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U.S. equity futures were higher on Monday, buoyed by a U.S.–EU trade deal, as investors braced for a crucial week filled with major earnings, economic data, and central bank decisions.
Market Movement
- Dow Jones Futures: +90 points (+0.2%)
- S&P 500 Futures: +20 points (+0.3%)
- Nasdaq 100 Futures: +120 points (+0.5%)
Both the S&P 500 and NASDAQ Composite recorded all-time highs on Friday, marking a continuation of strong gains for Wall Street. Positive quarterly earnings, along with the easing of trade-related uncertainties, have fueled recent stock market strength.
Trade Deal Between U.S. and EU
The U.S. and European Union reached a landmark trade agreement over the weekend, which includes a 15% tariff on EU goods entering the U.S., significantly lower than previously proposed.
Key elements of the deal include:
- The EU committing to purchase $750 billion worth of U.S. energy.
- The EU also agreeing to make $600 billion in investments in the U.S. economy.
This deal has alleviated market jitters that grew over fears of a potential deadlock ahead of President Trump’s tariff deadline of August 1.
However, analysts at ING caution that the agreement has yet to be formalized and that further clarity will be required in the coming days.
Federal Reserve Meeting and Economic Data
This week, attention will turn to the Federal Reserve’s two-day policy meeting starting Tuesday, concluding on July 30. While the Fed is expected to keep rates steady at 4.25%–4.5%, investors are closely watching for hints about a potential rate cut in September.
In addition to the Fed’s meeting, the Bank of Japan will also hold a key meeting on Thursday, and the Personal Consumption Expenditures (PCE) inflation index for June, the Fed’s preferred gauge, will be released.
Labor market data will be closely monitored, including:
- JOLTS on Tuesday
- ADP private payrolls on Wednesday
- Jobless claims on Thursday
- The July jobs report on Friday
Earnings Season and the “Magnificent Seven”
The earnings season continues, with over 150 S&P 500 companies set to report their quarterly results this week. Notable companies include members of the “Magnificent Seven” such as:
- Meta Platforms (Wednesday)
- Microsoft (Wednesday)
- Apple (Thursday)
- Amazon (Thursday)
Investors will be keen to hear about AI spending and how much these companies have invested in hyperscalers this year, providing insights into future market directions.
Oil Prices Gain on Trade Deal Optimism
Oil prices rose on Monday, supported by the U.S.–EU trade deal, which alleviated concerns about a damaging trade war.
- Brent Futures: +0.8% to $68.18 per barrel
- WTI Futures: +0.8% to $65.71 per barrel
The trade deal optimism helped boost sentiment in the crude market, with potential additional trade deals between the U.S. and its partners expected to support global economic growth and oil demand.
With key tariff deadlines approaching, the market remains cautious but optimistic about the global economic recovery and the oil demand outlook.
As investors await central bank decisions and economic data, the coming week is likely to set the stage for further market movements across sectors.
