By Peter Nurse
Investing.com -- U.S. stocks are seen opening lower Monday, handing back some of the month's strong gains as investors await a crucial policy-setting meeting by the Federal Reserve.
At 07:00 ET (11:00 GMT), the Dow Futures contract was down 160 points or 0.5%, S&P 500 Futures traded 22 points or 0.6% lower, and Nasdaq 100 Futures dropped 80 points or 0.7%.
Yet, despite these expected losses, the main U.S. equity indices are all on course to post a positive October, snapping a two-month losing streak. The blue-chip Dow Jones Industrial Average is leading the way, currently up over 14% this month, which would be its best month since 1976.
These gains have come despite earnings disappointments from a number of the tech giants, on raised hopes that the Federal Reserve will flag a slower pace of interest rate hikes after the conclusion of its two-day meeting on Wednesday.
The Fed is widely expected to raise interest rates by 75 basis points for a fourth straight time, and investors will be studying Fed Chairman Jerome Powell's comments carefully for any clues over future hikes.
The U.S. central bank could increase interest rates to as high as 5% by March 2023, Goldman Sachs said Sunday, 25 basis points above its earlier prediction, from the current range of 3%-3.25%, if it does not see "real changes in behaviour."
The quarterly earnings season continues, with more than 150 S&P 500 companies due to report quarterly results in the coming week, including Eli Lilly (NYSE:LLY), Pfizer (NYSE:PFE), Uber (NYSE:UBER), ConocoPhillips (NYSE:COP), Advanced Micro Devices (NASDAQ:AMD), and Qualcomm (NASDAQ:QCOM).
The economic data slate is largely empty Monday, and the week's main release will be Friday's U.S. nonfarm payrolls report for October, which will be key in helping investors set expectations ahead of the central bank's December meeting.
Analysts are expecting the Labor Department to report that the U.S. economy added 200,000 jobs last month, compared with 263,000 in September, while annual growth in average hourly earnings is also expected to moderate.
Oil prices fell Monday after the weak business activity data in China added to concerns that a resurgence in local COVID-19 cases will continue to hit demand from the world's largest crude importer.
China's crude oil imports for the first three quarters of the year fell 4.3% from the same period a year earlier - the first annual decline for this period since at least 2014 - as strict COVID curbs weighed on economic activity.
By 07:00 ET, U.S. crude futures traded 1.5% lower at $86.59 a barrel, while the Brent contract fell 1.4% to $92.50.
Additionally, gold futures fell 0.1% to $1,642.90/oz, while EUR/USD traded 0.3% lower at 0.9934.