S&P 500, Nasdaq Futures Rise as Tariff Truce, Tech Earnings Eyed
The US equity markets are set to open higher on Monday, as traders are optimistic about a potential 90-day extension of the China tariff truce and the upcoming tech earnings season. The S&P 500 and Nasdaq 100 futures rose 0.10% and 0.20%, respectively, in the pre-market trading session.
The market sentiment was boosted by reports that the US and China are likely to extend their tariff truce, which has been in place since December 2019. The truce has helped to ease trade tensions between the two countries, and an extension would likely be seen as a positive development for the global economy.
In addition to the tariff truce, traders are also eyeing the upcoming tech earnings season, which is set to kick off this week. The earnings reports from major tech companies such as Apple, Microsoft, and Alphabet will be closely watched for any signs of weakness or strength in the sector.
Morgan Stanley’s Chief US Equity Strategist, Michael Wilson, is forecasting strong 12-month returns for the US equity market. In a recent note, Wilson cited several factors that could drive the market higher, including the increasing adoption of artificial intelligence (AI), the benefits of tax cuts, the weakness of the US dollar, and the possibility of rate cuts by the Federal Reserve in 2026.
“The combination of these factors should support strong returns for the US equity market over the next 12 months,” Wilson said in a statement.
The S&P 500 and Nasdaq 100 have both rallied significantly over the past year, with the S&P 500 gaining over 20% and the Nasdaq 100 rising over 30%. The gains have been driven by a combination of factors, including the tariff truce, the Federal Reserve’s decision to cut interest rates, and the strong earnings growth of many US companies.
In recent weeks, the market has been impacted by concerns over the spread of the coronavirus, which has led to lockdowns and disruptions to global supply chains. However, the market has largely ignored these concerns, with the S&P 500 and Nasdaq 100 continuing to rise.
The upcoming tech earnings season is expected to provide further evidence of the strength of the US economy. Many of the largest tech companies, including Apple, Microsoft, and Alphabet, are expected to report strong earnings growth, driven by their dominance in the global technology market.
In addition to the tech earnings, traders are also eyeing the Federal Reserve’s monetary policy decisions. The Fed is expected to keep interest rates unchanged at its next meeting, but traders are watching for any signs of a potential rate cut in the future.
The US dollar, which has been weakness over the past year, is also expected to continue its decline. A weaker dollar can help to boost the profits of US companies that generate revenue in foreign currencies, which could provide a further boost to the equity market.
In conclusion, the S&P 500 and Nasdaq 100 futures are set to open higher on Monday, driven by optimism over the potential tariff truce extension and the upcoming tech earnings season. The market is expected to continue its rally, driven by strong earnings growth, a weaker dollar, and the possibility of rate cuts by the Federal Reserve in the future.
