September S&P 500 E-Mini futures (ESU25) are up +0.27%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.28% this morning, pointing to a higher open on Wall Street, while investors await more news on trade talks, a fresh batch of U.S. economic data, and a slew of corporate earnings reports, with a particular focus on results from “Magnificent Seven” stalwarts Tesla and Alphabet.
U.S. equity futures drew support from falling Treasury yields, which extended their drop to a fourth day.
In Friday’s trading session, Wall Street’s major equity averages closed mixed. Health insurance stocks retreated, with Molina Healthcare (MOH) plunging over -10% to lead losers in the S&P 500 and Elevance Health (ELV) sliding more than -8%. Also, Netflix (NFLX) slumped over -5% even after the streaming giant reported stronger-than-expected Q2 results and raised its full-year revenue guidance. In addition, Sarepta Therapeutics (SRPT) plummeted more than -35% after the company said another patient had died from acute liver failure following treatment with one of its experimental gene therapies for a muscle disease. On the bullish side, Invesco Ltd. (IVZ) surged over +15% and was the top percentage gainer on the S&P 500 after the investment management firm proposed changing the structure of its QQQ exchange-traded fund.
Economic data released on Friday showed that the University of Michigan’s preliminary U.S. consumer sentiment index rose to a 5-month high of 61.8 in July, stronger than expectations of 61.4. Also, the University of Michigan’s U.S. July year-ahead inflation expectations fell to a 5-month low of 4.4%, better than expectations of no change at 5.0%, while 5-year implied inflation expectations fell to a 5-month low of 3.6%, better than expectations of 3.9%. In addition, U.S. June housing starts rose +4.6% m/m to 1.321M, stronger than expectations of 1.290M, while building permits, a proxy for future construction, unexpectedly rose +0.2% m/m to 1.397M, stronger than expectations of 1.390M.
Fed Governor Christopher Waller said in a Bloomberg TV interview on Friday that he sees no evidence of rising inflation expectations, which gives the Fed room to proceed with rate cuts. He also reiterated that the central bank should lower rates when policymakers meet later this month, citing data indicating the U.S. labor market is “on the edge.”
Meanwhile, U.S. rate futures have priced in a 95.3% chance of no rate change and a 4.7% chance of a 25 basis point rate cut at next week’s monetary policy meeting.
Second-quarter corporate earnings season kicks into high gear this week, with investors awaiting fresh reports from major companies such as Tesla (TSLA), Alphabet (GOOGL), Intel (INTC), ServiceNow (NOW), International Business Machines (IBM), NXP Semiconductors N.V. (NXPI), Coca-Cola (KO), AT&T (T), Verizon (VZ), General Motors (GM), Blackstone (BX), American Airlines (AAL), Southwest Airlines (LUV), Philip Morris International (PM), Chipotle (CMG), Union Pacific (UNP), Honeywell (HON), and Phillips 66 (PSX). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +3.2% increase in quarterly earnings for Q2 compared to the previous year, slightly above the pre-season forecast of +2.8%.
Market watchers will also closely monitor preliminary purchasing managers’ surveys on U.S. manufacturing and services sector activity for July for any signs of how President Trump’s tariff policies are affecting the economy. Other noteworthy data releases include U.S. Existing Home Sales, Initial Jobless Claims, the Richmond Fed Manufacturing Index, New Home Sales, Durable Goods Orders, and Core Durable Goods Orders.
“As the final shape of the U.S. tariff regime is still up in the air, the recent moderate inflation trend has apparently not helped to reduce uncertainty about the ultimate impact of Trump’s trade policy on inflation,” said ABN Amro analysts.
In addition, investors will continue to await any updates on U.S. tariff agreements with other countries ahead of the August 1st deadline, when reciprocal tariffs are set to take effect. U.S. President Donald Trump said he’s close to announcing a couple of “big” trade deals.
U.S. central bankers are in a media blackout period before the July 29-30 policy meeting, though Fed Chair Jerome Powell is scheduled to deliver opening remarks on Tuesday at a conference focused on capital frameworks for large banks.
Today, investors will focus on the Conference Board’s Leading Economic Index for the U.S., which is set to be released in a couple of hours. Economists expect the June figure to be -0.2% m/m, compared to the previous number of -0.1% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.381%, down -1.13%.
The Euro Stoxx 50 Index is down -0.41% this morning as investors digest a mixed bag of corporate earnings, while uncertainty surrounding trade tariffs between the European Union and the U.S. remains elevated. Bank and automobile stocks lost ground on Monday, while mining stocks outperformed. A European Central Bank survey released on Monday showed that Eurozone companies remain confident in their growth outlook but are also facing profit pressures, partly due to trade tensions. Meanwhile, investors continue to monitor developments in the crucial trade negotiations between the U.S. and the EU. U.S. Commerce Secretary Howard Lutnick said on Sunday he remains confident that Washington can secure a trade deal with the EU, but emphasized that August 1st is a firm deadline for the tariffs to take effect. The Financial Times reported on Friday that President Trump is advocating for a minimum tariff of 15%-20% in any agreement with the EU. At the same time, EU envoys are scheduled to meet as early as this week to formulate a plan for potential countermeasures in the event of a no-deal scenario with the U.S. Investor focus this week is also on the ECB’s rate-setting meeting. The central bank is widely expected to keep the deposit rate unchanged at 2.00% on Thursday following seven straight cuts. Market participants will be watching for any hints on when it might lower interest rates again, though analysts said the central bank will likely seek to avoid sending signals about the September meeting. In corporate news, Stellantis NV (STLAP.FP) fell over -2% after the automaker said it expects a net loss of 2.3 billion euros ($2.7 billion) for the first half of the year. At the same time, Ryanair Holdings Plc (RYA.I.DX) climbed more than +6% after Europe’s largest low-cost carrier posted stronger-than-expected FQ1 net profit.
The European economic data slate is empty on Monday.
China’s Shanghai Composite Index (SHCOMP) closed up +0.72%, while Japan’s financial markets were closed for a holiday.
China’s Shanghai Composite Index closed higher today, hitting an almost 3-1/2-year high. Construction stocks led the gains on Monday after China began construction of a $170 billion hydropower dam in Tibet. Also, rare earth stocks jumped after Reuters reported that Beijing had quietly issued its first 2025 quotas for rare earth mining and smelting. Adding to the positive sentiment, China’s industry ministry vowed to stabilize growth in key sectors, including machinery, autos, and electrical equipment, as part of a comprehensive plan spanning 10 industries. Meanwhile, China held benchmark lending rates steady on Monday, a widely expected move following the release of slightly better-than-expected second-quarter economic data. The one-year loan prime rate, which guides most corporate and household lending, was kept at 3.0%, while the five-year rate, a benchmark for mortgage rates, remained at 3.5%, according to the People’s Bank of China. In other news, China confirmed on Monday that it will host a high-level summit with the European Union in Beijing this week, commemorating 50 years of diplomatic relations as both sides seek to navigate trade tensions amid broader global trade uncertainties. In corporate news, platform companies Meituan, JD.com, and Alibaba gained between +1.8% and +2.8% in Hong Kong after Beijing summoned the trio and urged them to ease an intense price war as part of its ongoing “anti-involution” campaign. Investors now look ahead to the July Politburo meeting, expected to take place in the coming days, where policymakers will deliberate on economic policies for the second half of the year. Goldman Sachs economists stated that Beijing is unlikely to roll out broad-based stimulus in the near term, as real GDP growth in the first half surpassed this year’s “around 5%” target. Policymakers are likely to reaffirm their commitment to boosting domestic demand and stabilizing exports, employment, and the property market.
Japan’s Nikkei 225 Stock Index was closed today for the Marine Day holiday. The markets will reopen on Tuesday.
Pre-Market U.S. Stock Movers
Tesla (TSLA) rose more than +1% in pre-market trading after CEO Elon Musk tweeted Saturday that he was “back to working 7 days a week and sleeping in the office if my little kids are away.”
Block (XYZ) surged over +9% in pre-market trading after S&P Dow Jones Indices announced that the stock would be added to the S&P 500 index on Wednesday, July 23rd.
Pinterest (PINS) climbed more than +4% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $45.
Verizon (VZ) gained over +4% in pre-market trading after the carrier posted upbeat Q2 results and raised its full-year profit outlook.
Sarepta Therapeutics (SRPT) plunged more than -10% in pre-market trading after the company declined a Food and Drug Administration request to halt sales of a drug linked to three deaths. Also, Mizuho and Needham downgraded the stock.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - July 21st
Verizon (VZ), Roper Technologies (ROP), NXP Semiconductors N.V. (NXPI), WR Berkley (WRB), Steel Dynamics (STLD), Domino’s Pizza (DPZ), Alexandria RE (ARE), Crown (CCK), Equity Lifestyle (ELS), AGNC Invest (AGNC), Wintrust (WTFC), Medpace Holdings (MEDP), Zions (ZION), BOK Financial (BOKF), RLI (RLI), Cleveland-Cliffs (CLF), ServisFirst Bancshares (SFBS), Calix (CALX), Agilysys (AGYS), Dynex Capital (DX), Preferred Bank (PFBC), Hbt Fin (HBT), TrustCo Bank NY (TRST), SmartFinancial Inc (SMBK), Washington Trust (WASH), Home Bancorp (HBCP), RBB Bancorp (RBB), Health In Tech (HIT).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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