S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
The US stock market futures have edged higher on Monday, as traders await a likely 90-day extension of the China-US tariff truce and key tech earnings reports. The S&P 500 and Nasdaq 100 futures rose 0.10% and 0.20%, respectively, indicating a positive start to the week.
The tariff truce, which was announced in October, is set to expire on Sunday. Market analysts are expecting a 90-day extension, which would give both countries more time to negotiate a more comprehensive trade deal. The news of the potential extension has boosted investor sentiment, leading to the rise in futures prices.
Another major factor driving the market higher is the upcoming tech earnings season. Several major tech companies, including Microsoft, Alphabet, and Amazon, are set to report their quarterly earnings in the coming days. Investors are eagerly awaiting these reports to gauge the health of the tech sector and the overall economy.
Michael Wilson, a strategist at Morgan Stanley, is forecasting strong 12-month returns for the S&P 500, citing several factors that will drive the market higher. These include the growth of artificial intelligence, tax breaks, dollar weakness, and possible Federal Reserve interest rate cuts in 2026.
“In our view, the current environment is conducive to strong returns in the S&P 500,” Wilson said in a note to clients. “We expect AI to continue to drive innovation and growth, and the recent tax cuts will provide a boost to corporate profits. Additionally, a weaker dollar will make US exports more competitive, and if the Fed cuts rates in 2026, it will provide a further tailwind to the market.”
Wilson’s forecast is based on the idea that the S&P 500 will reach 4,200 by the end of 2023, which would represent a gain of around 20% from current levels. This would be a significant increase, given the market’s performance over the past few years.
The rise in futures prices is also being driven by the recent decline in US-China trade tensions. The two countries have been engaged in a trade war for several months, which has led to tariffs being imposed on billions of dollars’ worth of goods. However, the recent announcement of a tariff truce has given investors hope that the two countries can work out a more comprehensive deal.
The tariff truce has also had a positive impact on the global economy. The International Monetary Fund (IMF) has estimated that the trade tensions have reduced global economic growth by around 0.5% in 2019. However, the recent decline in tensions has given the IMF hope that the global economy can recover in 2020.
In conclusion, the rise in S&P 500 and Nasdaq futures is a positive sign for the market, indicating that investors are becoming more optimistic about the direction of the economy. The likely extension of the China-US tariff truce and the upcoming tech earnings reports will be key factors driving the market higher in the coming days.
