US stock futures nudged higher on Monday, gearing up for a week of potentially huge market-moving events — the presidential election and the Federal Reserve policy decision.

S&P 500 futures (ES=F) rose roughly 0.2% after staging a comeback to end a losing week. Contracts on the tech-heavy Nasdaq 100 (NQ=F) nudged up 0.1%, while Dow Jones Industrial Average futures (YM=F) hovered above the flat line.

A so-far solid earnings season and interest rate-cut optimism are giving the market reasons to be cheerful ahead of Tuesday's election, a big risk event for markets. The new president — whether Kamala Harris or Donald Trump — will set the course for the economy in the years that follow. The neck-and-neck race has investors bracing for volatility on Election Day itself.

Read more: The Yahoo Finance guide to the presidential election and what it means for your wallet

But with just one session to go, weekend polls showed Harris with a shock lead in Iowa and gaining ground elsewhere — a sign the Democrat has a better chance of winning than Wall Street had calculated. The dollar dropped by the most in a month as traders unwound bets on a Trump victory. Treasury yields also retreated, with the 10-year benchmark yield (^TNX) sliding almost 10 basis points to 4.30%.

Also looming large is the Fed's two-day policy meeting, kicking off a day later than usual on Wednesday in light of the election.

Wall Street is convinced that Chair Jerome Powell will usher in a 0.25% rate cut on Thursday, despite signs of stubborn inflation and muddied job market signals. Given that, the focus is on what the action the Fed might take at future meetings, with the market now seeing three fewer cuts through the end of 2025 than it previously expected.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

At the same time, earnings continue to roll in, with beleaguered AI server maker Super Micro Computer (SMCI), Arm (ARM), and Qualcomm (QCOM) among those lined up to report this week. With 70% of the S&P 500 having reported quarterly results, the benchmark index is on pace for its fifth quarter of earnings growth in a row as it rebounds from the 2023 earnings recession.

In other markets, oil prices jumped 3% after OPEC+ decided to delay a planned hike in output by at least a month, and Iran escalated Mideast tensions by warning of a "crushing response" to Israel's strikes.