U.S. stock futures edged higher Monday as investors digested disappointing employment data, fresh trade developments, and the evolving outlook for Federal Reserve interest rates. Encouraging earnings results have helped offset concerns about an economic slowdown and the potential fallout from escalating tariffs, while Berkshire Hathaway (NYSE:BRK.A) reported a notable drop in profits due to a write-down on its Kraft Heinz (NASDAQ:KHC) holdings.
Futures Climb After Last Week’s Drop
Following a steep sell-off to close last week, U.S. futures gained traction early Monday amid renewed hopes for an interest rate reduction. By 03:00 ET, Dow futures had climbed 128 points (0.3%), S&P 500 futures were up 24 points (0.4%), and Nasdaq 100 futures added 102 points (0.4%).
Wall Street’s sharp declines on Friday reflected investor worries sparked by a soft jobs report and President Donald Trump’s announcement of increased tariffs on a broad range of trading partners.
The mood soured further after Trump dismissed the head of the Bureau of Labor Statistics, accusing her of manipulating job data without proof. Market watchers cautioned that this could undermine confidence in U.S. economic statistics, especially if Trump’s successor prioritizes political loyalty over accuracy.
The disappointing labor figures pushed investors to price in a roughly 90% chance of a Fed rate cut by September. However, media reports indicate that Federal Reserve officials remain cautious, preferring to assess upcoming data before making a policy shift.
Earnings Provide a Boost
Solid earnings reports have bolstered market sentiment amid economic uncertainty. Technology giants such as Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) delivered strong Q2 results, reiterating hefty investments in artificial intelligence.
These positive corporate performances have eased some concerns around the impact of tariffs, though a number of companies have hinted at forthcoming price increases.
According to data from LSEG cited by Reuters, earnings growth for S&P 500 firms in Q2 is expected to be around 9.8% year-over-year—up from 5.8% at the start of July. Over 80% of the companies that have reported so far have beaten profit forecasts, surpassing the four-quarter average of 76%.
This week, markets will focus on earnings from Dow members including Caterpillar (NYSE:CAT), McDonald’s (NYSE:MCD), and Disney (NYSE:DIS), which could sway market sentiment as the Dow hovers near its December record high.
Berkshire Hathaway Posts Profit Decline Amid Asset Write-Down
Berkshire Hathaway (NYSE:BRKa) reported a significant profit decline in Q2, weighed down by a $3.76 billion write-down on its Kraft Heinz (NASDAQ:KHC) stake and lower insurance underwriting income. Net profit fell to $12.37 billion from $30.35 billion a year ago, with revenues dipping 1.2% to $92.5 billion.
While gains in holdings like Apple (NASDAQ:AAPL) and American Express (NYSE:AXP) provided some support, weaker insurance results and the write-down dampened overall returns. On the bright side, operating income at Berkshire’s railroad subsidiary BNSF increased by nearly 20%, benefiting from cost reductions and lower fuel costs.
Berkshire’s cash reserves stood at $344 billion at quarter-end, slightly below the previous period but still near historic highs. These results come as Warren Buffett prepares to step down at the end of 2025, with Vice Chair Greg Abel lined up as his successor.
Oil Holds Ground After OPEC+ Production Boost
Oil prices were mostly steady on Monday despite OPEC+ agreeing to raise output in September. Brent crude slipped 0.2% to $69.80 per barrel, while West Texas Intermediate rose 0.3% to $67.53.
The producer group confirmed plans to increase daily production by 547,000 barrels next month, marking the sixth straight monthly boost and reversing earlier supply cuts of about 2.5 million barrels per day, or roughly 2.4% of global demand.
Gold Prices Pull Back; Bitcoin Gains
Gold prices showed mixed moves early Monday after a strong rally on Friday driven by hopes of Fed rate cuts. Spot gold dipped 0.2% to $3,355.69 an ounce, while December futures climbed 0.3% to $3,408.67.
The precious metal rebounded more than 2% last Friday, snapping two weeks of declines. Meanwhile, Bitcoin edged up 0.8% to $114,567.60, recovering from a roughly 3% drop over the previous five days.
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