U.S. index futures edged higher in pre-market trading on Monday, as investors aimed to reclaim record levels following the Federal Reserve’s signal of potential interest rate cuts. After a strong week marked by Jerome Powell’s comments, Wall Street eagerly anticipates rate cuts to ease recent economic concerns.

At 5:14 AM ET, Dow Jones futures (DOWI:DJI) rose 19 points or 0.05%. S&P 500 futures gained 0.14%, and Nasdaq-100 futures advanced 0.18%. The yield on the 10-year Treasury note stood at 3.791%.

The U.S. economic calendar includes the release of July durable goods orders at 8:30 AM ET, with a median forecast of a 4.0% increase, compared to a 6.7% decline the previous month. Additionally, durable goods orders excluding transportation will be released, with prior results at 0.5%. Furthermore, San Francisco Fed President Mary Daly is set to give an interview at 2:00 PM ET.

In commodities, oil prices rose amid concerns that conflicts in Gaza could escalate, impacting Middle Eastern oil supply.

Following a preemptive strike by Israel, where 100 planes destroyed Hezbollah missile launchers in southern Lebanon, the Middle East braced for potential regional escalation. Israel, claiming intel on Hezbollah’s plans to attack northern Israel, faced missile and drone retaliations, resulting in limited casualties and damage. The tensions disrupted ceasefire talks in Gaza and led to evacuations. The situation remains volatile, with the risk of Iranian involvement and implications for diplomatic negotiations.

The expectation of U.S. interest rate cuts also boosted economic outlooks and fuel demand, while tensions involving Hezbollah and Iran keep the oil market on edge.

West Texas Intermediate crude for October rose 1.18% to $75.71 per barrel, while Brent for October increased 1.11% to $79.90 per barrel.

Gold (PM:XAUUSD) stabilized near its record high after Fed Chairman Jerome Powell hinted at interest rate cuts. The precious metal, up more than 20% this year, benefits from the expectation of lower rates, enhancing its appeal relative to interest-bearing investments like Treasuries.

Asia-Pacific markets had mixed performances. Japan’s Nikkei 225 and Topix fell 0.66% and 0.87%, respectively. In South Korea, the Kospi dropped 0.14%, and the Kosdaq lost 0.84%. Australia’s S&P/ASX 200 rose 0.76%, nearing its all-time high. Mainland China’s CSI 300 slipped 0.09%, while Hong Kong’s Hang Seng advanced 1.11% near the close.

Singapore’s industrial production surged 10.1% in July, reversing the revised 4.3% drop in June and beating the 5.3% growth forecast. On an annual basis, it grew 1.8%, exceeding the 1.1% decline forecast.

Asian investors are preparing for potential U.S. monetary policy easing in September, following Federal Reserve Chairman Jerome Powell’s speech suggesting imminent rate cuts. This scenario has boosted the yen and weakened the dollar.

At the Federal Reserve’s annual conference in Jackson Hole, academics and policymakers discussed how central banks shape market perceptions of monetary policy.

The Bank of Japan, following an unexpected rate hike in July, emphasized the need to align communication and actions to maximize impact. However, the BOJ’s lack of clear guidelines caused market confusion, highlighting the importance of more structured communication regarding future rate decisions. The Fed’s moderate shift could relieve pressure on the Bank of Japan (BOJ) to strengthen the yen but may complicate interest rate hikes.

A typhoon with winds up to 200 km/h is expected to hit Kyushu in southern Japan between Tuesday and Wednesday. Kyushu Railway and Central Japan Railway warned of possible train service disruptions, including the Tokaido Shinkansen. Power and water outages are expected, and damages could exceed $10 billion.

In China, Vice President and Bank of China President Liu Jin resigned for personal reasons. The board approved Ge Haijiao as acting president. Liu, who assumed the presidency in April 2021, previously led China Everbright Bank and held positions at the China Development Bank. His departure follows the resignation of former president Liu Liange, who was investigated and convicted of corruption.

During U.S. National Security Advisor Jake Sullivan’s visit to China, Beijing will address issues concerning Taiwan, tariffs, and sanctions. China aims to express concerns about development and strategic security, while also discussing trade and security issues. Sullivan will seek to keep dialogue open despite tensions.

European markets are mostly down due to low trading volumes, influenced by the UK holiday. Technology and auto stocks are underperforming, while real estate and energy stocks are up.

ECB Chief Economist Philip Lane stated over the weekend that interest rates need to remain high to achieve the 2% inflation target. Investors await the eurozone inflation data due on Friday.

In Germany, the business climate index fell to 86.6 in August, slightly above the 86.0 forecast. Despite the smaller-than-expected decline, the Ifo survey indicates growing pessimism, with companies assessing their current situation as worse.

U.S. stocks saw a strong rebound on Friday, with the Dow Jones rising 1.14%, the S&P 500 advancing 1.15%, and the Nasdaq gaining 1.47%. Federal Reserve Chairman Jerome Powell indicated that rate cuts are imminent, boosting investor confidence. Powell emphasized that inflation is nearing the 2% target, justifying the cuts. The Dow posted a 1.3% weekly gain, while the Nasdaq and S&P 500 rose 1.4% and 1.5%, respectively.

Additionally, U.S. new home sales in July surged 10.6%, reaching 739,000 units, significantly exceeding expectations and signaling a hot housing market.

On the quarterly earnings front, PDD Holdings  (NASDAQ:PDD), Daqo New Energy  (NYSE:DQ), Viomi Technology Company  (NASDAQ:VIOT), will report before the market opens.

After the close, numbers are expected from Trip.com  (NASDAQ:TCOM), Heico Corp  (NYSE:HEI), Tuya Inc  (NYSE:TUYA), American Woodmark  (NASDAQ:AMWD), BHP Group  (NYSE:BHP), and more.