Lingering in the background this week is a highly-anticipated meeting between U.S. President Donald Trump and Russian counterpart Vladimir Putin on Friday, with the two expected to discuss a potential Ukraine peace plan. On the trade front, a fragile tariff truce between the U.S. and China is due to expire on August 12, with no sign having yet emerged of a possible extension to their agreement.  

Meanwhile, the Bank of Canada will unveil a summary of its latest gathering on Wednesday. Two weeks ago, the central bank left interest rates steady, but signaled a willingness to cut rates should there be a weakening in the Canadian economy and inflation pressures remain muted.

Futures tick up

U.S. stock index futures edged marginally higher, pausing for breath after the previous week’s sharp gains, with investors awaiting key inflation prints due later in the week.

At 06:55 ET, Dow Jones Futures traded 108 points higher, or 0.3%, S&P 500 Futures gained 7 points, or 0.1%, and Nasdaq 100 Futures were mostly unchanged.

The tech-heavy Nasdaq Composite jumped on Friday, closing at a fresh all-time high, helped by Apple’s stock price surging by more than 13% last week -- its largest weekly gain since 2020. The other averages also gained last week.

CPI leads data deluge this week

This broadly positive tone on Wall Street faces the test of key economic data this week, with the focus on the release of U.S. consumer price data for July on Tuesday.

A separate gauge of producer prices for final demand is due out on Thursday, while a metric of American retail sales and a survey of consumer sentiment are expected to be published on Friday.

The weak July jobs report at the start of the month, which also included a sharp downward revision to the numbers for June and May, has increased expectations that the Federal Reserve will cut interest rates next month.

Along with the labor market, inflation remains the other crucial pillar of the Federal Reserve’s two-pronged mandate, and it remains stubbornly elevated above the Fed’s stated 2% target. Additionally, the tariffs that the Trump administration has increased on imports from a number of trading partners are expected to lift domestic prices.

“Consensus is expecting another acceleration in core CPI, to 0.3% month-on-month (3.0% year-on-year), in this week’s July print,” said analysts at ING, in a note. “That is a number that can probably be seen as acceptable for the Federal Reserve to proceed with a September cut, given the backdrop of a significantly weaker jobs market.”

Nvidia/AMD to pay U.S. government for China sales?

Corporate earnings results for the second quarter have generally been better than expected, and investor reactions to these results have been more outsized than usual, possibly indicating that markets are homing in more on individual company performances than broader economic trends, according to analysts at Barclays (LON:BARC).

The earnings slate is largely empty Monday, but eyes will be on Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) after media reports suggested both chipmakers are set to pay the U.S. government 15% of the returns they make from the sale of its artificial intelligence to China.

Shares of C3.ai (NYSE:AI) were sharply lower in extended hours trading after the enterprise AI application software group issued a disappointing preliminary earnings announcement.

Crude stable ahead of Ukraine talks

Oil prices stabilized, after last week’s selloff ahead of scheduled talks between the U.S. and Russia later this week on the war in Ukraine.

At 06:56 ET, Brent futures edged higher to $66.71 a barrel, and U.S. West Texas Intermediate crude futures added 0.1% to $63.97 a barrel.

Both benchmarks fell by more than 4% last week as traders digested the news that Trump will meet Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.

Expectations have risen for a potential end to sanctions that have limited the supply of Russian oil to international markets.

Gold eases

Gold prices retreated, adding to the losses seen at the end of last week, as traders looked ahead to the Trump-Putin summit.

Trump’s deadline last Friday for Russia to strike a peace deal with Ukraine passed without stricter U.S. sanctions imposed on Moscow, and this has helped ease tensions. Demand for safe-haven gold was dented, as a result.

"But with Russia demanding that Ukraine cede occupied territory to end the war, it’s difficult to see a quick solution," said analysts at ING, in a note. "It’s unlikely that Ukraine will agree to give up its own territory."

At 07:00 ET, Spot Gold fell 1.2% to $3,358.80 an ounce and Gold Futures for December dropped 2.2% to $3,413.20/oz.

U.S. stock index futures rose on Friday after President Donald Trump’s temporary pick for a Federal Reserve governor fueled expectations of a more dovish central bank board.

Trump said on Thursday he would nominate Council of Economic Advisers Chairman Stephen Miran as Fed Governor Adriana Kugler’s interim replacement, following Kugler’s surprise resignation last week.

U.S. stocks lost steam on Thursday after Bloomberg News reported that Fed Governor Christopher Waller is emerging as a top candidate to be the central bank’s next chair.

Trump has repeatedly criticized Fed Chair Jerome Powell for not cutting interest rates and has accelerated the search for a replacement after several retracted threats to oust Powell before his term ends on May 15.

The White House’s push to overhaul the central bank’s leadership has fueled worries about its independence. At the same time, investors believe revising Fed leadership could favor looser monetary policy that aligns with Trump’s agenda.

According to the CME Group’s (NASDAQ:CME) FedWatch tool, traders broadly expect the Fed’s first rate cut of the year next month and see at least two reductions by year-end.

At 5:31 a.m. ET, S&P 500 E-minis were up 16 points, or 0.25%, Nasdaq 100 E-minis were up 72.25 points, or 0.31% and Dow E-minis were up 61 points, or 0.14%.

The Nasdaq eked out a record closing high on Thursday after signs that major technology firms could avoid Trump’s new tariffs on chip imports by manufacturing in the United

But the S&P 500 and the Dow ended lower, weighed down by a 14.1% drop in Eli Lilly (NYSE:LLY) after results from a late-stage study on its experimental GLP-1 pill fell behind that of Novo Nordisk (NYSE:NVO)’s.

Meanwhile, U.S. tariffs on a bunch of trading partners took effect at midnight on Thursday. Tokyo’s trade negotiator said Washington will amend a presidential executive order to remove overlapping tariffs on Japanese goods, terming it as oversight.

In earnings-related moves, Trade Desk (NASDAQ:TTD) sank 29% in premarket trading after the ad-tech firm reported a sharp slowdown in second-quarter revenue growth.

Pinterest (NYSE:PINS) tumbled 12.5% as the social media platform missed analysts’ estimates for second-quarter profit.

Microchip Technology (NASDAQ:MCHP) lost 7.9% after the chipmaker’s first-quarter results failed to impress investors.

U.S. stock futures climbed higher Thursday, buoyed by a relatively solid earnings season as President Donald Trump’s latest tariff barrage takes effect.

At 05:55 ET (09:55 GMT), Dow Jones Futures traded 240 points, or 0.5%, higher, S&P 500 Futures rose 47 points, or 0.7%, and Nasdaq 100 Futures gained 170 points, or 0.7%.

The main averages on Wall Street rose in the prior session, buoyed by strong quarterly reports, while strong gains from iPhone-maker Apple underpinned the gains.

Week to date, the S&P 500 has gained 1.7%, the NASDAQ Composite has added 2.5% and the 30-stock Dow Jones Industrial Average has advanced 1.4%. 

Apple soars on $100 billion investment pledge 

Apple (NASDAQ:AAPL) shares soared over 5% on Wednesday, and have continued to rise in premarket trading, after the White House said the company would pledge an additional $100 billion in domestic manufacturing over the next four years, raising its total U.S. investment commitment to approximately $600 billion.

The move is seen as both a policy alignment with the Trump administration and a strategic response to rising trade tensions.

Traders have continued to monitor tariff developments, with U.S. President Donald Trump imposing an additional 25% tariff on India, bringing total U.S. levies on the major trading partner to 50%.

The president said the hike is because India continues to buy Russian oil, a sign that he is following through on his threats to punish Russia’s trade partners unless a Ukraine peace deal is reached by September.

Meanwhile,Trump said he would impose a tariff of about 100% on imported semiconductors, though products from companies that build chips within the U.S. would be exempt. 

Q2 earnings season in final stretch

With the reporting season now in its final stretch, LSEG data showed that more than 80% of companies that have reported so far have exceeded earnings expectations.

There are more earnings in digest Thursday, including reports from Eli Lilly (NYSE:LLY) and Warner Bros Discovery (NASDAQ:WBD) before the bell, while Block (NYSE:XYZ) and Pinterest (NYSE:PINS) are slated to report in the afternoon.

In extended trading, Airbnb (NASDAQ:ABNB) stock slumped after the vacation rental company forecast weaker growth for the rest of the year.

DoorDash (NASDAQ:DASH) stock climbed higher after the food delivery company reported a strong second-quarter earnings report that beat expectations, boosted by resilient demand for food and grocery delivery services despite a challenging consumer environment.

Shares of engineering materials manufacturer Rogers (NYSE:ROG) jumped in extended trading after the Wall Street Journal reported that activist investor Starboard Value took a more than 9% stake in the company. 

Jobless claims due 

Weekly initial jobless claims are due later in the session, and are expected to show that initial claims for unemployment benefits rose by 3,000 to 221,000 for the week ended August 2. 

Last week’s disappointing payrolls report raised expectations that the Federal Reserve will cut interest rate cuts next month, with some Fed policymakers having signaled a willingness to slash rates at the central bank’s upcoming meeting in September to address the cooling labor market, even as worries remain that the tariffs could fuel inflation.

Traders are pricing in around a 94% chance of a Fed cut in September, up from 48% a week ago, according to the CME Group’s FedWatch Tool. In total, traders see 60.5 basis points in cuts this year.

Crude bounces on U.S. demand 

Oil prices rose Thursday, helped by signs of strong U.S. demand, although concerns about the macroeconomic impact of U.S. tariffs and the potential for the return of Russian oil remain.

At 05:55 ET, Brent futures gained 0.5% to $67.22 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $64.67 a barrel.

Crude markets were supported from a bigger-than-expected draw in U.S. crude inventories last week.

The Energy Information Administration said on Wednesday that U.S. crude oil stockpiles fell by 3 million barrels in the week ended August 1, exceeding analysts’ expectations for a relatively small draw.

Both benchmarks had fallen to their lowest in eight weeks on Wednesday, on a five-day losing streak, after Trump indicated progress in talks with Moscow over ending the war with Ukraine, potentially leading to the return of Russian oil to the global market .

Still, despite a more positive tone, the U.S. continues preparations to impose secondary sanctions, including potentially on China, to pressure Moscow to end the war in Ukraine.

Ayushman Ojha contributed to this article

Trump’s Fed appointment in spotlight

The greenback has struggled to recover from the slump late last week after the disappointing jobs report, with data on Tuesday showing the U.S. services sector activity unexpectedly flatlined in July even as input costs climbed by the most in nearly three years, underscoring the hit from Trump’s tariffs on the economy.

Traders continue to price in around a 90% chance of a Fed cut in September, with about 56 basis points worth of easing expected by the year-end.

There’s little in the way of significant economic data due Wednesday, and thus attention is firmly focused on who the U.S. president chooses to replace resigning Fed board member Adriana Kugler, with Trump saying on Tuesday he will decide on a nominee by the end of the week.

“Trump’s open attacks on the Bureau of Labor Statistics over payroll revisions have not had much market impact, but it will be interesting to see whether the selected Fed chair candidate echoes that narrative,” said analysts at ING, in a note. 

“If so, it could ignite fears of a disconnect between Fed policy and official data - a scenario we see as decidedly dollar-negative.”

Sterling awaits BoE meeting 

In Europe, EUR/USD edged higher to 1.1576, even after German industrial orders unexpectedly fell in June, declining for a second straight month, due to falling demand from abroad.

Orders were down by 1% on the previous month, much weaker than the expected rise of 1.0%. 

Eurozone retail sales are expected to rebound 0.4% on a monthly basis in June from the previous month’s drop of 0.7%, with the data due for release later in the session.

“EUR/USD remains almost entirely driven by the dollar leg, and we continue to see decent upside potential mostly on the back of the Fed’s dovish repricing rather than any supportive eurozone story,” said ING.

GBP/USD slipped slightly to 1.3295, trading in a tight range ahead of this week’s policy-setting meeting of the Bank of England.

The U.K.’s central bank is widely expected to cut its key interest rate to 4% from 4.25% on Thursday and to lower it once more before the end of the year, despite consumer price inflation rising to close to double the central bank’s 2% target in June.

Indian rupee stabilizes after RBI stands pat

Elsewhere, USD/JPY traded marginally higher to 147.66, following weaker-than-expected average cash earnings data for June, which pointed to sluggish wage growth, which could in turn herald some cooling in inflation. 

AUD/USD rose 0.4% to 0.6489, recovering further from a recent fall to one-month lows, while USD/CNY gained 0.1% to 7.1891, with focus on more U.S. tariffs against the country over Beijing’s continued buying of Russian oil.

USD/INR fell 0.1% to 87.697, after briefly surging to a record high over 88 rupees earlier this week.

The Indian currency saw some relief after the Reserve Bank of India (NSE:BOI) left interest rates unchanged at 5.50%, defying some market expectations that it would cut rates further. 

Expectations for a cut had stemmed from increasing headwinds for the Indian economy, especially from higher U.S. trade tariffs. 

The RBI has cut rates by a cumulative 1% so far in 2025.

U.S. President Donald Trump could use a new vacancy at the Federal Reserve to appoint his chosen successor to the central bank’s current Chair Jerome Powell, according to analysts at Wolfe Research.

Last week, Fed Governor Adriana Kugler, whose term was due to expire in January 2026, resigned earlier than had initially been anticipated.

Trump has since indicated that he plans to announce his pick to replace Kugler and carry out the rest of her term as soon as this week. Although the Senate -- which is currently on recess -- will not reconvene to approve the appointment until early September, analysts have noted that Trump could still fill the position temporarily.

"This is the one guaranteed vacancy that Trump has on the Fed Board of Governors, which raises the possibility that he will use it to put his intended successor to Powell on the board," the Wolfe Research analysts said in a note.

Speculation has swirled around Powell’s future, fueled in large part by Trump’s repeated attacks on the Fed leader.

Trump has called on the central bank to quickly lower interest rates to boost the economy, but Powell and other policymakers have continued to support a "wait-and-see" approach to future rate actions, citing uncertainty over the impact of the White House’s aggressive tariff agenda on inflation and employment.

Powell’s term is set to expire next May. Should Trump nominate his intended replacement before that date, he could be creating a so-called "shadow Fed Chair" that may undermine Powell’s leadership "sooner rather than later," the Wolfe analysts said.

"We started hearing about the concept of a shadow chair kicking around the Trump campaign policy apparatus last year, and eventually [Treasury Secretary Scott] Bessent, then advising candidate Trump and vying for the Treasury job, publicly put his name to the idea in October," the analysts wrote. "With Bessent publicly supportive of this idea, and Trump’s frustration with Powell only growing over time, we would guess he will welcome the chance to move early."

The strategists led by Tobin Marcus argued that they still expect National Economic Council Director Kevin Hassett to be Trump’s choice to replace Powell, particularly due to Hassett’s "academic expertise and reliable loyalty" to the White House. Other reported contenders include Bessent, former Fed Governor Kevin Warsh and current Fed member Christopher Waller.

"Any of these choices will have a similar import for the near-term rate path, as they’ll have clear marching orders

from Trump on rate cuts," the analysts wrote.

1. Futures higher

U.S. stock futures pointed higher on Monday following a sharp sell-off at the end of the prior week, as the prospect of lower interest rates helped to assuage worries over the U.S. economy.

By 03:00 ET (07:00 GMT), the Dow futures contract had risen by 128 points, or 0.3%, S&P 500 futures had climbed by 24 points, or 0.4%, and Nasdaq 100 futures had increased by 102 points, or 0.4%.

The main averages on Wall Street sank on Friday, with the benchmark S&P 500 in particular slipping to its worst day in more than two months. Weighing on sentiment were President Donald Trump’s announcement of elevated tariffs on a range of trading partners as well as a soft jobs report which featured heavy downward revisions that suggested a deeper slowdown in the American labor market than initally anticipated.

Trump added to the selling pressure after he dismissed the head of the statistics bureau charged with compiling the jobs data, arguing -- without evidence -- that the numbers were "rigged." Analysts flagged that the firing casts doubt over the longstanding reliability of U.S. economic data, with some noting concerns that Trump’s replacement could be more keen to please the White House than provide scrupulous figures.

Markets reacted to the July employment survey by ratcheting up their expectations for a Federal Reserve borrowing cost cut as soon as September, although media reports suggested that many Fed policymakers are not yet shifting their stance in an aggressively dovish direction, choosing instead to wait for further data to be released.

2. Earnings ahead

Also offering support to stocks has been a broadly solid corporate earnings season, which has helped to underline the staying power of a multi-year boom in enthusiasm around the applications of artificial intelligence.

Big-name tech companies like Facebook-owner Meta Platforms (NASDAQ:META) and software group Microsoft (NASDAQ:MSFT) have delivered blowout results in recent days and, perhaps more notably, backed their plans for massive capital expenditures on AI.

These statements have tamped down some lingering fears over the impact of Trump’s tariffs, although a selection of firms have begun to hint that price hikes could be coming in the months ahead.

Still, with more than half of the businesses in the S&P 500 having reported, year-on-year earnings growth for the second quarter is seen at 9.8%, compared with an estimated uptick of 5.8% on July 1, according to LSEG data cited by Reuters. More than 80% of the companies that have reported have topped analysts’ profit expectations, versus an average of 76% in the past four quarters.

This week, markets will be keeping an eye on earnings from the likes of economic bellwether Caterpillar (NYSE:CAT), burger titan McDonald’s (NYSE:MCD), and media giant Disney (NYSE:DIS). All of the firms are large members of the blue-chip Dow, which is now hovering just below its record high notched in December.

3. Berkshire Hathaway results

Berkshire Hathaway has posted a $3.76 billion write-down on its stake in consumer food company Kraft Heinz (NASDAQ:KHC), while a fall in insurance underwriting premiums also dented second-quarter returns from Warren Buffett’s sprawling conglomerate.

Along with tepid gains from common stocks such as American Express (NYSE:AXP) and Apple (NASDAQ:AAPL), the Kraft-Heinz write-down and premiums drop contributed to a steep decline in overall net profit to $12.37 billion from $30.35 billion in the same period a year ago. Revenue also fell by 1.2% to $92.5 bilion.

Still, Berkshire was boosted by an almost 20% jump in operating income at its BNSF unit that stemmed in large part from cost-cutting and lower fuel expenses.

Berkshire’s cash pile at the end of the second quarter stood at $344 billion, down slightly from $348 billion in the previous three-month period but near an all-time record high.

The earnings come as Berkshire looks ahead to the upcoming departure of the 94-year old Buffett. He will step down at the end of 2025 from his long-time post at the helm of a business that has turned him into a household name in financial markets, with current Vice Chair Greg Abel set to succeed him.

4. Crude steady despite OPEC+ production hike

Oil prices steadied Monday, even after a group of top producers agreed to another large production hike in September, adding to global supply.

At 03:10 ET, Brent futures slipped 0.2% to $69.80 a barrel, and U.S. West Texas Intermediate crude futures rose 0.3% to $67.53 a barrel.

The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September.

The move, in line with market expectations, marks a full and early reversal of OPEC+’s largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of world demand.

5. Spot gold price dips

Gold prices were mixed in early European trading on Monday, as investors booked some profits following a rise in the prior session fueled by expectations for Fed interest rate cuts.

Spot gold had fallen 0.2% to $3,355.69 an ounce, while gold futures for December gained 0.3% to $3,408.67/oz by 03:34 ET.

Gold prices jumped over 2% on Friday, after the weak jobs data sparked hopes for a Fed rate reduction in September. The rally in the yellow metal, which tends to do well in a lower-rate environment, helped carry it to a weekly gain after two straight weeks of declines.

Elsewhere, Bitcoin moved higher by 0.8% to $114,567.60, steadying after slipping by roughly 3% over the past five days.

Ahead of a much-anticipated August 1 deadline for his "reciprocal" duties to come into effect, Trump signed a proclamation on Thursday night lifting tariffs to as much as 50% on dozens of countries, as he steps up his drive to upend a global trading system he has described as unfair to U.S. interests. The levies are now set to activate at 12:01 am on August 7.

Major industrialized economies such as the European Union, Japan and South Korea will face duties of 15%, while other countries who run a trade surplus with the U.S. will be hit with tariffs of 10%.

Even higher tariffs are set to be slapped on other nations, including 50% levies on Brazil. Trump increased tariffs on Canada to 35% for goods that do not comply with the U.S.-Mexico-Canada Agreement, which was signed during Trump’s first term.

Meanwhile, Trump and Mexican counterpart Claudia Sheinbaum said Mexico was granted another 90-day reprieve to forge an agreement with Washington.

In a note, the Wolfe analysts estimated the aggregate tariff hike would amount to roughly $58 billion, below its prior projection of $85 billion, due largely to additional deals with countries notched this week.

"The incremental easing from deals with South Korea et al. was partially offset by higher tariffs on India, Taiwan, and some other countries not covered by Trump’s letters," the strategists wrote.

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Meanwhile, the anticipated total effective U.S. tariff rate of 16.1% could rise further when separate sector-specific levies on semiconductors and pharmaceuticals roll out in the weeks ahead, the analysts suggested.

1. Futures rise

U.S. stock futures ripped higher on Thursday, fueled in part by blockbuster tech earnings that helped temper indications from the Federal Reserve that a September interest rate reduction may not be coming.

By 03:43 ET (07:43 GMT), the Dow futures contract had jumped by 171 points, or 0.4%, S&P 500 futures had gained 64 points, or 1.0%, and Nasdaq 100 futures surged by 330 points, or 1.4%.

The main averages on Wall Street were mixed at the end of trading on Thursday, as investors assessed the Fed’s decision to leave rates unchanged after its latest gathering and commentary around future policy actions (more below).

Sentiment had been bolstered prior to the Fed’s announcement by a stronger-than-anticipated reading of second-quarter U.S. economic activity, thanks largely to a slide in imports. However, final sales to private domestic purchasers, a metric which economists and policymakers alike view as a gauge of underlying economic growth, rose by 1.2% -- the slowest uptick in domestic demand since the fourth quarter of 2022.

Still, a separate measure of private payrolls came in ahead of expectations, suggesting some resilience in the jobs market. More labor data is due out this week, including the all-important nonfarm payrolls report for July on Friday.

Solid returns from a selection of consumer-facing companies also helped to underline the relative strength of the American consumer.

2. U.S.-South Korea trade deal

The U.S. and South Korea have agreed to a trade deal that will see Washington slap a 15% tariff on imports from the country, lower than a previously-threatened rate of 25%, according to President Trump.

It is the latest in a string of trade pacts issued by the White House in recent days and comes shortly before a self-imposed August 1 deadline for the implementation of heightened "reciprocal" levies.

Trump made the announcement following a meeting with officials from South Korea, a major trading partner with the U.S. that exports key goods like semiconductor technology and cars.

Seoul also pledged to invest $350 billion in specific U.S. projects selected by Trump and purchase another $100 billion in energy items, Trump said, echoing a prior pact made with the European Union last weekend.

Yet, as it has been with many recent trade agreements, many of the details of the deal with South Korea remain unclear -- specifically the structure of Seoul’s financing, when the funds would be delivered and how much of the terms are binding in nature.

In a note, analysts at Capital Economics added that there are also questions around the treatment of electronics and pharmaceuticals exports from South Korea once sector-specific tariffs are unveiled.

3. Fed decision

The Fed kept its key policy rate steady at a range of 4.25% to 4.5%, in line with widely-held expectations, with the central bank citing a "low" unemployment rate, "solid" labor market conditions and "somewhat elevated" inflation.

Wednesday’s decision came as Fed Chair Jerome Powell has been facing intensifying pressure from Trump to sharply and quickly ratchet down borrowing costs to help boost economic activity.

Even with Trump frequently criticising his leadership and hinting at dismissing him before the end of his tenure next year, Powell has been broadly consistent in his backing of a more cautious, wait-and-see approach to policy actions, due partly to uncertainty around the murky implications of Trump’s aggressive tariff actions.

Powell did not seem to stray too far from this stance in his latest comments, noting that it was too soon to say if the Fed will cut rates at its next gathering in September. He added that policy is modestly restrictive and not reining in the wider economy.

Yet there was dissent within Fed rate-setters to Powell, with Governors Christopher Waller and Michelle Bowman -- both Trump appointees -- voting for a 25-basis point rate reduction this month. The officials pointed to worries over a slowing labor market as evidence for a cut.

Outside of the U.S., the Fed was not alone in its decision to leave rates unchanged in recent hours. The Bank of Canada stood pat on its policy rate on Wednesday, as did the Bank of Japan on Thursday.

4. Meta reports

Shares in Meta Platforms soared in extended hours trading after strength in the Facebook-owner’s crucial advertising business powered better-than-anticipated sales in the April-to-June period and raised hopes that the company’s artificial intelligence investments are beginning to bear fruit.

Sales jumped by 22% during the second quarter to $47.5 billion, while net income came in at $18.3 billion, both topping Wall Street projections. Analysts at Vital Knowledge said Meta’s top-line results were underpinned by an 11% uptick in ad impressions as well as a 9% increase in ad pricing.

For the current quarter, Meta anticipates that revenue will rise by 17% to 24% versus a year earlier, although it flagged that a difficult annual comparison could lead to slower sales growth in the fourth quarter.

Meta, who, like many of its Big Tech peers, has laid out plans to spend heavily on AI, kept its capital expenditures outlook largely unchanged at $66 billion to $72 billion, compared with $64 billion to $72 billion previously, and implied that 2026 capex will be around $100 billion. Analysts have estimated next year’s figure will stand at $80 billion.

A spike in depreciation and higher compensation could also contribute to "meaningful upward pressure" on 2026 operating expenses, Meta executives warned.

"Bottom line: the Meta report is extremely robust, and the only negative takeaway is the warning management issues about 2026 costs," the Vital Knowledge analysts said.

5. Microsoft earnings

AI played a major role in results from Microsoft as well, with the nascent technology supercharging performance at the software giant’s cloud computing division.

Fiscal fourth-quarter revenue at the unit, known as Azure, jumped by 39%, outpacing expectations and fueling group-wide sales of $76.4 billion.

On a net basis, profit came in at $27.2 billion, or $3.65 per diluted share -- also surpassing estimates.

Executives indicated that Microsoft expects to continue to shell out more and more cash on AI, as it looks to rapidly build up the data centers that undergird these models. CFO Amy Hood said Microsoft is forecasting capital spending of over $30 billion in its first quarter -- after having registered a 27% year-over-year rise in capex to $24.2 billion in the prior period.

Shares in Microsoft, which have already surged by more than 22% so far this year, were higher by over 8% in after-hours dealmaking.

Meta and Microsoft were the latest members of the so-called "Magnificent Seven" group of mega-cap tech stocks to report their quarterly earnings. Further results are due out after the closing bell on Thursday from iPhone-maker Apple (NASDAQ:AAPL) and e-commerce titan Amazon (NASDAQ:AMZN)

1. Futures tick up

U.S. stock futures pointed higher on Wednesday, as investors prepared for a pivotal wave of central bank decisions and major corporate earnings.

By 03:43 ET (07:43 GMT), the Dow futures contract were mostly unchanged, S&P 500 had gained 6 points, or 0.1%, and Nasdaq 100 futures had risen by 47 points, or 0.2%.

The main averages slipped on Tuesday, with the benchmark S&P 500 and tech-heavy Nasdaq Composite backing away from recent record highs.

Drugmaker Merck (NSE:PROR), health insurer UnitedHealth (NYSE:UNH) and jetmaker Boeing (NYSE:BA) were among some of the Dow components to fall after unveiling their latest quarterly results. United Parcel Service (NYSE:UPS) also tumbled by more than 10%. The package deliverer once again declined to lay out annual revenue and margin forecasts, exacerbating worries around the impact of often erratic U.S. trade policy on the group’s performance.

Meanwhile, Procter & Gamble (NYSE:PG) dropped on lower-than-anticipated annual guidance, while the consumer goods giant flagged that it will soon have to raise prices on some of its products to counterbalance the effect of tariffs. The levies also played a part in appliance maker Whirlpool’s (NYSE:WHR) move to slash its full-year outlook, sending shares down by over 13%.

2. No major breakthrough after U.S.-China trade talks

A fresh round of trade negotiations in Sweden between the U.S. and China failed to result in a major breakthrough following two days of talks.

But both sides described their discussions, which were aiming to help soothe possibly damaging tensions by seeking an extension to their ongoing 90-day trade truce, as constructive.

U.S. Treasury Secretary Scott Bessent seemed to indicate that the continuation would not be rejected, telling reporters after the meetings: "It’s just that we haven’t given the signoff." U.S. officials added that the move to extend the truce, which is due to expire on August 12, ultimately falls to President Trump. Should he decide not to pursue an extension, U.S. duties on China could snap back to triple-digit rates.

Trade talks have been a key focus of the Trump administration in recent days, most notably with the president notching a framework deal with the European Union on Sunday. On Tuesday, Trump said an agreement with India has yet to be finalized after Reuters reported that India is preparing to accept higher levies of 20% to 25% on its exports to the United States.

Still, pacts with a host of other countries have yet to be secured, and an August 1 deadline for Trump’s elevated "reciprocal" tariffs to come into effect is now mere days away.

3. Fed decision looms large

Much of the attention now turns to the Federal Reserve, which is widely tipped to leave interest rates unchanged at the conclusion of its latest two-day meeting on Wednesday.

Many Fed officials have recently indicated that a more cautious approach to future rate actions is warranted, citing a desire to see how Trump’s aggressive tariff policies impact the wider economy.

Fears have surrounded the possible implications of the levies, particularly their potential to drive up inflation and weigh on broader growth. Price gains have proven to be so far relatively tepid and activity has been resilient, although worries remain that business will be increasingly passing more costs on to consumers in the coming months.

Against this backdrop, the Fed has recently opted to keep borrowing costs steady at a range of 4.25% to 4.5%. This stance -- and Chair Jerome Powell’s public defense of it -- has drawn the ire of Trump, who has called on the Fed to quickly ratchet down rates to help boost growth.

4. Data incoming

More data is inbound this week that could provide further insight into the state of the American economy.

On Wednesday, traders will have the chance to parse through the first reading of second-quarter gross domestic product. Economists anticipate that the world’s biggest economy will return to growth of 2.5% during the April to June period, following a contraction of 0.5% in the first quarter.

A monthly reading of private payrolls is also tipped to rise by 77,000 in July after sliding by 33,000 in the previous month. The numbers from ADP will serve as a precursor to the all-important nonfarm payrolls reading due out on Friday.

Traders have also been digesting figures which showed an uptick in consumer confidence this month, but a measure of U.S. job openings and hiring decreased, suggesting some slowing in the labor market.

5. Microsoft, Meta earnings ahead

A busy earnings docket will be highlighted on Wednesday by this week’s first batch of results from key members of the so-called "Magnificent Seven" group of mega-cap tech stocks.

Software titan Microsoft’s artificial intelligence plans will be under heavy scrutiny, particularly after partner OpenAI recently utilized cloud services offered by rivals like Google (NASDAQ:GOOGL), CoreWeave, and Oracle (NYSE:ORCL). ChatGPT-maker OpenAI has powered growth in Microsoft’s Azure cloud unit, helping the wider company become one of the major winners of a boom in enthusiasm around the applications of AI.

The nascent technology will likely be at the forefront of analysts’ minds as they also consider returns from Facebook-owner Meta Platforms. CEO Mark Zuckerberg has targeted massive spending on AI as a pillar of its future strategy, with the firm aiming to spend roughly $55 billion on building new AI data centers in the last three quarters of the 2025 calendar year. How Meta and Zuckerberg plan to monetize these investments remains a key focus for investors.

Microsoft and Meta’s earnings after the bell are slated to be accompanied by returns from other names, including chip designer Arm Holdings (NASDAQ:ARM) and trading platform Robinhood Markets (NASDAQ:HOOD).

U.S.-China trade talks

The deal was the latest in a flurry of pacts the White House has raced to secure before August 1, when heightened "reciprocal" tariffs on a host of countries are due to come into effect.

"In terms of big trade deals yet to be secured, the market will still be on the lookout for deals with Asia (South Korea, Taiwan, India) and perhaps anything new for Mexico and Canada, too," ING analysts said in a note.

With this in mind, the U.S. and China are expected to continue their latest round of trade talks in Sweden on Tuesday, with Beijing facing an August 12 deadline to reach a longer-lasting tariff agreement with Washington.

Both sides had previously agreed on preliminary trade pacts earlier this year which cooled an intensifying trade war marked by rapidly escalating tit-for-tat tariffs and the squeezing-off of crucial rare earth minerals exports.

Fed meeting starts

The Fed kicks off its two-day policy meeting later in the session. While rates are expected to stay at 4.25%–4.5% when the announcement is made on Wednesday, investors will watch closely for signals on a possible cut later this year.

Fed chair Jerome Powell has recommended a wait-and-see attitude as the policymakers await more clarity around the impact of the Trump administration’s aggressive tariff agenda, but there have been signs of dissent within the FOMC, with a couple of members recently calling for lower rates.

U.S. President Donald Trump on Monday again called on the Federal Reserve to cut interest rates, saying it would help propel the U.S. economy. 

The Bank of Japan also holds a key meeting on Thursday, where it is expected to keep rates unchanged.

Tariffs and their inflation impact will be in focus Thursday with the release of June’s PCE price index, the Fed’s preferred inflation gauge.

Investors will also watch key labor data this week, including JOLTS Job Openings later in the session, ADP private payrolls on Wednesday, jobless claims on Thursday, and the key July jobs report on Friday.

"Magnificent Seven" earnings due

Investors are also gearing up for the busiest week of the earnings season, with more than 150 companies in the S&P 500 due to post their quarterly results.

This includes “Magnificent Seven” members, Facebook-owner Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.

Prior to Tuesday’s opening bell on Wall Street, numbers are expected to be released from a host of firms, including drugmaker Merck (NYSE:MRK), healthcare giant Unitedhealth (NYSE:UNH) and jetmaker Boeing (NYSE:BA). Consumer goods titan Procter & Gamble (NYSE:PG), which announced the departure of CEO Jon Moeller on Monday, is also slated to report.

Visa (NYSE:V) will highlight the docket of returns after U.S. markets close. 

Crude rises once more

Oil prices rose Tuesday ahead of the start of the latest Fed meeting in the aftermath of the trade agreement between the U.S. and the European Union.

At 05:55 ET, Brent futures gained 0.6% to $69.74 a barrel, and U.S. West Texas Intermediate crude futures traded 0.7% higher to $67.19 a barrel.

Both contracts settled more than 2% higher in the previous session, with Brent touching its highest level since July 18, after the U.S./EU deal sidestepped a full-blown trade war between the two major allies that would have dimmed the outlook for fuel demand.

The agreement also calls for $750 billion of EU purchases of U.S. energy in the coming years.