S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
US futures edged higher on Monday, as investors responded positively to the likelihood of a 90-day extension of the China tariff truce and key tech earnings awaited. S&P 500 and Nasdaq 100 futures rose 0.10% and 0.20%, respectively, indicating a strong start to the week for the US stock market.
The news of a possible tariff truce extension comes amid ongoing trade negotiations between the US and China. The truce is set to expire on December 15, and investors are optimistic that a deal can be reached to avert further tariffs. This development has contributed to the recent rally in equities, as traders seek to capitalize on the potential for reduced trade tensions and increased economic growth.
In addition to the tariff truce, investors are also eyeing key tech earnings reports from several major companies. Results from the likes of Apple, Amazon, and Alphabet are expected to provide valuable insights into the performance of the tech sector and the broader economy. With many of these companies having reported strong earnings in recent quarters, investors are anticipating another round of positive results.
Morgan Stanley’s Michael Wilson is one analyst who is forecasting strong 12-month returns for the S&P 500. In a recent note, Wilson cited several factors that he believes will drive the market higher, including the growing adoption of artificial intelligence (AI) technologies, tax breaks, dollar weakness, and potential Federal Reserve rate cuts in 2026.
Wilson’s prediction is based on his analysis of the current market environment, which he believes is characterized by a “perfect storm” of factors that are likely to drive growth and inflation higher. He points to the increasing use of AI in various industries, which he believes will lead to improved productivity and increased business investment. Additionally, Wilson notes that the recent tax cuts and dollar weakness are likely to boost economic growth and corporate profits.
Furthermore, Wilson is optimistic about the potential for Federal Reserve rate cuts in 2026. He believes that the Fed will need to take action to stimulate the economy, given the ongoing challenges posed by low inflation and a slowing global economy. With rates likely to remain low for an extended period, Wilson believes that investors will continue to seek out high-yielding assets, such as stocks and bonds.
In terms of the current market landscape, the S&P 500 has been trending upwards in recent weeks, driven by a combination of factors including the tariff truce, strong earnings reports, and low interest rates. The index has broken out of a recent trading range, and is now trading at its highest level since August.
The Nasdaq 100, which is heavily weighted towards tech stocks, has also been a strong performer in recent weeks. The index has broken out of a recent trading range, and is now trading at its highest level since September.
Overall, the combination of a likely tariff truce extension, key tech earnings reports, and improving economic conditions are likely to drive the S&P 500 and Nasdaq 100 higher in the coming weeks. With many analysts predicting strong returns for the market, investors are likely to remain optimistic and continue to seek out high-yielding assets.
