U.S. Stock Futures Surge as Trade Deal with EU Unfolds

U.S. equity futures climbed on Sunday evening, signaling a positive start to a pivotal week for the markets. This uptick follows President Donald Trump‘s announcement that the United States has reached a trade agreement with the European Union, which could alleviate previous tariff threats of up to 30% on imports from the EU. The Jones Industrial Average rose by 161 points, or 0.36%, while other major indices also saw gains.

The upcoming week is poised to be eventful, with earnings reports from major technology companies and important economic data releases on the horizon. Over 150 companies within the S&P 500 are set to announce their quarterly results, including several high-profile firms often referred to as the “Magnificent Seven.” Key reports are expected on Wednesday and Thursday, which will likely provide insights into industry trends, particularly in artificial intelligence (AI) investments.

Wall Street experienced a strong finish last week, buoyed by solid earnings and positive developments in trade relations. The three major U.S. stock averages concluded the week with notable gains. The blue-chip index advanced 208.01 points, settling at 44,901.92, while the broad market increased by 0.40% to close at 6,388.64. The tech-heavy index marked its 15th record close of the year, rising by 0.24% to reach 21,108.32.

Analyst Nick Savone of Morgan Stanley commented on the market’s momentum, stating, “A healthy plethora of earnings beats, positive developments in U.S.-Japan trade relations, strong capex commentary, and a bullish ‘AI Action Plan’ have kept enthusiasm strong.” He noted that while the lower expectations for earnings have lifted spirits, market reactions will largely depend on forward guidance as investors navigate the implications of ongoing trade discussions.

The Federal Reserve is also in focus this week, with its two-day policy meeting concluding on Wednesday. While the central bank is expected to maintain its current interest rate target range of 4.25% to 4.5%, market participants are eager for indications regarding potential rate cuts at the September meeting.

On Thursday, traders will closely monitor the release of the June personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation. According to FactSet, analysts anticipate inflation will rise to 2.4% year-over-year, up from 2.3%, and increase to 0.31% on a monthly basis, compared to 0.14% previously.

Additionally, a series of job-related reports will be released this week. The Job Openings and Labor Turnover Survey (JOLTS) will be published on Tuesday, followed by ADP’s private payrolls report on Wednesday, initial jobless claims on Thursday, and the vital July jobs report on Friday. Economists surveyed by FactSet predict that the U.S. economy added 115,000 jobs in July, a decrease from 147,000 in June, and expect the unemployment rate to show a slight increase to 4.2% from 4.1%.

As the week unfolds, the markets will be keenly watching how these economic indicators and corporate earnings influence investor sentiment amid ongoing trade developments.