US futures rise with Fed in focus, Alphabet climbs: Markets wrap

US stock futures rose as tech stocks climbed and investors awaited trading cues in a busy week with policy decisions due from the Federal Reserve and Japan.

Contracts on the S&P 500 and the Nasdaq 100 advanced after Bloomberg reported that Apple is in talks to build Google’s Gemini artificial intelligence engine into the iPhone. Google parent company Alphabet rallied almost 4% in premarket trading, while chipmaker Nvidia and Tesla added more than 2%. European stocks were little changed.

Bets are mounting that the Bank of Japan will end its negative-rate policy at its meeting Tuesday, while a policy decision and inflation data from the UK are due later in the week. The main focus comes Wednesday, when Fed policy makers gather for a meeting that has the potential to set the tone for global stocks for the next quarter.

While Fed Chairman Jerome Powell indicated the central bank was close to having the confidence to cut, bond traders appear to have painfully surrendered to a higher-for-longer reality. The 10-year Treasury yield held near a three-week high on Monday, having risen more than 20 basis points last week. A gauge of the dollar was steady.

“The recent market repricing has put policy expectations essentially at Fed estimates,” said Anthi Tsouvali, multi asset strategist at State Street Global Markets. The decision will likely provide “another signal that easing of economic conditions is coming, pushing equity markets higher,” Tsouvali said.

Priced in

In Japan, the Nikkei 225 index climbed the most in a month and the yen traded weaker against the dollar, amid signs markets have priced in the potential for an interest-rate increase.

“Japanese stocks are rising, driven by weakness of the yen, and expectations that the currency won’t strengthen even if the central bank hikes,” said Charu Chanana, a strategist at Saxo Capital Markets based in Singapore.

Elsewhere this week, the Reserve Bank of Australia is set to extend its rate pause while Bank Indonesia and the Bank of England also deliver policy decisions. Eurozone inflation data is due as well as Reddit Inc.’s initial public offering.

In commodities, oil hit a fresh four-month high — building on the biggest weekly advance in a month — as macro-economic data from China came in ahead of expectations, and Ukrainian attacks on Russian refineries heightened geopolitical risks.

Key events this week: