US equity futures are climbing on Monday as oil prices slide and officials signal optimism ahead of the summit between US President Donald Trump and China’s Xi Jinping this week. Contracts on the S&P 500 Index increased by 0.7% as of 7:46 a.m. in New York, while Nasdaq 100 futures climbed 1.1%. This positive market movement is partly attributed to leading gains from Warner Bros. Discovery Inc. and Paramount Skydance Corp. due to settlement talks with California officials regarding their deal.
The decline in oil prices is contributing to the overall market optimism. Brent crude fell 2.53% to $96.78 a barrel, and US crude dropped 3.10% to $93.10 a barrel. This decrease in oil prices is seen as a factor that could soften the inflation impulse, which had previously driven a Federal Reserve rate increase. The US 10-year Treasury yield, which ended Friday at 4.998%, remains a key valuation pressure point, but the overall market sentiment is improving due to cheaper oil and constructive US-China talks.
Optimism surrounding the Trump-Xi meeting is also a significant driver. Treasury Secretary Scott Bessent described Sunday’s US-China engagement as "very successful." China’s Foreign Ministry confirmed that Xi Jinping will visit the US from September 23 to 25. Topics expected to be discussed at the summit include trade, artificial intelligence, and geopolitics, which are seen as potential avenues for improving market risk appetite. European markets also joined the rebound, with the STOXX Europe 600 up 1.08%, FTSE 100 up 0.92%, and DAX up 1.12%.
