Key facts
- US stocks were set for a higher open as oil prices pulled back.
- Coca-Cola and PayPal raised their annual profit forecasts.
- The Federal Reserve is expected to hold interest rates steady this week.
- Markets are pricing in at least two more Fed rate hikes by mid-2027.
- Brent crude slipped for the second straight session but remained near recent highs.
Wall Street indexes were on track to open higher on Tuesday as easing oil prices supported risk appetite ahead of key corporate earnings and the Federal Reserve's interest-rate decision this week. The Fed is widely expected to hold rates steady on Wednesday, though markets are pricing in at least two more hikes by mid-2027 as key inflation indicators remain elevated amid the ongoing US-Iran conflict. Brent crude slipped for the second straight session in volatile trading, though it still held near its highest level since late April. Coca-Cola shares inched up 0.1% in premarket trading after the beverage giant raised its annual profit forecast. PayPal gained 1.4% after the payments company also lifted its annual adjusted profit view. Hyperscalers Alphabet, Microsoft and Amazon.com are expected to report earnings later this week. Their results will be parsed for signs of whether the hefty AI investments are translating into growth. Jefferies equity strategist Jane Gibbons said in a note that growth for 'Magnificent 7' names could trail the rest of the S&P 500. The brokerage sees earnings for the group of the biggest US tech stocks growing at 21% versus 32% for the rest for the benchmark. Tesla shares climbed over 1%, building on their more than 5% gain from the previous session. Meta inched 0.4% lower after the company increased its largest-ever equity fundraising to $97.5 billion to fund AI expansion. The effort has also drawn interest of up to $5 billion in total from Nvidia, Advanced Micro Devices and Broadcom. The plan comes as growing concerns over the viability of debt-funded spending in the face of rising borrowing costs have weighed on AI trade this month. Sentiment somewhat improved in the previous session after AI lab Anthropic revealed its IPO filing, taking a big step towards a potentially record-breaking listing even as it disclosed steep losses and security concerns. The development had helped lift chip stocks after a bruising few weeks, along with other AI beneficiaries such as photonic product makers and neoclouds. Royal Caribbean rose 6% after the cruise operator lifted its full-year profit forecast, while Whirlpool dropped 5.9% after the home appliance maker reported a third-quarter loss and missed revenue expectations. Investors are also looking ahead to the November 3 midterm elections, which will decide control of the US Congress.