Market Optimism Amid Anticipated Fed Rate Cut and Nvidia Earnings

U.S. stock futures rose slightly on Monday as investors anticipated positive results from Nvidia and awaited a key inflation report. Optimism grew over a potential September rate cut by the Federal Reserve, influenced by Chair Jerome Powell's comments on lowering borrowing costs. Key economic indicators and corporate earnings results will shape investor sentiment this week.

U.S. stock index futures edged higher on Monday, buoyed by investor anticipation of Nvidia's earnings and an upcoming key inflation report. The market remains optimistic about a September rate cut from the Federal Reserve.

Federal Reserve Chair Jerome Powell's Friday comments spurred optimism. He signaled that it might be time to lower borrowing costs, considering the decline in inflation risks and moderating labor demand. Major stock indexes, including the S&P 500 and Dow, saw gains of over 1% in the previous session and are approaching record highs. Small-cap stocks, which are sensitive to interest rates, had their best day in six weeks.

Traders are now closely watching employment data to gauge the size of the expected rate cut, with predictions shifting towards either a 25-basis-point or a 50-basis-point cut. Meanwhile, upcoming second-quarter GDP estimates and July's Personal Consumption Expenditure data will also be significant for market direction. Nvidia's premarket trading showed a nearly 1% rise ahead of its earnings report on Wednesday.

(With inputs from agencies.)