US stock futures rose sharply on Monday, reflecting positive sentiment ahead of a much-anticipated meeting between President Trump and Chinese President Xi later this week regarding a potential trade deal. Dow Jones Industrial Average futures climbed about 0.5%, translating to an increase of approximately 200 points, while S&P 500 contracts surged by 0.8%. Leading the gains, the Nasdaq 100 futures rose by 1.3%, driven by the ongoing enthusiasm in tech stocks.
Wall Street’s optimism is fueled by a key week ahead, featuring the Federal Reserve’s interest rate decision alongside numerous earnings reports from major technology companies. This comes on the heels of a recent week in which all three major indexes achieved all-time highs. Attention has shifted as U.S. and Chinese officials indicated that discussions over the weekend laid the groundwork for a potential breakthrough in the ongoing trade conflict.
Treasury Secretary Scott Bessent expressed confidence, stating, “I think we have a very successful framework for the leaders to discuss on Thursday.” In parallel, Beijing announced a “preliminary consensus” on resolving critical issues, alleviating some anxiety brought on by recent escalations in trade tensions. President Trump voiced optimism while en route to Japan, asserting his respect for President Xi and anticipating a deal from their discussions.
In addition to trade talks, market participants expect the Federal Reserve to announce a rate cut on Wednesday, following the release of cooler-than-anticipated inflation data last week. This context adds further significance to the Fed meeting, suggesting a potential easing policy could be on the horizon.
This crucial week also features the anticipated quarterly earnings reports from what is referred to as the “Magnificent Seven” tech giants. Microsoft, Alphabet, and Meta are all scheduled to report their third-quarter results on Wednesday, while Apple and Amazon will follow a day later.
In premarket trading, Keurig Dr Pepper Inc. saw its stock rise by 5% after the company raised its full-year outlook, now forecasting fiscal 2025 constant currency net sales growth in the high-single-digit range. Similarly, GameStop stock jumped 6% as the company continues to benefit from the ongoing meme stock trend.
Conversely, U.S. rare earth stocks experienced a downturn following Secretary Bessent’s comments indicating a delay in China’s export restrictions on these materials. Shares of USA Rare Earth fell by 6% in premarket trading, with Trilogy Metals and MP Materials also showing declines.
In notable merger news, Novartis announced its acquisition of Avidity Biosciences for approximately $12 billion, aimed at enhancing its treatment portfolio for rare muscle disorders. Following this announcement, Avidity’s stock surged over 40% in premarket trading.
On the global front, Asian shares also rallied, with Japan’s Nikkei index surpassing the 50,000 mark, and gold prices continued to decline, attributed to decreased demand for safe-haven assets following the improving trade outlook between the U.S. and China.
