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Investing.com - Canada’s main stock exchange ended lower on Monday, with investors eyeing the weekend trade deal between the U.S. and European Union.
By 4.01 ET, the S&P/TSX 60 standard index futures contract was down 5 points, or 0.33%.
The S&P/TSX composite index retreated from fresh record touched Friday. It was down 0.32% or 88 points at 27,405.42.
A slate of major U.S. tech earnings and crucial economic data are scheduled to be released, while the impending August 1 deadline for elevated "reciprocal" U.S. tariffs on a host of countries is now only days away.
President Donald Trump said last week that the White House has not "really had a lot of luck with Canada" despite recent trade discussions. The U.S. has threatened to slap 35% tariffs on all Canadian goods not covered by the U.S.-Mexico-Canada trade agreement.
Further adding to the docket will be interest rate decisions from global central banks, including announcements from the Bank of Canada and the Federal Reserve on Wednesday. Analysts broadly expect the Canadian central bank to keep its overnight interest rate unchanged at 2.75% for the third straight meeting, as policymakers eye rising inflation and declining unemployment.
U.S. stocks mixed
U.S. equites were ended in mixed fashion on Monday, with sentiment like the U.S./EU trade deal a wave of major earnings, economic data and central bank decisions in play.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average traded 64 points, or 0.1%, lower, while the S&P 500 index was flat, and the tech-heavy NASDAQ Composite climbed 0.3%.
The benchmark S&P 500 and tech-heavy NASDAQ Composite both logged record closing highs at the end of the previous session on Friday, extending a strong run for Wall Street. Upbeat quarterly results, as well as the prospect of more certainty around often erratic U.S. tariff plans, have helped to support equities in recent weeks.
U.S., EU reach framework trade deal
The United States and European Union reached a landmark trade agreement over the weekend, a deal that includes a 15% tariff on EU goods entering the U.S.
The broad-strokes deal encompasses significant EU purchases of U.S. energy and military gear, along with substantial investments in the American economy. The EU has committed to purchasing $750 billion worth of energy from the U.S, and has agreed to make $600 billion in investments in the U.S.
Of the $3.3 trillion in goods imported by the U.S. last year, more than $600 billion came from the 27-member EU.
The pact has helped to further ease market jitters, which had grown over fears of a deadlock before Trump’s "reciprocal" tariffs take effect on August 1.
“The big caveat to today’s deal is that there is nothing on paper, yet. The next hours and days will hopefully bring more clarity,” ING analysts said in a note.
Fed meeting, PCE inflation on tap
Away from trade negotiations, the U.S. Federal Reserve kicks off its two-day policy meeting this week, wrapping up on July 30. While rates are expected to stay at 4.25%–4.5%, investors will watch closely for signals on a possible cut in September.
“We see no interest rate cut this month, but the Fed is expected to start laying the groundwork for a move, most likely in December,” ING analysts added.
The Bank of Japan also holds a key meeting on Thursday, ahead of June’s PCE price index, the Fed’s preferred inflation gauge.
Investors will also watch key labor data this week, including JOLTS on Tuesday, ADP (NASDAQ:ADP) private payrolls on Wednesday, jobless claims on Thursday, and the key July jobs report on Friday.
"Magnificent Seven" earnings due
Investors are also gearing up for the busiest week of the earnings season, with more than 150 companies in the S&P 500 due to post their quarterly results.
This includes “Magnificent Seven” members, Facebook-owner Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.
Investors will be listening for companies’ comments on AI spending for direction on whether big investments in hyperscalers this year are justified.
Crude gains on trade deal
Oil prices rose Monday, boosted by the news of a trade agreement between the U.S. and the European Union, which relieved concerns of an economically damaging trade war.
At 12.05 ET, Brent futures climbed 2.1% to $69.10 a barrel, and U.S. West Texas Intermediate crude futures rose 2% to $66.49 per barrel.
The crude markets have gained support from the prospect of more trade deals between the United States and trading partners ahead of an August 1 deadline for new tariffs on goods from an array of countries.
Gold prices lower
Gold prices went lower on Monday, even as some traders eyed bolstered risk appetite following the trade deal between the U.S. and EU. and exercised caution ahead of the Fed interest rate decision this week.
Investors may be particularly keen to hear what officials may have to say about the path ahead for the U.S. economy in the second half of 2025. The prospect of rate cuts later this year could provide some support to gold, which tends to do better in low borrowing-cost environments.
Spot gold were down 0.75% $3,312.48 an ounce, while gold futures was also down .72% at $3,368.06/oz by 12.05 ET.