U.S. equity markets are poised for a slightly higher open on Tuesday, with futures pointing to further gains as investors ride the momentum that pushed major indexes to record highs at the start of the week.
Optimism over a potential trade breakthrough between the U.S. and China continues to buoy sentiment after Monday’s rally. Additional confidence has been fueled by news of a rare metals agreement between the U.S. and Japan ahead of President Donald Trump’s meeting with Chinese President Xi Jinping later this week.
That said, gains could be somewhat restrained as traders look toward the Federal Reserve’s monetary policy announcement on Wednesday. While the Fed is widely expected to cut interest rates by another 25 basis points, investors will closely monitor the accompanying statement and Chair Jerome Powell’s comments for any hints on the path of future rate cuts.
According to CME Group’s FedWatch Tool, markets currently see a 94.9% chance of another quarter-point cut in December, though expectations for additional easing in early 2026 remain uncertain.
Earnings season is also front and center, with several major tech names set to report results in the coming days, including Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), Meta Platforms Inc. (NASDAQ:META), Microsoft Corporation (NASDAQ:MSFT) and Amazon.com Inc. (NASDAQ:AMZN).
On Monday, Wall Street delivered another strong performance. Stocks rallied throughout the session, extending last week’s gains and pushing the major indexes to fresh record closes. The Nasdaq soared 432.59 points, or 1.9%, to 23,637.46, while the S&P 500 gained 83.47 points, or 1.2%, to 6,875.16. The Dow climbed 337.47 points, or 0.7%, to 47,544.59.
The rally was underpinned by growing hopes for a U.S.-China trade agreement. Over the weekend in Malaysia, Treasury Secretary Scott Bessent described the discussions with Chinese officials as a “very successful framework” for Trump and Xi to build on during Thursday’s meeting. Bessent also signaled that China is expected to resume purchases of U.S. soybeans and delay export restrictions on rare earth materials.
En route to Japan, Trump also expressed optimism about reaching a trade agreement with Beijing after signing separate trade and mineral deals with his Malaysian and Cambodian counterparts.
Investor confidence has also been bolstered by expectations of lower borrowing costs ahead of the Fed decision.
Among sectors, semiconductor stocks led the charge. The Philadelphia Semiconductor Index jumped 2.7% to a new record close, with Qualcomm (NASDAQ:QCOM) surging 11.1% after unveiling new AI accelerator chips designed to challenge NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD).
Telecom shares also showed solid gains, as reflected by a 1.4% increase in the NYSE Arca North American Telecom Index. Strength extended to transportation, steel and software stocks, while gold-related equities slumped in line with a pullback in bullion prices.
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