U.S. Stock Futures Edge Higher Amid U.S.-EU Trade Deal and Market Volatility Ahead of Packed Economic Week
U.S. equity futures showed modest gains Monday as Wall Street digested a newly announced trade deal between the United States and the European Union, setting the tone for what’s expected to be one of the busiest weeks of the year for markets.
Dow Jones Industrial Average futures rose 24 points (0.05%), while S&P 500 futures climbed 0.16% and Nasdaq 100 futures advanced 0.34%. The movement comes after President Donald Trump revealed that the U.S. and EU have agreed to lower tariffs to 15%, easing trade tensions that previously threatened to escalate with 30% tariffs on EU imports.
Despite the breakthrough, investor enthusiasm remained measured. “While sentiment is turning bullish, investors are hesitant to chase stocks at all-time highs based on a deal that was largely anticipated,” noted Adam Crisafulli of Vital Knowledge.
Key Market Catalysts This Week:
- Earnings Season Peaks: Over 150 S&P 500 companies will report, including heavyweights like Meta and Microsoft (Wednesday), followed by Amazon and Apple (Thursday). Investors are eyeing guidance on AI and hyperscaler spending.
- Federal Reserve Meeting: The Fed concludes its two-day meeting on Wednesday. While no rate change is expected (holding steady at 4.25%-4.5%), markets are watching for signs of a possible rate cut in September.
- Economic Data on Deck:
- GDP Report (Wed): Q2 real GDP is projected to show 2.3% annualized growth, rebounding from Q1’s 0.5% decline.
- PCE Inflation Data (Thu): Core PCE expected to remain at 2.7%, with headline inflation climbing to 2.5%.
- Labor Market Reports: Includes JOLTS (Tue), ADP private payrolls (Wed), weekly jobless claims (Thu), and July jobs report (Fri), which is expected to show 102,000 jobs added and unemployment ticking up to 4.2%.
Sector Spotlight:
Defense Stocks Rally: Shares of Kratos Defense and Lockheed Martin jumped 2.7% and 1.3% respectively, after Trump claimed the EU will purchase “hundreds of billions” in U.S. military equipment — though no exact figure was disclosed.
UBS Forecasts Short-Term Volatility: UBS Global Wealth Management warns that elevated valuations and trade uncertainty may trigger increased volatility. They advise short-term hedging for fully allocated investors and buying opportunities for under-allocated ones.
Global Market Snapshot:
- Asia-Pacific: Mixed day—Hang Seng rose 0.68%, CSI 300 up 0.21%, Kospi gained 0.42%, while Kosdaq, Nifty 50, and Sensex saw declines.
- Samsung Electronics surged over 6%, hitting a 10-month high after securing a $16.5B semiconductor contract with Tesla, confirmed by Elon Musk.
Wall Street Recap:
Markets closed last week on a high. The Dow rose 208.01 points (0.47%) to 44,901.92. The S&P 500 gained 0.40% to a record 6,388.64 — its 14th all-time close of the year. The Nasdaq Composite added 0.24%, also hitting its 15th record close of 2025.
“Strong earnings beats, major U.S. trade agreements with Japan and Indonesia, and robust AI-related capital expenditure updates have fueled market optimism,” said Nick Savone of Morgan Stanley.
