The central bank meets on Wednesday and markets imply around a one-in-three chance of a rate rise, though most analysts doubt Chair Kevin Warsh would be in favour of a move.
"Investors see the outcome of the July meeting as unusually uncertain, likely because the Fed has been split recently, Warsh's own position remains unclear, and some of the re-escalation with Iran occurred during the blackout period," noted analysts at Goldman Sachs.
"There will likely be at least one dissent in favour of a hike, but most voters appear unlikely to push for a move this week after the softer June inflation data."
The Bank of England holds its meeting on Thursday and the Bank of Japan on Friday, and both are expected to hold steady while remaining cautious about inflation risks ahead.
Equities took comfort in the drop in oil and yields, sending S&P 500 futures up 0.8%, while Nasdaq futures jumped 1.3%. In Europe, EUROSTOXX 50 futures and DAX futures both rose 0.6%, while FTSE futures added 0.1%.
Japan's Nikkei edged up 0.4%, while South Korea's chip-heavy index gained 0.6%. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3%.
About one-third of S&P 500 companies are due to report this week with earnings on track to boast a 26.5% increase on last year, according to LSEG IBES data.
With expectations so high and mounting unease over the vast cost of AI capex, even blockbuster results may not be enough to please investors on the day.
The massive sums involved were underlined by a WSJ report that Nvidia was in talks to provide a roughly $250 billion backstop for OpenAI as part of a data center project.
Companies reporting include Microsoft, Meta Platforms, Amazon, Apple and Qualcomm, along with a host of industrial, defence and healthcare stocks.
Data highlights include U.S. advance Q2 GDP where growth is seen picking up to an annualised 1.5% after a soft start to the year. The June PCE price index, personal income and consumption, weekly jobless claims, Q2 employment cost index and July Michigan consumer sentiment round out the diary.
The euro zone's schedule includes flash Q2 GDP, July economic sentiment, consumer confidence, flash inflation and June unemployment.
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