S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
The US stock market futures edged higher on Monday, as traders awaited a likely 90-day extension of the China tariff truce and eyed key tech earnings announcements. S&P 500 and Nasdaq 100 futures rose 0.10% and 0.20%, respectively, signaling a positive start to the trading week.
The optimism in the market can be attributed to the ongoing trade discussions between the US and China. The two nations have been engaged in a trade war for over a year, with tariffs imposed on billions of dollars’ worth of goods. However, recent developments suggest that a truce may be in sight. Last week, US President Donald Trump announced that he would delay a planned increase in tariffs on Chinese goods, sparking hopes of a breakthrough.
The tariff truce is expected to be extended for another 90 days, giving both sides more time to negotiate a deal. The news has been welcomed by investors, who see it as a positive development for the global economy. A prolonged trade war would have far-reaching consequences, including higher prices, reduced consumer spending, and lower economic growth.
In addition to the tariff truce, investors are also eyeing key tech earnings announcements. Several major tech companies, including Apple, Amazon, and Microsoft, are set to release their quarterly results in the coming days. The earnings reports will provide valuable insight into the health of the tech sector and the broader economy.
Morgan Stanley’s Michael Wilson, a renowned stock market strategist, has forecast strong 12-month returns for the S&P 500. Wilson cites several factors that are likely to drive the market higher, including the growth potential of artificial intelligence (AI), tax breaks, dollar weakness, and possible Fed rate cuts in 2026.
Wilson believes that AI will be a key driver of growth in the coming years, as it becomes increasingly integrated into various industries. The strategist also expects the Federal Reserve to cut interest rates in 2026, which would boost the stock market. Additionally, Wilson sees the recent decline in the US dollar as a positive development, as it makes US exports more competitive and reduces the risk of a trade war escalation.
The Fed has been closely monitoring the economy and has been weighing the need for further rate cuts. While the central bank has cut interest rates three times this year, it has also signaled that it may not cut rates again in the near future. However, Wilson believes that the Fed will ultimately cut rates in 2026, driven by concerns about the global economy and the need to stimulate growth.
The S&P 500 and Nasdaq 100 have both been trading near record highs in recent weeks, driven by the optimism surrounding the tariff truce and the tech earnings season. The S&P 500 has risen over 25% in the past year, while the Nasdaq 100 has surged over 35%. The momentum is expected to continue, driven by the factors mentioned above.
In conclusion, the S&P 500 and Nasdaq 100 futures rose on Monday, as traders eyed a likely 90-day China tariff truce extension and key tech earnings. The optimism in the market is driven by the potential for a trade deal, the growth potential of AI, tax breaks, dollar weakness, and possible Fed rate cuts in 2026. As the trading week unfolds, investors will be closely watching the tech earnings announcements and the developments in the trade talks.
