U.S. stock index futures pointed to a positive start on Monday, signaling that Wall Street may extend the momentum built in Friday’s rally.
Early buying interest is being supported by a The Wall Street Journal report suggesting that the Trump administration has been quietly easing some tariff measures that underpin the president’s signature trade policy.
According to the report, President Donald Trump has “exempted dozens of products from his ‘reciprocal tariffs’ in recent weeks and offered to carve out hundreds more goods when countries strike trade deals with the U.S.”
Even so, investors are expected to remain somewhat cautious ahead of Friday’s release of the consumer price index, a key inflation indicator that could influence expectations for future Federal Reserve policy.
Despite the ongoing government shutdown, the Bureau of Labor Statistics confirmed the data would still be released to allow the Social Security Administration to meet legally mandated payment deadlines.
Earnings season is also set to ramp up this week, with results expected from heavyweights including The Coca-Cola Company (NYSE:KO), General Motors (NYSE:GM), Netflix (NASDAQ:NFLX), AT&T (NYSE:T), IBM (NYSE:IBM), Tesla (NASDAQ:TSLA) and Intel (NASDAQ:INTC).
On Friday, the major U.S. averages closed higher after shaking off early uncertainty. The Dow Jones Industrial Average climbed 238.37 points, or 0.5%, to 46,190.61. The Nasdaq Composite added 117.44 points, or 0.5%, to 22,679.97, while the S&P 500 gained 34.94 points, or 0.5%, to 6,664.01.
The rally helped the indexes notch solid weekly gains: the Nasdaq advanced 2.1%, while the S&P 500 and Dow rose 1.7% and 1.6%, respectively.
The rebound was driven in part by fading worries over bad loans that had weighed on the market a day earlier. Jefferies Financial Group (NYSE:JEF) and Zions Bancorporation (NASDAQ:ZION) both bounced back strongly, while Truist Financial (NYSE:TFC), Fifth Third Bancorp (NASDAQ:FITB) and Huntington Bancshares (NASDAQ:HBAN) climbed after posting better-than-expected earnings.
Trade optimism also contributed to Friday’s gains. In an interview with Fox Business, Trump said the steep tariffs he had threatened on Chinese imports are “probably not [sustainable]” but argued “they forced me to do that.”
He also confirmed plans to meet with Chinese President Xi Jinping later this month in South Korea, dispelling doubts he had previously raised about the usefulness of the summit.
Sector-wise, most areas posted modest moves, with gold stocks underperforming sharply. The NYSE Arca Gold Bugs Index tumbled 7.4% after hitting a record high the previous day, as gold prices pulled back from recent peaks.
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