S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
Monday morning saw US futures edge higher, with traders anticipating a likely 90-day extension of the China-US tariff truce and key tech earnings on the horizon. S&P 500 and Nasdaq 100 futures rose 0.10% and 0.20%, respectively, as investors looked to the week’s earnings reports from major tech companies.
The upbeat market sentiment was also influenced by a positive commentary from Morgan Stanley’s Michael Wilson, who forecast strong 12-month returns for the S&P 500. Wilson cited several factors driving his optimism, including the growing impact of artificial intelligence (AI) on the economy, tax breaks, a weakening US dollar, and potential interest rate cuts in 2026.
The tariff truce, which has been in place since December, is set to expire on March 1. While there have been no official announcements from the US and Chinese governments, market participants expect an extension to avoid a renewed escalation of trade tensions. This sentiment was reflected in the prices of US soybean futures, which rose 1.5% on Monday, as investors bet on increased demand from China.
Tech earnings, which are expected to dominate the week’s market action, are also providing a boost to sentiment. Major companies such as Apple, Amazon, and Alphabet are set to report their quarterly earnings, with investors looking for signs of continued growth and profitability. Last quarter’s earnings season saw a strong performance from the tech sector, with many companies beating expectations and issuing upbeat guidance.
In addition to the tariff truce and tech earnings, analysts are also pointing to the potential for a US-China trade deal as a catalyst for market gains. While the prospect of a deal is still uncertain, market participants are optimistic that progress can be made in the coming weeks.
“The window for a trade deal is still open, and we expect the US and China to make progress in the next few weeks,” said analysts at Goldman Sachs. “A deal would be a significant positive for the market, and we expect it to drive a rally in equities.”
Despite the positive sentiment, there are still risks on the horizon that could impact market performance. The ongoing spread of the coronavirus, which has already had a significant impact on global supply chains and economic activity, remains a key concern. Additionally, the US Federal Reserve’s monetary policy decisions, including its interest rate setting and balance sheet management, will continue to be closely watched by investors.
In terms of specific stock performance, the S&P 500 and Nasdaq 100 indices are likely to be influenced by the tech earnings reports. Apple, which is set to report its earnings on Tuesday, is expected to generate significant revenue growth, driven by its services segment and international sales. Amazon, which is set to report its earnings on Thursday, is also expected to deliver strong results, driven by its e-commerce business and cloud computing segment.
In conclusion, Monday’s market action was characterized by a positive sentiment, driven by the likely extension of the China-US tariff truce and key tech earnings on the horizon. While there are still risks on the horizon, including the spread of the coronavirus and the Fed’s monetary policy decisions, analysts are optimistic that the market will continue to rally in the coming weeks.
