S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
The US futures market edged higher on Monday, as traders anticipated a likely 90-day extension of the China tariff truce and awaited key tech earnings. The S&P 500 and Nasdaq 100 futures rose 0.10% and 0.20%, respectively, signaling a positive start to the week for equities.
The tariff truce, which has been in place since December, is set to expire in March. However, according to reports, both the US and China are expected to agree on a 90-day extension, giving negotiators more time to hammer out a comprehensive trade deal. This development has helped alleviate concerns over the potential impact of tariffs on the global economy, allowing investors to focus on other market drivers.
One of the key drivers of the market’s positive momentum is the upcoming tech earnings season. Many major technology companies, including giants like Apple, Microsoft, and Alphabet, are set to release their quarterly earnings reports in the coming weeks. Analysts are expecting strong results, driven by factors such as increased demand for cloud computing services, artificial intelligence (AI) adoption, and robust consumer spending.
Morgan Stanley’s Michael Wilson, a prominent analyst, has forecasted strong 12-month returns for the S&P 500, citing several factors that will drive the market higher. In an interview with Bloomberg, Wilson pointed to the following catalysts:
- AI Adoption: Wilson believes that the increasing adoption of AI technology will drive growth in the tech sector, particularly among companies that provide AI-related services.
- Tax Breaks: The passage of the Tax Cuts and Jobs Act (TCJA) in 2017 has provided a significant boost to corporate profitability, and Wilson expects this trend to continue.
- Dollar Weakness: A weaker US dollar can increase the competitiveness of US exports, leading to improved economic growth and increased corporate earnings.
- Possible Fed Cuts in 2026: Wilson expects the Federal Reserve to cut interest rates in 2026, which would provide additional support to the market.
Wilson’s bullish outlook is in line with the broader market sentiment, which has been trending higher in recent months. The S&P 500 has risen over 20% since the beginning of the year, driven by a combination of factors including the tariff truce, strong earnings growth, and accommodative monetary policy.
In addition to the tech earnings season, investors will also be keeping a close eye on the ongoing trade negotiations between the US and China. While a 90-day extension of the tariff truce is likely, the ultimate goal of reaching a comprehensive trade deal remains elusive. Any developments in this area could have a significant impact on market sentiment and investor confidence.
In conclusion, the S&P 500 and Nasdaq futures rose on Monday as traders eyed a likely 90-day China tariff truce extension and key tech earnings. With strong earnings growth, accommodative monetary policy, and potential catalysts like AI adoption and tax breaks, the market is poised for further gains in the coming months. However, investors should remain cautious and keep a close eye on developments in the trade negotiations and other market-moving events.
