U.S. stock futures advanced on Monday, supported by optimism over progress in trade negotiations between the United States and China, as well as a busy earnings and central bank calendar. Officials on both sides said they had forged a framework deal ahead of a long-anticipated meeting between the two countries’ leaders. Meanwhile, Donald Trump suggested a decision on who will replace Jerome Powell as the next Fed chair could be made by year-end.
Futures Rise
Wall Street futures opened the week in positive territory, setting the stage for a potentially strong few days marked by key earnings releases and major monetary policy decisions around the globe, including from the Federal Reserve.
By 03:58 ET, Dow futures were up 323 points (+0.7%), S&P 500 futures rose 58 points (+0.9%), and Nasdaq 100 futures gained 285 points (+1.1%). All three major U.S. indexes closed at record highs on Friday, buoyed by softer-than-expected inflation data, which strengthened expectations for an interest rate cut at the Fed’s two-day policy meeting starting Tuesday. CME’s FedWatch Tool indicates over a 95% probability of another cut at the central bank’s December meeting.
Corporate earnings have been broadly encouraging, offering insight into the economy despite the lack of fresh government data due to the prolonged federal shutdown. Analysts now expect S&P 500 third-quarter earnings to grow 10.4% year-on-year, up from 8.8% in early October, according to LSEG data cited by Reuters.
Trade Framework Fuels Optimism
Market sentiment was further boosted by hopes of a trade breakthrough between Washington and Beijing. On Sunday, negotiators from both sides announced they had reached a framework agreement on tariffs and other issues, ahead of Thursday’s high-profile meeting between Trump and Xi Jinping in South Korea.
Speaking in Malaysia, U.S. trade representative Jamieson Greer said talks were nearing the stage where the “final details” could be presented to the two leaders. Chinese lead negotiator Li Chenggang added that a “preliminary consensus” was achieved after “candid and in-depth discussions.”
The discussions come amid heightened trade tensions after Trump threatened triple-digit tariffs in response to Beijing’s rare earth export restrictions. U.S. Treasury Secretary Scott Bessent, however, told ABC’s This Week he believes the tariffs “will be averted” and that China is prepared to make “concessions” on export controls.
Trump Signals Fed Chair Pick by Year-End
Beyond trade, Trump said he expects to reveal his pick to replace Powell by the end of the year. Although Powell was nominated by Trump in 2017, the president has frequently criticized the Fed’s cautious approach to monetary policy and urged faster, deeper rate cuts.
Bessent said the administration is preparing a “good slate” of candidates “right after Thanksgiving.” Those under consideration reportedly include Kevin Hassett, Kevin Warsh, Christopher Waller, Michelle Bowman and Rick Rieder. Powell’s current term ends in May 2026, though he could remain a Fed governor until 2028.
Earnings Season Kicks Off
Earnings season heats up with Keurig Dr Pepper (NASDAQ:KDP) kicking things off. Bloomberg estimates forecast adjusted EPS of $0.54 on revenue of $4.15 billion. Investors will be looking for updated guidance after rivals PepsiCo (NASDAQ:PEP) and The Coca-Cola Company (NYSE:KO) reported gains driven by a weaker dollar.
Trump’s decision to impose an additional 10% tariff on Canadian goods over the weekend could also affect Keurig Dr Pepper’s operations in Canada.
Later this week, earnings from major tech firms will take center stage. Reports from Alphabet Inc. (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) are expected on Wednesday, followed by Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) on Thursday.
Gold Dips as Risk Appetite Grows
Gold prices extended their decline, pressured by easing U.S.–China tensions and improving investor sentiment. Spot gold fell 1.3% to $4,060.80 an ounce by 00:44 ET, while U.S. gold futures slid 1.6% to $4,072.60 an ounce.
Despite the drop, expectations of a quarter-point Fed rate cut have limited further losses, as non-yielding assets like gold tend to benefit from lower interest rates. The metal recently ended a nine-week winning streak after hitting record highs above $4,300/oz.
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