U.S. stock index futures pointed to a slightly firmer open on Tuesday, signaling that Wall Street may extend the gains that pushed the major averages to fresh record highs at the start of the week.
The market remains supported by optimism surrounding an upcoming meeting between President Donald Trump and Chinese President Xi Jinping, which investors hope will pave the way for a trade agreement between the world’s two largest economies. Confidence was further underpinned by news of a U.S.-Japan deal on rare metals, reinforcing expectations ahead of the summit later this week.
Still, enthusiasm could be tempered as traders await the Federal Reserve’s policy decision on Wednesday. The Fed is widely anticipated to trim interest rates by 25 basis points, but investors will be paying close attention to Chair Jerome Powell’s press conference and the accompanying statement for signals on the pace of future rate cuts.
Data from CME Group’s FedWatch Tool shows a 94.9% probability of another quarter-point rate cut in December, though forecasts beyond that remain more uncertain.
Earnings are also set to dominate sentiment this week. Heavyweights including Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), Meta Platforms Inc. (NASDAQ:META), Microsoft Corporation (NASDAQ:MSFT) and Amazon.com Inc. (NASDAQ:AMZN) are all due to report quarterly results in the coming days.
On Monday, Wall Street surged for a second consecutive session, building on last week’s strength. The Nasdaq Composite jumped 432.59 points, or 1.9%, to 23,637.46. The S&P 500 added 83.47 points, or 1.2%, to 6,875.16, and the Dow Jones Industrial Average climbed 337.47 points, or 0.7%, to 47,544.59.
The advance was fueled by renewed trade optimism. Over the weekend, Treasury Secretary Scott Bessent described weekend negotiations with Chinese officials in Malaysia as a “very successful framework” ahead of the Trump–Xi talks. He also suggested that China may resume U.S. soybean purchases and postpone export restrictions on rare earth materials.
Before heading to Japan, Trump echoed this positive tone, voicing confidence about reaching a deal with Beijing after signing separate trade and mineral agreements with Malaysian and Cambodian leaders.
Hopes of lower borrowing costs have also strengthened sentiment in the lead-up to the Fed’s decision.
Sector-wise, chipmakers led the rally. The Philadelphia Semiconductor Index jumped 2.7% to a record close, powered by a sharp 11.1% rise in Qualcomm (NASDAQ:QCOM) after it unveiled new AI accelerator chips to compete with NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD).
Telecom names also outperformed, with the NYSE Arca North American Telecom Index gaining 1.4%. Transportation, steel and software stocks posted additional gains, while gold producers fell sharply in tandem with lower bullion prices.
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