United States equity futures advanced in Sunday evening trade (Monday AEST) as investors braced for a high-impact week filled with corporate earnings, a critical Federal Reserve meeting, key inflation data, and President Donald Trump’s 1 August tariff deadline.
By 9:25 am AEST (11:25 pm GMT), futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.3%, while Nasdaq 100 futures rose 0.4%.
The optimism followed President Donald Trump’s announcement that the United States had reached a new trade agreement with the European Union to lower tariffs up to 15%.
The deal marks a sharp shift from Trump’s earlier threat of imposing 30% duties on most EU imports, signalling a major de-escalation in transatlantic trade tensions.
ANZ analysts noted: "The EU faces a 15% tariff on exports to the U.S. It was initially described as applying to all goods, but President Trump said later that pharmaceuticals and metals were excluded.
"In exchange, the EU is reported to have agreed to zero tariffs on U.S. exports to the EU, USD600bn of investments in the US, USD750bn of energy purchases and 'vast' purchases of military equipment.
"Trump described it as 'the biggest of all the deals'. Trump said he is looking at deals for 'three or four more countries' with the remainder to simply receive a letter advising their tariff rate."
Wall Street closed last week on a high note, buoyed by positive earnings results and multiple international trade agreements. The Dow rose 0.5% on Friday, while the S&P 500 and Nasdaq added 0.4% and 0.2%, respectively, notching fresh record highs.
Markets now turn their attention to what is expected to be the most eventful week of the earnings season. More than 150 S&P 500 companies will report quarterly results, including tech giants Meta Platforms and Microsoft, followed by Amazon and Apple later in the week.
Alongside earnings, the U.S. Federal Reserve will conclude its two-day monetary policy meeting on Wednesday (Thursday AEST). While the Fed is widely expected to maintain its benchmark interest rate within the current 4.25% to 4.50% range, investors will closely analyse Fed Chair Jerome Powell’s press conference for any indication of a potential rate cut in September.
ANZ analysts added, “We expect the FOMC to hold rates steady on Thursday morning (4 am AEST) but will be watching for signals at Powell’s press conference that September is live for a cut.”
Tariff-related inflation concerns will also be in focus on Thursday with the release of the June personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure.
Markets are expecting the monthly PCE inflation rate to rise to 0.3% from 0.1%.
Labour market data will round out the week, with investors set to review Tuesday’s job openings and labor turnover survey (JOLTS), Wednesday’s ADP private payroll report, Thursday’s weekly initial jobless claims, and Friday’s official July nonfarm payroll jobs report.
Markets expect U.S. payrolls to show an increase of 102,000 jobs for the month, down from 147,000 in June, with the unemployment rate edging up to 4.2% from 4.1%.
