U.S. may expand Nvidia and AMD’s 15% China chips deal to other companies
Investing.com - U.S. stock futures tick up ahead of a week filled with key earnings from S&P 500 companies. Verizon (NYSE:VZ) is due to highlight the earnings slate on Monday, followed by tech titans like Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA) later in the week. Parliamentary elections in Japan cast some doubt over crucial trade talks between the country and the United States, while the Wall Street Journal reports that the European Union is preparing new countermeasures against American firms should negotiations between the bloc and Washington fail to result in a deal before an impending tariff deadline.
1. Futures higher
U.S. stock futures pointed higher on Monday, as investors geared up for a parade of corporate earnings this week.
By 03:38 ET (07:38 GMT), the Dow futures contract had gained 118 points, or 0.3%, S&P 500 futures had risen by 15 points, or 0.2%, and Nasdaq 100 futures had advanced by 61 points, or 0.3%.
The main indices on Wall Street finished the previous session in muted fashion, with the blue-chip Dow Jones Industrial Average slipping by 0.3% and the benchmark S&P 500 and tech-heavy Nasdaq Composite broadly flat.
Weighing on sentiment was a media report that the Trump administration was considering placing a minimum tariff of 15% to 20% on the European Union, above the current baseline rate of 10%. Elsewhere, data showed that American consumer sentiment brightened in July, even as worries remained around the prospect of possible tariff-driven inflationary pressures emerging.
President Donald Trump’s aggressive trade agenda was one of the major themes dominating the accelerating stream of second-quarter company results. Yet, despite a somewhat murky outlook for the rest of 2025, earnings from more than 80% of the firms who have reported so far have topped analysts’ expectations.
Cryptocurrency stocks, meanwhile, climbed, fueled by the passage in the U.S. House of Representatives of a bill developing a regulatory framework for the digital coin industry. Coinbase Global (NASDAQ:COIN) rose by 2.2% and Robinhood Markets (NASDAQ:HOOD) added 4.1%.
2. Verizon to report; earnings deluge ahead this week
The pace of the quarterly earnings season picks up in the coming days, with over 85% of S&P 500 companies yet to post returns.
On Monday, telecommunications group Verizon will headline the slate of results before the opening bell, while chipmaker NXP Semiconductors (NASDAQ:NXPI) is expected to highlight a string of reports after the close.
Texas Instruments (NASDAQ:TXN) and Coca-Cola (NYSE:KO) are scheduled to report on Tuesday, followed by Google-owner Alphabet and electric car manufacturer Tesla on Wednesday. Intel (NASDAQ:INTC), Union Pacific (NYSE:UNP) and Honeywell International (NASDAQ:HON) are also due to open their books on Thursday, and Phillips 66 (NYSE:PSX) and AutoNation (NYSE:AN) will be among the names rounding out the week on Friday.
Roughly 12% of the S&P 500 has reported during the young earnings season. Of those, 86% have beat their per-share earnings expectations and 67% have delivered higher-than-anticipated sales.
Some investors have flagged that the relative early strength of the reporting period could lead to increasingly heightened expectations for incoming earnings. However, the start has still been broadly positive, even as businesses deal with an uncertain economic landscape marked by concerns over the impact of global trade tensions.
3. Japanese parliamentary elections in focus
A coalition led by Japanese Prime Minister Shigeru Ishiba’s ruling party is set to lose its majority in the upper house, public broadcaster NHK reported on Monday, casting fresh doubts over the trajectory of trade talks with the United States.
Exit polls showed Ishiba’s Liberal Democratic Party and coalition partner Komeito falling short of the 125 seats needed to keep control of Japan’s upper house, which was a key goal of Ishiba’s.
Ishiba told NHK that he still intended to stay on as prime minister and party leader, amid growing calls for his removal.
Sunday’s loss comes after Ishiba’s ruling LDP suffered a drastic defeat in October’s lower house election, which reflected consistently souring public faith in the party. Promises of more government welfare and tax cuts from opposition parties, such as the Constitutional Democratic Party of Japan, also appeared to have swayed voters.
The result and questions around Ishiba’s future threaten to potentially disrupt crunch trade talks with the U.S. Ishiba said over the weekend that he has spoken with Trump as negotiations go "truly down-to-the-wire."
4. EU preparing new retaliatory trade measures against U.S. - WSJ
Japan’s discussions with the White House are one of a series of negotiations that are reportedly being held as an impending August 1 deadline for Trump’s elevated "reciprocal" tariffs to take effect edges closer.
One crucial unknown revolves around the fate of U.S. talks with the European Union.
The European bloc has been pushing for Washington to agree to maintain a baseline 10% duty, but U.S. officials told the EU’s trade chief last week that they expect Trump to demand more concessions, the Wall Street Journal reported. These would include a baseline tariff of 15% or higher, the paper added.
In response, Germany -- Europe’s biggest exporter and economic powerhouse -- has joined France in backing a more confrontational stance with the Trump administration, the WSJ said. The EU is even mulling fresh measures to hit back against U.S. companies that go beyond already outlined retaliatory levies on goods should a deal not be reached, according to the report.
5. China stocks upbeat after loan prime rate hold
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite averages rose 0.7%, while Hong Kong’s Hang Seng index added 0.6%, after the People’s Bank of China left its benchmark loan prime rate unchanged at historic lows on Monday, as widely projected.
The hold comes amid some expectations that Beijing will slow its pace of monetary stimulus, especially after China and the U.S. agreed to lower their respective trade tariffs against each other in May and June.
China’s monetary policy is expected to remain largely expansionary, heralding more stimulus support and rate cuts from Beijing as the world’s second largest economy grapples with sluggish growth.
Hong Kong-listed Chinese internet firms were a major outperformer in the past week, especially after artificial intelligence major Nvidia (NASDAQ:NVDA) signaled that it will resume selling a key chip in the country. Nvidia’s chips are crucial for China’s AI ambitions, which are spearheaded by majors such as Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), and Tencent Holdings Ltd (HK:0700) (F:NNND).