Trump-Zelensky meeting ahead, Fed rate outlook in focus - what’s moving markets

Investing.com - U.S. stock futures were muted ahead of a high-stakes meeting between President Donald Trump and Ukrainian President Volodymyr Zelensky in Washington. The outlook for the Federal Reserve’s interest rate trajectory remains in focus as well, with minutes from the central bank’s July meeting and Chair Jerome Powell’s speech at a much-anticipated event set to come later this week. Elsewhere, Palo Alto Networks (NASDAQ:PANW) is due to report following the closing bell on Wall Street.

1. Futures muted

U.S. stock futures were subdued on Monday, as investors looked ahead to a week of potentially key developments in Federal Reserve interest rate policy and gauged the outlook for an upcoming U.S.-Ukraine meeting.

By 03:23 ET (07:23 GMT), the Dow futures contract had slipped by 97 points, or 0.2%, S&P 500 futures had fallen by 7 points, or 0.1%, and Nasdaq 100 futures were mostly unchanged.

The main averages on Wall Street were mixed at the end of trading on Friday, with the focus on the prospect of impending Fed rate cuts and a crucial talks between President Trump and Russian counterpart Vladimir Putin.

Touching a fresh intra-day high was the blue-chip Dow Jones Industrial Average, which joined the benchmark S&P 500 and tech-heavy Nasdaq Composite in reaching a new all-time peak at some point last week. The S&P 500 and Nasdaq finished the session lower, however, due largely to a slide in technology, financials, industrials, and utilities stocks.

2. FOMC meeting minutes, Powell speech ahead this week

Traders are now gearing up for the release on Wednesday of minutes from the Fed’s last policy gathering in July, when the central bank chose to keep borrowing costs steady at a range of 4.25% to 4.5%.

Yet the decision was met with the rare dissent of two Fed officials for the first time in decades. Fed Governor Christopher Waller and Fed Vice Chair for Supervision Michelle Bowman both advocated for a rate reduction, arguing that it was necessary to help prop up a softening labor market.

Subsequent data has shown that U.S. jobs growth was significantly weaker than anticipated last month, while the totals for June and May were revised sharply lower. Meanwhile, retail sales rose strongly, following an unexpectedly steep uptick in producer prices.

These figures, coupled with relatively restrained consumer price indicators, have painted a complex picture of a possibly slowing labor market and some tariff-driven -- albeit relatively muted -- inflationary pressures.

All this comes as Trump’s actions have also cast doubt over the reliability of U.S. government data and led some analysts to predict a surge of interest in private-label numbers. Trump sparked these worries after he dismissed the commissioner of the agency charged with collecting the statistics, citing without evidence that the downward revisions in the latest jobs report were designed to hurt him politically. He later nominated the chief economist from the conservative think tank Heritage Foundation to lead the agency.

Stepping into these crosswinds will be Fed Chair Jerome Powell, who will deliver a closely-watched speech at an annual symposium in Jackson Hole, Wyoming on Friday. Powell has long advocated for a more cautious approach to policy actions, but markets -- who are themselves penciling in a rate cut at the Fed’s next meeting in September -- are curious to see if his opinions have shifted after the recent data deluge.

3. Zelensky to meet Trump

Ukraine’s Volodymyr Zelensky is due to meet with Trump in Washington on Monday in a bid to arrange the outlines of a potential peace deal.

But worries remain that Trump could try to use the talks to drive Zelensky into a settlement agreement that has been viewed as favorable to Russia. Zelensky has already appeared to dismiss the contours of proposals presented to Trump by Putin at a summit in Alaska on Friday, which included Ukraine losing a chunk of its eastern Donetsk region.

Zelensky, who will be flanked by leaders from a host of European countries as he meets with Trump, has said he supports a "swift and reliable" termination to the more than three-year-old conflict, but said Russia must be willing to end the war "it started."

Trump, for his part, said in a post on his Truth Social platform that Zelensky can "end the war with Russia almost immediately, if he wants to, or he can continue to fight."

"[T]he Ukraine situation seems to be entering a highly fluid state, and there could be additional developments in the days, weeks, and months ahead," analysts at Vital Knowledge said in a note to clients.

They added that, from a markets perspective, the Trump-Putin talks in Anchorage did not feature any of the major outcomes investors had been bracing for, such as a complete ceasefire or "draconian secondary tariffs on China."

4. Palo Alto Networks to report

On the earnings front, cybersecurity firm Palo Alto Networks is expected to headline the slate of July-quarter returns after the closing bell on Monday.

The group is seen posting fiscal fourth-quarter adjusted earnings per share of $0.89 on revenue of $2.5 billion, according to Bloomberg consensus forecasts.

It will be the first report after Palo Alto bought Israeli rival CyberArk Software in a roughly $25 billion deal in July -- the largest such purchase in the company’s history.

While it was viewed as a push by CEO Nikesh Arora to help the business take advantage of artificial intelligence-fueled demand for digital security solutions, analysts flagged concerns around Palo Alto’s ability to fold a platform of CyberArk’s size into its existing operations.

Palo Alto has completed the acquisitions of at least seven firms over the last two years.

5. Gold rises

Gold prices were higher in European trade on Monday, recovering from a more than two-week low as safe havens remained in vogue amid dialogue over the Russia-Ukraine war.

Uncertainty before the Jackson Hole central bank symposium this week also favored gold and weighed on the dollar, as markets maintained bets that the Fed will cut rates next month.

Spot gold advanced by 0.6% to $3,355.47 an ounce, while gold futures for October rose 0.5% to $3.400.55/oz by 03:22 ET. The yellow metal had fallen to an over two-week low last week.