Oil eases after Friday's surge as markets brace for Fed and Big Tech week

• US (Friday's close): the Dow fell 1.23% to 52,215.16, the S&P 500 lost 0.52% to 7,623.68 and the Nasdaq slipped 0.21% to 25,955.34. Futures are the only live read on the American day: S&P 500 futures are up 0.15% and Nasdaq 100 futures are flat.
• Europe (Friday's close): the FTSE 100 ended 0.32% lower at 10,690.36, the DAX lost 0.75% and the Euro Stoxx 50 lost 0.31%.
• Asia (today): the Nikkei closed 0.8% lower at 62,189.65 and the Kospi fell 1.46% to 5,469.47. In late trade the Hang Seng is up 0.49% and the Shanghai Composite is up 0.19%.

Oil is still the story. On Friday, fear of renewed fighting between the US and Iran drove Brent sharply higher. That lifted the US 10-year Treasury yield 3.5 basis points to 4.988% and hit any business exposed to fuel costs or consumer spending. The link is simple: dearer oil feeds inflation, and higher inflation raises the risk of more tightening from a Fed that put rates up at its last meeting. Higher yields in turn reduce what investors will pay today for future profits. The Dow took the brunt. American Express fell after announcing its first major job cuts in roughly a decade, and Caterpillar also fell. The Nasdaq held up better because chip stocks steadied after Thursday's rout and cybersecurity names rallied after a widely exploited software flaw; CrowdStrike gained 8.25%.

This morning that pressure has eased. Brent is trading at $110.25 and WTI at $101.43 as traders take profits after the previous week's run. That is despite the Houthis claiming weekend attacks on Saudi oil facilities, with Saudi Arabia saying it intercepted further missiles and drones on Sunday.

In Asia, the Kospi's drop extends a slump that has taken it 20.6% lower over the past month. We found no single trigger for today's move. The small gains in Hong Kong and Shanghai had no clear catalyst either.

Risk appetite is wary rather than panicked. The VIX is at 19.65, up 13.5% over five days. Bond-market volatility calmed on Friday, with the MOVE index down 3.3% to 103.3. Friday's US session was narrow. On PrimerIQ's count, decliners beat advancers 3,588 to 2,367, and the energy sector fund rose 2.6% while consumer staples fell 1.92%: oil producers gained at the expense of everyone who buys oil. Asian breadth on Friday was firmer, at 1.51 advancers per decliner on our measure. Demand for safe havens is muted: gold is up 0.27% at $4,018.80 and the dollar index is flat at 101.76, though sterling has slipped 0.3% to $1.3364.

We found no major UK release scheduled for 07:00 this morning. The first test is Germany's Ifo business climate survey at 09:30 GMT (10:30 CET), which will show whether expensive energy is weighing on German companies; the last confirmed reading, for August, was 88.8. Today's US calendar is light. The week's weight comes later: US durable goods orders and consumer confidence on Tuesday, and the Fed decision on Wednesday at 18:00 GMT (2pm ET), with Chair Kevin Warsh's press conference half an hour later. Third-quarter GDP and September PCE inflation follow on Thursday, with annual PCE inflation expected at 3.7%. Markets expect the Fed to hold this week but lean towards another rise in December. The ECB and the Bank of Japan also decide later in the week.

No material results have landed yet this morning. The US reporting day starts before the Wall Street open, and the week's centrepiece is Big Tech's results from Wednesday evening, where investors want proof that heavy AI spending is paying off.