U.S. stock futures moved higher Monday following the announcement of a significant trade agreement between the United States and the European Union, easing fears of a trade war that could have disrupted global markets. Market focus now shifts to trade talks between the U.S. and China in Sweden, where reports indicate the two economic giants may extend their current tariff truce. This week is especially critical as an August 1 deadline looms for increased “reciprocal” tariffs by the U.S. on various countries, alongside a heavy schedule of corporate earnings, crucial economic releases, and a Federal Reserve rate decision.
Futures on the Rise
By 03:25 ET, futures for the Dow Jones gained 146 points, or 0.3%, S&P 500 futures were up 25 points, or 0.4%, and Nasdaq 100 futures climbed 127 points, or 0.5%.
Friday’s session saw record closing highs for both the S&P 500 and the tech-heavy Nasdaq, extending Wall Street’s strong momentum. Robust quarterly earnings reports and a clearer outlook on U.S. tariff policies have helped bolster investor confidence.
European stocks also closed near a four-month high, setting a positive tone for U.S. markets.
Details on the U.S.-EU Trade Deal
President Donald Trump announced in Scotland on Sunday that the U.S. and EU finalized a landmark trade agreement including a 15% tariff on most European imports.
The deal covers large-scale purchases of U.S. energy and military equipment by the EU, as well as substantial investments in the American economy.
“They are agreeing to open up their countries to trade at zero tariff,” Trump told the press, adding the EU would “purchase a vast amount of military equipment” from the U.S.
European Commission President Ursula von der Leyen confirmed the 15% tariff would apply broadly and said the move would help “rebalance” trade between the two major partners. The U.S. imported $3.3 trillion in goods last year, with over $600 billion from the EU.
This agreement should calm investors worried about the August 1 deadline, when Trump’s broad “reciprocal” tariffs are scheduled to begin. The EU had faced possible 30% tariffs and had been seeking a zero-for-zero tariff deal.
U.S.-China Trade Talks Expected to Extend Truce
Trade discussions between the U.S. and China, starting Monday in Stockholm, are expected to result in a 90-day extension of the existing tariff truce, the South China Morning Post reported, citing sources familiar with the talks.
The current suspension of most tariffs expires on August 12.
The talks are expected to focus on unresolved concerns like U.S. complaints over China’s industrial overcapacity, rather than pushing for immediate breakthroughs.
Neither side plans to impose new tariffs or escalate tensions during the extension. China will also likely seek clarification from Washington on 20% tariffs applied in March on Chinese goods over fentanyl issues.
Trump stated Sunday that the U.S. is “very close” to a deal with China but did not provide further details. China’s People’s Daily editorial reaffirmed Beijing’s commitment to resolving disputes through “equal dialogue and mutual respect.”
The Financial Times noted the U.S. has temporarily suspended tech export restrictions to China to avoid disrupting the negotiations.
A Busy Week Ahead for Markets
ING analysts describe this week as “massive” for the U.S. economy, with potential new trade deals before August 1. Several major tech companies, including Meta Platforms, Microsoft, Apple, and Amazon, are set to report earnings.
Economic highlights include the July nonfarm payrolls report and a key inflation measure, both closely watched by the Federal Reserve ahead of its Wednesday rate decision.
Despite pressure from President Trump for rate cuts, the Fed is widely expected to hold rates steady. Policymakers have taken a “wait-and-see” approach, partly due to uncertainties surrounding tariffs and their economic impact.
Gold Holds Ground
Gold prices remained steady Monday, supported by a weaker dollar and increased risk appetite following the U.S.-EU trade agreement.
Investors remain cautious ahead of the Fed announcement, watching closely for signals on the economic outlook for the rest of 2025.
Spot gold edged up 0.1% to $3,340.02 per ounce, with futures also rising 0.1% to $3,396.67 as of 03:29 ET.
Oil prices received a boost from the trade deal optimism, while risk sentiment also lifted Bitcoin.
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