U.S. stock index futures gained ground on Monday, as investors were optimistic ahead of an anticipated Federal Reserve interest rate cut later in the week, as well as key data prints that will help set the tone for policy next year.
The Fed's final rate decision of the year is due on Wednesday, with traders pricing in an over 97% chance of a 25 basis point rate reduction, as per CME's FedWatch.
However, the primary focus will be on policymakers' outlook for next year, with an updated "dot plot" of forecasts also to be released, as bets moderate on the pace of rate cuts amid strong economic growth and persistent inflation.
"The main focus will be on the Fed, which is generally expected to cut by 25 basis points, but we believe that the Fed will lower expectations of rate cuts further ahead," said analysts at SEB.
A heavy data docket also awaits investors over the week. S&P Global's December flash manufacturing and services PMIs are due at 9:45 a.m. ET on the day, with industrial production figures, retail sales, and personal consumption expenditure data also scheduled throughout the week.
At 7:05 a.m. ET, Dow E-minis were up 52 points, or 0.12%, S&P 500 E-minis were up 11 points, or 0.18% and Nasdaq 100 E-minis were up 65.75 points, or 0.30%.
The benchmark S&P 500 (.SPX) and the blue-chip Dow (.DJI) ended the previous week lower, while the tech-heavy Nasdaq (.IXIC) had clocked its fourth straight week of gains after breaching the 20,000 mark for the first time.
Stocks have had a bumper run this year, as gains in shares related to artificial intelligence, the start of the Federal Reserve's rate cutting cycle and expected pro-business policies from Donald Trump's incoming presidential administration have lifted equities.
Shares of MicroStrategy (MSTR.O) rose 3.5% in premarket trading as the software company and bitcoin buyer was set to join the tech-heavy Nasdaq 100 index.
Palantir (PLTR.O) and Axon Enterprise (AXON.O) gained 0.4% and 2.3%, respectively, with the stocks also to be added to the reconstituted index. The changes will take effect on Dec. 23.
Super Micro Computer (SMCI.O), among those set to be removed from the index, dropped 13.5%.
Crypotocurrency stocks rose as bitcoin briefly jumped above $106,000 after Trump suggested he plans to create a U.S. bitcoin strategic reserve similar to its strategic oil reserve.
Coinbase Global (COIN.O) rose 1.8% and bitcoin miner MARA Holdings (MARA.O) gained 2.3%.
Honeywell International (HON.O) gained 3% after the industrial conglomerate said it was exploring a separation of its aerospace business.
