U.S.-China trade talks; earnings, data wave ahead - what’s moving markets

Investing.com - Futures linked to major Wall Street averages inch up amid a deluge of crucial earnings releases, economic data and a key Federal Reserve interest rate decision this week. Meanwhile, officials from the U.S. and China meet in Sweden for renewed tariff talks, with media reports suggesting that the two could extend a recent trade truce. Nvidia has reportedly placed fresh orders for 300,000 of its H20 AI chips with contract manufacturer Taiwan Semiconductor Manufacturing Co as demand surges in China.

1. Futures rise

U.S. stock futures pointed higher on Tuesday, as investors assessed fresh talks between the U.S. and China and geared up for a raft of corporate earnings and economic data this week.

By 03:35 ET (07:35 GMT), the Dow futures contract had risen by 27 points, or 0.1%, S&P 500 futures climbed by 8 points, or 0.1%, and Nasdaq 100 futures were up by 62 points, or 0.3%.

On Monday, the benchmark S&P 500 notched a fresh record high, while the tech-heavy Nasdaq Composite also rose, following the weekend announcement of a trade agreement between the U.S. and European Union. The deal was the latest in a flurry of pacts the White House has raced to secure before August 1, when heightened "reciprocal" tariffs on a host of countries are due to come into effect.

Analysts at Vital Knowledge said in a note that the 15% across-the-board tariff rate set on EU goods imported into the U.S. had been widely expected and "that’s exactly what [markets] got."

Beyond trade, investors were keeping tabs on early signs that the quarterly earnings season may be stronger than initially anticipated, along with an upcoming Federal Reserve interest rate decision later this week. Key economic indicators, including the Fed’s preferred gauge of inflation, are also scheduled to be released in the coming days.

In individual stocks, Nike (NYSE:NKE) shares jumped after analysts at JPMorgan Chase (NYSE:JPM) raised their rating of the stock to "overweight" from "neutral."

2. U.S.-China talks

The U.S. and China are expected to continue their latest round of trade talks in Sweden on Tuesday, with Beijing facing an August 12 deadline to reach a longer-lasting tariff agreement with Washington.

Officials from both countries, including Treasury Secretary Scott Bessent, were part of the negotiating teams present at the meetings in the Swedish Prime Minister’s office in Stockholm. Chinese Vice Premier He Lifeng was seen at the venue as well, Reuters reported, citing video footage.

None of the officials were seen leaving the site on Monday evening, but did not stop to speak with reporters.

Both sides had previously agreed on preliminary trade pacts earlier this year which cooled an intensifying trade war marked by rapidly escalating tit-for-tat tariffs and the squeezing-off of crucial rare earth minerals exports.

Although U.S. Trade Representative Jamieson Greer suggested that an "enormous breakthrough" was not imminent, media reports have hinted at the chance of a 90-day extension to the trade truce -- possibly opening a path for a future meeting betwen Trump and Chinese counterpart Xi Jinping.

3. Earnings wave incoming

A wave of corporate earnings is set to gather pace, with a total of 164 S&P 500 companies anticipated to unveil their latest quarterly results this week.

Prior to the opening bell on Wall Street, numbers are expected to be released from a host of firms, including drugmaker Merck & Co (NYSE:MRK)., healthcare giant UnitedHealth Group (NYSE:UNH) and jetmaker Boeing (NYSE:BA). Consumer goods titan Procter & Gamble (NYSE:PG), which announced the departure of CEO Jon Moeller on Monday, is also slated to report.

Visa (NYSE:V) will highlight the docket of returns after U.S. markets close. The payment card group and rival MasterCard are tipped to provide a fresh glimpse into the state of the American consumer during a time of broad tariff-fueled uncertainty.

The busy earnings calendar extended into Europe, where pharma firm AstraZeneca (NASDAQ:AZN) reported higher-than-anticipated second-quarter profit thanks in part to solid demand for its cancer treatments. Barclays (LON:BARC) also delivered better-than-projected income, as its markets trading unit was boosted by volatility in the wake of Trump’s "reciprocal" tariff announcement in April.

Dutch consumer healthcare company Philips shares surged after it lifted its full-year margin guidance, citing a hit from levies that was lower than it had initially expected. But shares of Jeep-maker Stellantis (NYSE:STLA) edged down, as its new CEO warned of "challenges" ahead despite guiding for an uptick in net revenues in the second half.

4. Data ahead

A week that analysts have described as one of the busiest and most pivotal of the year will also feature a bevy of key data that could sway the outlook for the American economy.

Among the headlining figures on Tuesday will be a measure of job openings and labor turnover, a proxy for labor demand. The so-called JOLTS survey is seen inching down to 7.510 million from 7.769 million.

The numbers are seen offering some insight into the health of the U.S. labor market. Later this week, a tracker of private payrolls and the all-important July jobs report are also scheduled to be released.

Elsewhere, the Conference Board’s metric of consumer confidence for July is also due out, with economists expecting it to tick up compared to the prior month.

The data points come as the Fed begins its latest two-day policy gathering on Tuesday. Markets are betting the central bank will leave interest rates unchanged at the end of its meeting, especially after some policymakers recently suggested that a wait-and-see attitude may be prudent as they await more clarity around the impact of the Trump administration’s aggressive tariff agenda.

5. Nvidia orders 300,000 H20 chips as China demand spikes - report

Nvidia (NASDAQ:NVDA) has placed fresh orders for 300,000 of its H20 AI chips with contract manufacturer Taiwan Semiconductor Manufacturing Co (TSMC) (TW:2330) amid rising demand from China, Reuters reported on Tuesday, citing unnamed sources.

The move comes after the Trump administration earlier this month allowed Nvidia to resume sales of the H20 to Chinese customers, reversing an April ban aimed at restricting advanced AI chip access.

The new orders with TSMC would add to the existing inventory of 600,000 to 700,000 H20 chips, the report said. The company sold around 1 million H20 chips in 2024, the report added, citing data from SemiAnalysis.

Developed specifically for China, the H20 lacks the computing power of Nvidia’s flagship H100 or Blackwell chips, but remains vital in the AI race. Nvidia CEO Jensen Huang said in Beijing this month that production could take nine months to resume.