Dow Futures are experiencing an uptick following the agreement between the U.S. and the European Union on a significant deal that prevents a potentially detrimental trade war. Attention now shifts to discussions between the U.S. and China in Sweden, where media reports indicate that the world’s two largest economies might opt to prolong a trade truce. This week is critical for markets, marked by an August 1 deadline for heightened “reciprocal” U.S. tariffs on several countries. Additionally, it will showcase a series of significant corporate earnings reports, essential economic indicators, and the much-anticipated decision regarding interest rates from the Federal Reserve.

Dow futures indicated an upward trajectory on Monday, as market participants assessed significant trade developments and anticipated a series of important earnings reports, economic indicators, and central bank policy decisions in the coming week. Dow futures contract experienced an uptick of 146 points, translating to a 0.3% increase. Similarly, S&P 500 futures saw a rise of 25 points, or 0.4%, while Nasdaq 100 futures recorded an increase of 127 points, equating to a 0.5% gain. The benchmark S&P 500 and tech-heavy Nasdaq both achieved record closing highs at the conclusion of the previous session on Friday, thereby extending a robust performance for Wall Street. Positive quarterly results, along with the potential for increased clarity regarding frequently unpredictable U.S. tariff policies, have contributed to the stabilization of equity markets in recent weeks. American stock markets appeared poised for a favorable transition from Europe, where the indices reached a four-month peak.

President Donald Trump announced on Sunday while in Scotland that the United States and European Union have established a significant trade agreement, which incorporates a 15% tariff on EU goods entering the U.S. The comprehensive agreement includes considerable acquisitions of U.S. energy and military equipment by the EU, as well as significant investments in the American economy. Trump asserts that the European Union has pledged to acquire $750 billion in energy from the United States. He also stated that the EU has committed to investing $600 billion in the U.S. “They are agreeing to open up their countries to trade at zero tariff,” Trump told reporters. He noted that the EU would “purchase a vast amount of military equipment” from the U.S. European Commission President Ursula von der Leyen confirmed that the agreement would entail 15% tariffs universally, emphasizing that this action would assist in “rebalancing” trade between the two significant trading partners. In the previous year, the United States imported $3.3 trillion worth of goods, with over $600 billion originating from the 27-member European Union. The agreement has the potential to assuage investor concerns, which had been heightened by the possibility that negotiations might not conclude before August 1, the date on which Trump’s extensive “reciprocal” tariffs are set to be implemented. The EU was contending with elevated tariffs of 30% and had allegedly been advocating for a zero-for-zero agreement with the White House.

The U.S. and China are anticipated to prolong their tariff truce for another 90 days as trade negotiations commence on Monday in Stockholm, according to a report from the South China Morning Post (SCMP) on Sunday, referencing sources familiar with the discussions. The provisional halt on the majority of tariffs, established in May, is scheduled to conclude on August 12. The SCMP report indicates that both parties intend to utilize the third round of negotiations to delineate their stances on outstanding matters, particularly U.S. apprehensions regarding China’s industrial overcapacity, rather than seeking immediate breakthroughs. According to sources cited by SCMP, it appears that throughout the extension period, both parties are not intending to introduce new tariffs or heighten the existing trade conflict. Beijing is anticipated to pursue clarification from Washington regarding the 20% tariffs enacted on Chinese goods in March, which are associated with concerns over fentanyl, according to the report. On Sunday, Trump indicated that the U.S. is “very close” to reaching a deal with China, though he refrained from providing further details. In a recent editorial, China’s People’s Daily articulated that Beijing continues to prioritize the resolution of disputes via equal dialogue and mutual respect. In the interim, United States has suspended restrictions on technology exports to China in order to prevent any disruption to the ongoing negotiations.

Markets are currently preparing for a week that analysts at ING have characterized as a “massive” week for the U.S. economy. In the context of potential trade agreements prior to August 1, the upcoming days are poised to reveal a significant array of corporate earnings reports, notably from major technology firms such as Facebook-owner Meta Platforms, Microsoft, Apple, and Amazon. July’s nonfarm payrolls report and a reading of inflation, which are closely monitored by the Federal Reserve, are set to be released. Additionally, the Fed will announce its latest interest rate decision on Wednesday. It is expected that Federal Reserve officials will maintain the current borrowing costs, despite the increasing pressure from Trump on the central bank, particularly directed at Chair Jerome Powell, to expedite rate reductions. Policymakers have recently indicated a “wait-and-see” stance regarding future rate decisions, partly due to the uncertainty surrounding the trajectory of Trump’s levies and their effects on the broader economy.

Gold prices remained stable on Monday, as market participants observed an increased risk appetite stemming from the trade agreement between the U.S. and EU, while simultaneously exercising caution in anticipation of the Federal Reserve’s interest rate decision later this week. Market participants are likely to be especially attentive to the insights provided by officials regarding the trajectory of the U.S. economy in the latter half of 2025. The potential for rate reductions later this year may bolster gold prices, as the asset typically performs more favorably in environments characterized by lower borrowing costs. Spot Gold experienced a modest increase of 0.1%, reaching $3,340.02 per ounce, while Gold futures similarly rose by 0.1% to $3,396.67 per ounce.

In other developments, the prevailing optimism surrounding the U.S.-EU agreement, which is anticipated to prevent a detrimental trade conflict, has contributed to an increase in oil prices. Concurrently, the enhanced risk appetite has positively influenced Bitcoin valuations.