U.S. stock futures rose early Monday after President Donald Trump announced a new U.S.-EU trade deal with the European Union, kicking off a high-stakes week filled with major corporate earnings, a Federal Reserve policy meeting, key inflation data, and jobs reports. Dow Jones Industrial Average futures gained 171 points (0.38%), S&P 500 futures rose by 0.41%, and Nasdaq 100 futures climbed 0.55%.
Trump stated Sunday that the U.S.-EU trade deal to lower tariffs to 15% on most goods including European cars averting his prior threat of 30% tariffs. The agreement also includes commitments by the EU to purchase $750 billion in U.S. energy and boost investments by $600 billion beyond current levels.
This announcement adds to recent market momentum fueled by favorable U.S. trade developments with partners like Japan and Indonesia. All three major indices posted gains last week. The Dow rose 208.01 points (0.47%) to close at 44,901.92, the S&P 500 recorded its fifth straight record close at 6,388.64, and the Nasdaq notched its 15th record close of the year at 21,108.32.
Investors Eye Corporate Earnings and Fed Signals
Markets now turn their attention to what’s expected to be the busiest week of earnings season. More than 150 S&P 500 companies are set to release results, including top tech players Meta Platforms and Microsoft on Wednesday, followed by Amazon and Apple on Thursday. Analysts say investor sentiment is closely tied to forward guidance, particularly regarding AI investments and cloud infrastructure spending.
Nick Savone of Morgan Stanley noted that a mix of strong earnings, improving U.S.-EU trade deal relations, and optimism around AI strategies has kept markets buoyant. “The lower bar heading into this season has admittedly kept spirits high,” he said, “but stock reactions still look most principally rooted in forward guidance especially as investors brace, time and again, for the impact of these trade headlines to flow through.”
Focus Shifts to Fed Meeting, Inflation, and Jobs Data
The Federal Reserve’s two-day policy meeting concludes Wednesday, with markets widely expecting no change to the current interest rate range of 4.25% to 4.5%. However, investors will be paying close attention to any signals about a potential rate cut in September.
Meanwhile, the release of the June Personal Consumption Expenditures (PCE) index on Thursday will provide insights into inflation trends. Forecasts from FactSet suggest annual inflation may rise to 2.4%, up from 2.3%, with a monthly increase of 0.31%. Tariffs’ impact on inflation will remain under scrutiny as the new U.S.-EU trade deal takes effect.
Additionally, the labor market will be in focus. Key reports this week include Tuesday’s JOLTS data, Wednesday’s ADP private payrolls, Thursday’s initial jobless claims, and Friday’s crucial July jobs report. Economists expect 115,000 jobs added in July, down from 147,000 in June, with a slight increase in unemployment to 4.2%.
As trade deals, earnings, and economic indicators collide, markets remain on edge but optimistic.
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