US futures
Dow futures 0.51%, S&P futures 0.81% & Nasdaq futures 1.2%
In Europe
FTSE 0.29% & DAX 0.13%
- Stocks set to open at record highs
- The Fed is expected to cut rates by 25 bps on Wednesday
- Earnings ramp up this week with 5 Magnificent seven stocks
- Oil steadies after jumping 7% last week
US-China trade framework & Fed optimism
U.S. stocks are on track for record highs on Monday, fueled by optimism of the U.S.-China trade truce, which boosted risk appetite at the start of a week packed with central bank decisions and big tech earnings.
Over the weekend, top US and Chinese trade negotiators worked on a range of contentious points, paving the way for Trump and Xi Jinping to finalise a deal when they meet on Thursday. The latest developments have eased trade tensions that had been rattling global markets. A deal could remove the risk of steeper US tariffs and China's rare earth export controls.
Attention this week will also be on the Federal Reserve rate decision, where the central bank is widely expected to cut rates by 25 basis points, supported by softer-than-expected inflation data on Friday.
US indices rallied to record highs last week after CPI rose by less than expected and core CPI unexpectedly fell. However, the ongoing US government shutdown could cause the Fed to adopt a more cautious stance. A hawkish cut could put pressure on stocks, raising questions about a December rate cut.
This week is also the business week for Q3 earnings. 173 S&P 500 Will report this week, including five of the magnificent 7, critical drivers of earnings growth and firms that account for a significant share of the S&P 500’s market capitalization, making these earnings key. While Tesla reported last week, Alphabet, Meta, and Microsoft report after the close on Wednesday, and Apple and Amazon report after the close on Thursday.
Corporate news
Rare Earth stocks are falling after Treasury Secretary Scott Bessent said he expects China to delay imposing strict rare earth export controls as part of a deal with the US. Antimony tumbled nearly 15%, Critical Metals dropped 9% USA Rare Earth is down 7%.
Lululemon Athletica is rising 3.3% after saying it was partnering with the National Football League to launch an apparel collection for all NFL teams.
Chip stocks tied to China rise amid optimism over a potential deal between Trump and the Chinese president to avoid new 100% tariffs on Chinese goods. AMD is up 2.5% and NVIDIA is rising 3% Broadcom is also up 2%
Gold miners are falling as the price of gold drops amid a potential trade truce between the US and China. Miners such as Newmont and Barrick Mining are trading 3 to 5% lower.
Nasdaq 100 forecast – technical analysis.
The Nadaq is attempting to break out of its rising channel, reaching a fresh record high of 25,360. Buyers will look to extend the bullish run towards 25,500 and 26,000. Support is seen at 25,200 and 24,850, the 20 SMA, which has guided the price higher. Below here, attention turns to 23,980. A break below here creates a lower low.
FX markets – USD falls, GBP/USD rises
The U.S. dollar is falling amid an improved market mood following the latest developments in U.S.-China trade and expectations that the Fed will cut interest rates by 25 bps this week after cooler-than-forecast inflation last week.
EUR/USD is rising amid a weaker USD and following a stronger-than-expected German IFO business sentiment reading. The survey showed that morale rose to 88.4, up from 87.7, and beat forecasts of 88. Attention will turn to the ECB rate decision on Thursday, where the ECB is expected to leave rates unchanged.
The GBP/USD is rising, boosted by signs of a resilient UK economy. Data on Friday showed that UK retail sales were stronger than forecast, rising 0.5% MoM. Meanwhile, the composite PMI unexpectedly rose to 51.1, after the manufacturing sector improved from 46.6 to 49.6. However, firms were cautious regarding hiring and investment ahead of the November Budget.
Oil steady after last week’s gains.
Oil prices are holding steady after jumping last week, as investors weigh up the potential impact of the US-China trade negotiations.
While news of a substantial framework for the US-China trade deal boosted the market mood, lifting stocks and pulling safe havens lower. Oil is also falling as the market appears less convinced of a positive impact on demand.
Concerns over lacklustre demand and oversupply from OPEC+ had weighed on the market, pulling oil prices to a six-month low earlier in the month. However, this decline was quickly reversed following the Trump administration's application of sanctions to two major Russian oil producers, Rosneft and Lukoil, last week.
