whether he will make a deal with Tehran or "finish it off."The dollar was flat against a basket of global currencies, while bitcoin slipped 0.4% to hover above $80,000. Gold futures held above $4,000 a troy ounce.For the day ahead, data prints include the Dallas Fed's manufacturing activity report for October, and the Chicago Fed's national activity index for September.Write to Joe Stonor at [email protected]