Goldman Sachs expects Nvidia ’beat and raise,’ lifts price target to $240
Investing.com - U.S. stock futures tick up with a slew of major earnings and central bank announcements due out later this week. Progress in trade talks between the United States and China have further bolstered the upbeat sentiment, with officials on both sides saying they have forged a framework deal prior to a long-awaited meeting between the countries’ leaders. Elsewhere, U.S. President Donald Trump suggests a pick to replace current Federal Reserve Chair Jerome Powell will be unveiled before the end of the year.
1. Futures rise
U.S. stock futures pointed higher on Monday ahead of a busy week that will feature earnings reports from mega-cap technology companies and a flurry of central bank decisions around the world, including the Fed.
By 03:58 ET (07:58 GMT), the Dow futures contract had gained 323 points, or 0.7%, S&P 500 futures had risen by 58 points, or 0.9%, and Nasdaq 100 futures had increased by 285 points, or 1.1%.
All three of the main stock exchanges posted record closing highs on Friday, fueled by cooler-than-anticipated inflation data, which reinforced expectations that the Fed will opt to slash interest rates at its two-day meeting starting on Tuesday. There is also over a 95% chance that rates will be brought down yet again at the central bank’s last gathering of the year in December, CME’s FedWatch Tool showed.
Meanwhile, corporate results have been broadly positive, helping to give some clarity to the state of the U.S. economy during a time when a prolonged federal government shutdown has deprived investors and policymakers of most fresh indicators.
Analysts now estimate that third-quarter earnings from S&P 500 companies will rise by 10.4% versus a year ago in aggregate, up from projections of 8.8% at the beginning of October, according to LSEG data cited by Reuters.
2. Framework trade deal announced
Further bolstering sentiment were hopes for an imminent trade agreement between the United States and China.
On Sunday, trade negotiators from both sides said they had arrived at a framework deal on tariffs and other issues prior to the much-hyped face-to-face meeting of Trump and Chinese counterpart Xi Jinping in South Korea on Thursday.
Speaking to reporters in Malaysia, U.S. trade representative Jamieson Greer revealed that the talks were approaching a stage where the "final details" would be worked out and possibly presented to Trump and Xi.
Li Chenggang, China’s lead negotiator, said a "preliminary consensus" had been notched following a round of "candid and in-depth discussions."
Tensions over trade have been ratcheting up in recent weeks, sparked by Trump’s threat to impose triple-digit levies on China in retaliation for Beijing’s announcement of stricter limits on American access to rare earth minerals critical in a variety of industries. But U.S. Treasury Scott Bessent suggested in an interview with ABC’s "This Week" program that he thinks the tariffs "will be averted" and China is willing to make "concessions" on its rare earth minerals export controls.
3. Trump says he may make new Fed chair decision by year-end
Beyond trade, Trump said he could reveal his pick to be the next Fed chair by the end of the year.
The president has long dropped hints at his selection to replace the current official at the helm of the central bank, Jerome Powell. Despite being nominated by Trump in late 2017 and assuming the role in February 2018, Powell has drawn the consistent ire of the White House over the Fed’s cautious approach to monetary policy throughout much of this year.
Trump has instead called on Powell and the Fed to aggressively and rapidly lower interest rates in order to help support the wider economy.
Bessent said that the Trump administration is planning to present a "good slate" of replacements for Powell "right after Thanksgiving." The pool of candidates now includes White House aide Kevin Hassett, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, Fed Vice Chair for Supervision Michelle Bowman and BlackRock executive Rick Rieder, Bessent noted.
Powell’s term as chair is set to expire in May 2026, although he can still choose to remain a Fed Governor until 2028. Should he do so, Trump would need to name a current Fed governor as his successor.
4. Keurig Dr. Pepper earnings kick off flurry of major reports this week
Keurig Dr. Pepper is set to be the opener for a parade of high-profile corporate earnings reports this week.
Bloomberg consensus estimates see the Snapple maker posting adjusted third-quarter profit per share of $0.54 on net sales of $4.15 billion.
Investors will be hunting for any fresh guidance from the beverage group, especially after rivals PepsiCo and Coca-Cola forecasted a benefit to revenue and income from a weaker dollar.
Quarterly numbers from Pepsi and Coca-Cola also displayed broad resilience in the face of a consumer spending outlook that has been made murkier by Trump’s shifting trade policies. Trump’s move to slap an additional 10% tariff on Canadian goods on Saturday over his displeasure with a television advertisement sponsored by the Ontario government may present risks to Keurig Dr. Pepper’s operations in the country as well.
Later this week, markets will be homing in on returns from large-cap tech firms which have driven much of the broader stoc market this year. Google-owner Alphabet, Facebook-parent Meta Platforms and software giant Microsoft are expected to report after the closing bell on Wednesday, followed by iPhone-maker Apple and e-commerce titan Amazon on Thursday.
5. Gold slumps amid trade talks progress
Gold prices slid, extending losses from last week as easing U.S.-China trade tensions eroded bullion’s safe-haven demand.
Still, losses in gold were capped by expectations that the Fed will cut interest rates by a quarter of a percentage point in the coming days. Non-yielding bullion tends to perform better in low-rate environments.
Spot gold slipped 1.3% to $4,060.80 per ounce by 00:44 ET, while U.S. gold futures declined 1.6% to $4,072.60/oz.
The precious metal snapped a nine-week winning streak last week as traders took profits following record highs above $4,300/oz which were fueled by geopolitical concerns and expectations of monetary easing.