Futures firm on chips and cheaper oil as Brazil's rout and Fed week loom

• US (closed Monday): The S&P 500 ended 0.70% higher at 7,676.77, the Nasdaq Composite rose 0.82% to 26,169.38 and the Dow added 0.28% to 52,361.58. The S&P is still 2.14% below its 52-week high. Futures are the only live read on today: S&P 500 futures are up 0.33% and Nasdaq 100 futures up 0.51%.
• Brazil (closed Monday): The Bovespa finished 13.88% lower at 176,608.
• Europe (mid-session): London is the odd one out, with the FTSE 100 down 0.84% at 10,676.69. The DAX is up 0.34%, the CAC 40 0.42% and the Euro Stoxx 50 0.38%.
• Asia (closed): Chip-heavy markets gained, with the Kospi up 3.09% and the Nikkei up 1.73%. China fell: the Shanghai Composite lost 1.33% and the Hang Seng 0.73%.

Brazil delivered the biggest shock. President Lula won Sunday's runoff, which reversed a rally built on bets that a Bolsonaro government would bring spending discipline. The Bovespa tripped a 30-minute circuit breaker and closed with what Reuters called its largest one-day fall since 1998. The real slumped and the Treasury cancelled this week's bond auctions. US-listed Brazilian banks and fintechs were crushed, yet the S&P 500 still rose. For now the damage has stayed inside Brazilian assets rather than spreading into a wider sell-off of risky assets.

AI is driving the US tape. Anthropic's IPO prospectus revived appetite for chipmakers and other AI beneficiaries after a rough few weeks. Nvidia's commitment to Meta's giant equity raise added to that, and the move carried into Korean chip stocks overnight.

Oil gives the setup a second support. Brent is down 4.72% at $110.34 on hopes for the Iran talks in Tehran. Houthi attacks on Saudi Arabia are keeping a floor under prices, and WTI is off only 0.5% at $101.25. The news does not cleanly explain why Brent has fallen so much more. Cheaper oil matters because hot inflation revived talk of more Fed hikes. The Fed is widely expected to hold on Wednesday after last month's hike. London is lagging for reasons specific to the UK: HSBC missed on revenue as its wealth business slowed, Reckitt cut its growth outlook, and caution is building before Wednesday's Budget.

Headline volatility measures look calm. The VIX is down 0.63 points at 17.76, and the MOVE index of bond-market volatility ended Monday 1.08% lower at 102.19. Underneath, the rally is thin. Monday's 0.70% gain in the S&P came with flat breadth in PrimerIQ's US universe, at 2,982 advancers against 2,998 decliners. Sector dispersion was wide, with technology (XLK) up 1.69% and communication services (XLC) down 1.57%. Asian breadth was poor, with 3,534 risers against 7,073 fallers in our universe. Safe havens are giving mixed signals. Gold is flat at $4,033.80, but the dollar index is up 0.2% at 102.17, within 0.76% of its 52-week high. Copper is up 1.52%, which points to some confidence about growth.

The 08:30 ET durable goods report for September showed orders up 1.8%, mostly because of transport equipment. Excluding transport, orders rose a more modest 0.5%. The figure was roughly in line with the higher forecasts and barely moved Treasuries. The 10-year yield is up 0.2bp at 4.988% and the 5-year up 0.9bp at 4.833%.

Still to come today: August's FHFA and Case-Shiller house price data at 09:00 ET. At 10:00 ET come October's Conference Board consumer confidence (forecast about 80.5, against 81.9 in September), the Richmond Fed manufacturing index (previous reading -2) and September new home sales. Further out this week, the Fed decides on Wednesday, as does the UK Budget, the ECB follows on Thursday and the Bank of Japan on Friday.

Coca-Cola beat with EPS of $0.91 against $0.87 expected and raised its annual profit forecast, though North American demand slowed and the shares are only slightly firmer. Boeing's adjusted loss of $0.34 a share was wider than the expected $0.21, but better cash flow left the shares marginally higher, with 737 output still stuck short of target. Royal Caribbean ($6.57 against $6.38) is higher after its beat, while in London HSBC's revenue miss is weighing on banks across the market.