U.S. stock futures showed slight gains on Monday, as investors braced for a busy week filled with earnings announcements from key S&P 500 companies. Verizon (NYSE:VZ) is expected to kick off the reporting season on Monday, followed by tech giants Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA) later this week. Meanwhile, Japan’s parliamentary elections have raised concerns over ongoing trade negotiations with the U.S., and the Wall Street Journal has revealed that the European Union is preparing new retaliatory measures against American companies if a deal with Washington isn’t reached before looming tariff deadlines.
Futures edge higher
As of 03:38 ET, Dow futures climbed by 118 points (0.3%), S&P 500 futures added 15 points (0.2%), and Nasdaq 100 futures advanced 61 points (0.3%). This follows a mixed finish on Friday, with the Dow Jones Industrial Average down 0.3%, and the S&P 500 and Nasdaq Composite largely unchanged.
Investor caution was sparked by media reports suggesting that the Trump administration is considering raising the minimum tariff on the European Union to between 15% and 20%, up from the current 10%. However, U.S. consumer sentiment improved in July despite ongoing concerns over inflation risks driven by tariffs.
The aggressive trade agenda of President Donald Trump remains a dominant theme amid a rapid flow of Q2 earnings reports. Despite an uncertain outlook for 2025, over 80% of companies that have reported results have beaten analysts’ estimates.
Shares in cryptocurrency-related firms climbed after the U.S. House of Representatives passed legislation to create a regulatory framework for digital assets. Coinbase Global (NASDAQ:COIN) gained 2.2%, while Robinhood Markets (NASDAQ:HOOD) rose 4.1%.
Verizon kicks off earnings season; busy week ahead
This week marks an acceleration in earnings releases, with more than 85% of S&P 500 firms yet to announce results. Verizon leads Monday’s reports ahead of the open, with chipmaker NXP Semiconductors (NASDAQ:NXPI) due after the market closes.
Tuesday will feature results from Texas Instruments (NASDAQ:TXN) and Coca-Cola (NYSE:KO), followed on Wednesday by Alphabet and Tesla. Thursday brings reports from Intel (NASDAQ:INTC), Union Pacific (NYSE:UNP), and Honeywell International (NASDAQ:HON), while Phillips 66 (NYSE:PSX) and AutoNation (NYSE:AN) will round out the week on Friday.
Only about 12% of the S&P 500 has reported earnings so far, with 86% beating earnings per share forecasts and 67% surpassing sales estimates. While some investors worry that early strong results may raise expectations too high for the coming weeks, the overall tone has been positive despite economic uncertainties and trade tensions.
Japanese elections cloud trade prospects
According to public broadcaster NHK, Prime Minister Shigeru Ishiba’s ruling coalition is expected to lose its majority in the upper house, casting doubts over the future of U.S.-Japan trade talks.
Exit polls indicate that Ishiba’s Liberal Democratic Party (LDP) and its partner Komeito failed to secure the 125 seats needed to maintain control. Despite this setback, Ishiba told NHK he plans to remain as prime minister and party leader amid growing pressure for his resignation.
This outcome follows the LDP’s significant defeat in the lower house election last October, reflecting waning public support. Opposition parties like the Constitutional Democratic Party of Japan have capitalized on promises for expanded welfare and tax cuts.
The political uncertainty could jeopardize critical trade discussions with the U.S., with Ishiba remarking that talks with President Trump are “truly down-to-the-wire.”
EU braces for possible trade retaliation against U.S. – WSJ
Japan’s negotiations with Washington form part of broader discussions ahead of the August 1 deadline when President Trump’s heightened “reciprocal” tariffs may come into force.
A key unresolved issue concerns U.S.-EU trade talks. While the EU seeks to keep the baseline tariff at 10%, U.S. officials reportedly anticipate demands for higher tariffs, possibly 15% or more, according to the Wall Street Journal.
Germany, Europe’s largest exporter, has joined France in advocating a tougher stance toward the Trump administration. The EU is even considering additional retaliatory actions targeting U.S. companies beyond existing tariffs if no agreement is reached.
Chinese markets respond to steady monetary policy
China’s CSI 300 and Shanghai Composite indexes both rose by about 0.7%, while Hong Kong’s Hang Seng gained 0.6%, after the People’s Bank of China kept its key loan prime rate unchanged, as widely expected.
This decision signals Beijing’s intent to continue supportive monetary policy, albeit possibly at a slower pace, following recent tariff reductions agreed with the U.S. China’s accommodative stance aims to support growth amid ongoing economic challenges.
Hong Kong-listed Chinese internet stocks were notable outperformers last week, boosted by Nvidia’s (NASDAQ:NVDA) announcement that it will resume sales of a critical AI chip in China. These chips are vital for China’s AI ambitions, which are led by major firms including Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), and Tencent Holdings (USOTC:TCEHY).
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