U.S. equity futures experienced a notable increase on Sunday evening as Wall Street braced for a particularly busy week ahead. This week is set to unveil earnings from several major tech companies, a pivotal Federal Reserve meeting, President Donald Trump's August 1 tariff deadline, and crucial inflation data.
Futures linked to the Dow Jones Industrial Average rose by 180 points, or 0.4%. Meanwhile, S&P 500 futures increased by 0.3%, and Nasdaq 100 futures saw a gain of 0.4%. This positive momentum follows Trump's announcement on Sunday that the U.S. has reached an agreement with the European Union to lower tariffs to 15%. Previously, the president had threatened to impose 30% tariffs on most imported goods from the U.S.'s largest trading partner.
Wall Street is coming off a strong week, driven by impressive earnings and recent agreements between the U.S. and other trading partners, including Japan and Indonesia. On Friday, all three major averages concluded their day, and week, with significant gains. The blue-chip Dow climbed 208.01 points, or 0.47%, closing at 44,901.92. The broad market S&P 500 gained 0.40% to finish at 6,388.64, marking its fifth consecutive day of record closings and the 14th record close of the year. The tech-heavy Nasdaq Composite also rose by 0.24%, settling at 21,108.32 for its 15th record close of the year.
Nick Savone of Morgan Stanley's Institutional Equity Division commented over the weekend that a healthy mix of earnings beats, positive developments in U.S.-Japan trade relations, strong capital expenditure (capex) commentary, and a bullish AI Action Plan have kept investor enthusiasm robust. As we approach the busiest week of S&P 500 earnings season, with more than 150 companies set to report their quarterly results, including notable names like Meta Platforms and Microsoft on Wednesday, followed by Amazon and Apple on Thursday, investor sentiment remains high.
Investors are particularly keen to hear companies' insights on AI spending, which will provide direction on whether the substantial investments in hyperscalers this year are warranted. Additionally, the Federal Reserve will hold a two-day policy meeting this week, concluding on Wednesday. While the central bank is anticipated to maintain interest rates within the current target range of 4.25% to 4.5%, investors will be on the lookout for signals regarding potential rate cuts at the upcoming September meeting.
Tariffs and their impact on inflation will be key topics on Thursday as traders await the release of the June personal consumption expenditures price (PCE) index, the Fed's preferred measure of inflation. According to FactSet, the report is expected to indicate inflation rising to 2.4% from 2.3% year-over-year, and to 0.31% from 0.14% on a monthly basis.
This week will also feature a series of jobs-related data releases, including the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday, ADP's private payrolls report on Wednesday, initial jobless claims on Thursday, and the critical 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. The unemployment rate is anticipated to rise slightly to 4.2% from 4.1%.
