U.S. stock futures traded higher early Monday, supported by optimism around trade negotiations between the United States and China, alongside expectations of a pivotal week packed with major earnings and central bank decisions. Officials from both countries confirmed they had reached a framework agreement ahead of the long-anticipated meeting between their leaders. At the same time, Donald Trump said a decision on the next chair of the Federal Reserve could come before year-end.
Futures Advance
The positive tone on Wall Street follows Friday’s record-setting close, with all three major indexes rallying on softer inflation data. By 03:58 ET, Dow futures were up 323 points (+0.7%), S&P 500 futures gained 58 points (+0.9%), and Nasdaq 100 futures climbed 285 points (+1.1%).
Traders are positioning for a week that will bring earnings from tech giants and rate decisions from several major central banks, including the Fed. Markets are widely pricing in a rate cut at the Fed’s two-day meeting starting Tuesday, with CME’s FedWatch Tool showing over a 95% probability of another move lower in December.
Corporate results have also contributed to a stronger mood. Despite a lack of fresh government data amid the ongoing shutdown, analysts now expect S&P 500 companies’ third-quarter earnings to grow by 10.4% year-on-year, up from 8.8% in early October, according to LSEG data cited by Reuters.
Trade Breakthrough Lifts Sentiment
Investors welcomed signs of progress in U.S.–China trade relations. Over the weekend, negotiators from both sides announced that they had reached a framework deal on tariffs and related issues, paving the way for Thursday’s high-stakes meeting between Trump and Xi Jinping in South Korea.
U.S. trade representative Jamieson Greer said in Malaysia that the talks were entering a stage where the “final details” could soon be finalized. His Chinese counterpart Li Chenggang added that a “preliminary consensus” had been reached following “candid and in-depth discussions.”
The agreement comes after heightened tensions sparked by Trump’s threat of triple-digit tariffs in response to Chinese export restrictions on rare earths. U.S. Treasury Secretary Scott Bessent told ABC’s This Week he believes the tariffs “will be averted” and that China is prepared to make “concessions” on export controls.
Trump Hints at Fed Chair Pick by Year-End
Beyond trade, Trump indicated he could reveal his nominee for the Fed’s top job before the end of the year. Although Jerome Powell, appointed by Trump in 2017, still has time left in his term, the president has repeatedly criticized the Fed’s cautious approach to monetary policy and called for faster, more aggressive rate cuts.
Bessent said the administration is preparing a “good slate” of candidates “right after Thanksgiving.” Those reportedly in the running include Kevin Hassett, Kevin Warsh, Christopher Waller, Michelle Bowman and Rick Rieder.
Earnings Season Heats Up
The week’s earnings calendar kicks off with Keurig Dr Pepper (NASDAQ:KDP), expected to report adjusted Q3 earnings per share of $0.54 on revenue of $4.15 billion, according to Bloomberg estimates. Investors will also watch for updates on the impact of recent trade tensions, including Trump’s decision to impose a new 10% tariff on Canadian goods over the weekend.
Later in the week, focus will shift to mega-cap tech results from Alphabet Inc. (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) on Wednesday, followed by Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) on Thursday.
Gold Softens as Risk Appetite Improves
Gold prices extended last week’s losses as optimism over U.S.–China trade progress reduced demand for safe-haven assets. Spot gold slipped 1.3% to $4,060.80 an ounce by 00:44 ET, while U.S. gold futures fell 1.6% to $4,072.60.
The decline was limited by expectations of a Fed rate cut, as lower interest rates typically support non-yielding assets like gold. The metal recently ended a nine-week winning streak after hitting record highs above $4,300/oz.