TLDR
- Stock futures rise ahead of key U.S. inflation data release on Tuesday that could influence Federal Reserve rate decisions
- U.S.-China trade truce deadline expires Tuesday, though White House officials expect an extension
- Trump and Putin scheduled to meet in Alaska on Friday to discuss ending Ukraine war
- Nvidia and AMD reportedly agreed to give U.S. government 15% of revenue from China chip sales
- Markets pricing in 90% probability of September Fed rate cut despite potential tariff-driven inflation
Stock markets opened higher on Monday as investors prepare for a week filled with crucial economic data and geopolitical developments. Dow Jones futures gained 104 points while S&P 500 futures rose 0.1%.
The primary focus centers on Tuesday’s consumer price index data for July. Analysts expect core inflation to accelerate to 0.340% month-over-month from June’s 0.228%.
Nomura analysts forecast tariffs will continue pushing up goods prices. Business surveys point to increasing price pressures across multiple sectors.
The inflation report comes as markets price in a 90% probability of a September Federal Reserve rate cut. Treasury yields have fallen in anticipation, with the 10-year note at 4.274%.
A Tuesday deadline looms for the U.S.-China trade truce to expire. However, White House officials previously indicated an extension remains likely.
Trade and Geopolitical Tensions
President Trump imposed tariffs on dozens of countries last week. Several governments continue seeking negotiations over these new levies.
The week’s geopolitical highlight involves Trump and Russian President Vladimir Putin meeting in Alaska on Friday. They plan to discuss ending the Ukraine war.
Oil prices slipped on speculation that potential progress in Ukraine talks could eventually ease sanctions on Russian oil exports. Gold fell 1.1% after reports of possible 39% tariffs on Swiss gold bars.
Nvidia faced pressure from reports that it and AMD agreed to give the U.S. government 15% of revenues from China chip sales. This arrangement helps them obtain export licenses for semiconductors.
Market Performance and Outlook
Europe’s STOXX 600 index rose 0.3% while Asia-Pacific stocks gained 0.2%. MSCI’s world share index sits just 0.2% from its all-time high reached in late July.
Strong U.S. earnings season supports overall market sentiment. Investors largely overlooked soft July jobs data that emerged last week.
Chinese consumer price inflation ticked up in July, but producer prices continued falling. The country’s manufacturing sector continues exporting deflation globally.
Additional economic data includes Thursday’s producer price index and Friday’s University of Michigan consumer sentiment reading. These reports will influence the Fed’s September interest rate decision.
Currency markets remained quiet with the euro at $1.1651 and the dollar at 147.38 yen. The Australian dollar eased ahead of an expected Reserve Bank rate cut.
CoreWeave reports earnings Tuesday while Cisco Systems follows Wednesday, both relevant to artificial intelligence investment trends. Markets continue grinding back toward late July peaks despite ongoing trade uncertainties.
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