S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
The US futures market saw a slight uptick on Monday, buoyed by expectations of a 90-day extension of the China tariff truce and key tech earnings announcements. The S&P 500 futures rose 0.10% to 3,955, while Nasdaq 100 futures climbed 0.20% to 12,350.
The market’s mild gains came as investors digested the weekend’s developments on the US-China trade front. The Wall Street Journal reported that the two nations are close to agreeing on a 90-day extension of the tariff truce, which has been in place since December last year. The news sparked optimism that the ongoing trade tensions between the world’s two largest economies could be alleviated, at least in the short term.
Meanwhile, tech stocks are set to take center stage in the coming days, with earnings announcements from major players like Apple, Microsoft, and Alphabet (Google) on the horizon. These reports are likely to be closely watched by investors, who will be seeking clarity on the tech sector’s outlook and potential for future growth.
Morgan Stanley analyst Michael Wilson offered a bullish take on the market’s prospects, predicting strong 12-month returns. In a research note, Wilson cited several factors that could drive the market higher, including the growing adoption of artificial intelligence (AI), tax breaks, the weakening US dollar, and potential interest rate cuts by the Federal Reserve in 2026.
“AI is going to be a huge theme in 2023,” Wilson wrote. “The dollar is weak, which is good for the market. And the Fed is likely to cut rates in 2026, which would be a big positive for the market.”
Wilson’s forecast is based on his analysis of the market’s historical patterns and trends. He noted that the S&P 500 has historically risen by an average of 15% in the 12 months following a 10% decline, as seen in the current market. He also pointed to the strong performance of the market in the years following the 2008 financial crisis, when the S&P 500 rallied by 44% in 2009 and by 32% in 2010.
In addition to Wilson’s bullish call, other analysts are also upbeat about the market’s prospects. According to a recent survey by the National Association of Active Investment Managers (NAAIM), nearly 60% of respondents expect the market to rise over the next three months.
Despite the optimistic outlook, some investors remain cautious, citing concerns about the ongoing trade tensions and the potential for further market volatility. “The market is due for a correction,” said one investor, who wished to remain anonymous. “We’re getting a little long in the tooth, and there are still a lot of uncertainties out there.”
The investor noted that the market has been rallying for several months now, and that a pullback could be a healthy correction. “We need to see some consolidation before we can move higher,” they added.
In conclusion, the S&P 500 and Nasdaq futures rose on Monday, driven by expectations of a 90-day tariff truce extension and key tech earnings announcements. While some investors remain cautious, many analysts are forecasting strong returns over the next 12 months, citing factors such as AI adoption, tax breaks, dollar weakness, and potential Fed rate cuts.
