US equity futures are rising following a new deal between the European Union and the United States that has altered market dynamics. S&P 500 futures increased by 0.2%, building on the index's record close last Friday. Meanwhile, stocks in European markets also showed positive momentum, with the Stoxx 600 index up by 0.6%.
Despite this encouraging sentiment, the euro fell to its lowest level in a week against the dollar. Investors reacted cautiously to the tariffs imposed by the new agreement, which includes a 15% tariff on most EU exports to the US. After an initial surge, the stocks of European automakers began to stabilize as traders considered the long-term implications of the deal.
Investor optimism was once again tested as a series of major economic events were planned during the week. The US non-farm payroll, the Federal Reserve Policy meeting, and the Bank of Japan's rate announcement could still influence the financial markets. Traders are on the lookout for indications of future interest rate changes and economic trends.
Large tech companies, including Apple, Amazon, Microsoft, and Meta, are set to publish their earnings reports this week. US stocks have been sustaining substantial corporate profits, with more than 80% of the S&P 500 exceeding earnings estimates to date, according to Bloomberg Intelligence.
President Donald Trump and European Commission President Ursula von der Leyen announced the EU-US trade deal in Scotland. Within the agreement, the EU will agree to purchase American energy goods valued at $750 billion, and an additional investment of almost $600 billion will be made by the EU in the US economy. Nevertheless, the complete content of the deal is yet to be revealed.
According to the schedules released by the US and Chinese governments, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will soon meet in Stockholm to discuss extending the current US-China tariff truce for an additional three months. Their discussions are anticipated to maintain trade stability and prevent further escalation of tensions.