U.S. stock markets remained mostly flat on Monday after Washington agreed to impose a 15% tariff on cars and other goods from the European Union—lower than the steeper rates previously threatened by former President Donald Trump. While the move helped ease trade tensions, many details of the agreement are still pending, and investors are bracing for a pivotal week packed with earnings reports, economic data, and a Federal Reserve decision.
By midday, the S&P 500 hovered near the flatline following a week of record-setting highs. The Dow Jones Industrial Average edged down by just 8 points, or less than 0.1%, while the Nasdaq Composite rose 0.2%, adding to its own streak of all-time highs.
Tesla shares climbed 3.5% after CEO Elon Musk announced a significant chip supply agreement with Samsung Electronics, potentially valued at over $16.5 billion. Samsung’s stock surged 6.8% in South Korea following the news.
Other technology and chip-related stocks also continued to gain, building on momentum from last week. Alphabet recently revealed a $10 billion increase in its AI and chip infrastructure investments, bringing its total planned spending this year to $85 billion. That news lifted shares of chipmaker AMD by 3.7%, while Super Micro Computer—known for AI server systems—jumped 6.7%.
However, gains in the tech sector were partially offset by a 9.7% decline in Revvity shares. While the life sciences company beat earnings expectations, its full-year profit forecast came in below Wall Street’s average estimates.
Market analysts say investors are now demanding stronger corporate profits to justify the market’s recent surge. Much of the rally had been fueled by optimism that Trump would ease back on his hardline tariff proposals. Without stronger earnings, many see current valuations as stretched.
“This could be one of the busiest and most influential weeks for markets,” said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.
Roughly one-third of companies in the S&P 500 index are set to report earnings this week, including major tech names like Apple, Amazon, Meta, and Microsoft. These companies have become so dominant in the index that their stock performance can heavily sway the broader market. Microsoft alone has a market value of around $3.8 trillion.
On Wednesday, the Federal Reserve will announce its next move on interest rates. Trump has repeatedly called for immediate rate cuts to boost the economy, but Fed Chair Jerome Powell has indicated the central bank will wait for more economic data, particularly around the effects of tariffs and inflation, before making a decision.
Although the Fed paused rate cuts earlier this year after several reductions in late 2024, markets largely expect the next move to come in September. Still, some dissenting votes from Trump-appointed members are possible.
A flurry of economic data is also on tap this week. Tuesday will bring updates on consumer confidence and job openings, while Wednesday will offer a first estimate of second-quarter GDP growth, which is expected to show a slowdown from earlier in the year. On Thursday, a key inflation reading—closely watched by the Fed—will be released. A softer figure could pave the way for rate cuts, while a stronger-than-expected number may cause hesitation.
Friday will cap the week with the June jobs report, showing how many positions U.S. employers added or cut.
In the bond market, Treasury yields held steady ahead of the packed schedule. The 10-year Treasury yield inched up to 4.41%, while the 2-year yield, which is more sensitive to Fed policy, rose slightly to 3.93%.
Overseas, European markets dipped in response to the new U.S.-EU trade deal framework. In Asia, Chinese stocks saw gains as officials prepared for trade talks with a U.S. delegation in Sweden. Hong Kong’s Hang Seng rose 0.7%, and Shanghai’s main index gained 0.1%. Meanwhile, Japan’s Nikkei 225 dropped 1.1%, marking one of the region’s larger declines.
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