“Markets Rally on U.S.-EU Tariff Deal: Big Tech Earnings and Fed Policy in Focus”

U.S. stock futures climbed Monday morning, signaling a strong start to a week packed with major earnings, a key Federal Reserve policy meeting, and new trade developments.

Dow, S&P 500, Nasdaq Futures Edge Higher

• Dow Jones Industrial Average futures gained 117 points (+0.26%).

• S&P 500 futures rose 0.32%.

• Nasdaq 100 futures led the way, up 0.5%.

The positive momentum comes after President Donald Trump announced a landmark U.S.-EU trade deal, cutting tariffs to 15% from the previously threatened 30%. The move has eased fears of an escalating trade war with the nation’s largest trading partner.

Wall Street Coming Off Strong Week

Last week ended on a high note as all three major indexes posted gains:

• Dow Jones: +208 points (+0.47%) to 44,901.92

• S&P 500: +0.40% to a record close of 6,388.64 (5th straight record)

• Nasdaq Composite: +0.24% to 21,108.32 (15th record close this year)

Market Drivers Last Week

According to Nick Savone of Morgan Stanley, the rally was fueled by:

• Strong corporate earnings

• Progress in U.S.-Japan trade relations

• Robust capital expenditure (CapEx) outlooks

• Optimism over an ambitious AI Action Plan

Savone added that investors remain focused on forward guidance as markets anticipate the effect of global trade negotiations.

Tech Earnings in Focus: Meta, Microsoft, Amazon, Apple

This week marks the peak of earnings season, with more than 150 S&P 500 companies set to report. Key highlights:

• Meta Platforms & Microsoft: Results expected Wednesday

• Amazon & Apple: Earnings due Thursday

Investors will closely watch commentary on artificial intelligence (AI) investments, especially in hyperscale data centers, to gauge whether 2025’s massive AI-driven spending surge is sustainable.

Federal Reserve Meeting This Week

The Federal Reserve begins its two-day meeting Tuesday, concluding Wednesday. Rates are expected to remain steady at 4.25%–4.5%, but analysts will watch for any signals of a possible September rate cut.

Inflation Data in Spotlight

On Thursday, the Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, will be released. Forecasts (FactSet):

• Year-over-year: 2.4% (up from 2.3%)

• Monthly: 0.31% (up from 0.14%)

Jobs Data to Test Market Sentiment

Key U.S. employment reports scheduled this week include:

• JOLTS Report (Tuesday)

• ADP Private Payrolls (Wednesday)

• Initial Jobless Claims (Thursday)

• July Jobs Report (Friday)

Economists expect 115,000 jobs added in July, down from June’s 147,000. The unemployment rate is projected to rise slightly to 4.2% from 4.1%.

Asia-Pacific Markets Close Mixed

Asian markets delivered a mixed performance Monday:

• Hang Seng (Hong Kong): +0.68% to 25,562.13

• CSI 300 (China): +0.21% to 4,135.82

• Kospi (South Korea): +0.42% to 3,209.52

• Kosdaq: –0.32% to 804.40

• ASX 200 (Australia): +0.36% to 8,697.70

• Nifty 50 (India): –0.67%

• BSE Sensex (India): –0.64%

Samsung Stock Hits 10-Month High on Tesla Deal

Shares of Samsung Electronics surged more than 6% to 69,900 KRW, the highest level since September 5, 2024.

The jump followed confirmation of a $16.5 billion semiconductor supply deal with Tesla, as announced by Elon Musk on X.