U.S. equity futures ticked up early Monday as traders weighed soft economic data, mounting trade tensions, and the potential for a Federal Reserve interest rate cut. Robust corporate earnings continued to cushion markets against signs of a slowdown and policy uncertainty, while Berkshire Hathaway (NYSE:BRK.A) reported weaker profits following a major asset write-down.
Futures Rebound After Sharp Friday Sell-Off
After ending last week on a sour note, U.S. stock futures regained ground in early trading, buoyed by rising expectations of a rate cut. As of 03:00 ET, Dow Jones futures were up 128 points (0.3%), S&P 500 futures climbed 24 points (0.4%), and Nasdaq 100 futures gained 102 points (0.4%).
Friday’s session saw steep losses, especially in the S&P 500, which posted its worst daily drop in over two months. Sentiment was rattled by weaker-than-anticipated jobs data and President Donald Trump’s announcement of heightened tariffs targeting numerous trading partners.
Further market anxiety came as Trump abruptly dismissed the head of the U.S. Bureau of Labor Statistics, claiming without evidence that employment numbers were manipulated. Analysts flagged the move as a threat to the credibility of official data, raising questions about future transparency under a politically appointed replacement.
Following the disappointing employment report, traders increased their bets on a potential interest rate cut from the Federal Reserve as early as September. Still, according to several media reports, Fed officials remain cautious and are awaiting more economic indicators before adjusting their stance.
Solid Earnings Season Offers Market Support
Despite macro concerns, corporate earnings have largely delivered, reinforcing the bullish sentiment surrounding artificial intelligence. Tech heavyweights such as Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) have posted strong second-quarter results and reaffirmed their aggressive investment plans in AI infrastructure.
These earnings have helped mitigate investor concerns about the economic fallout from Trump’s tariff strategy, though some companies have warned that price increases may be necessary in coming months.
According to LSEG data cited by Reuters, S&P 500 companies are on track to post 9.8% year-over-year earnings growth for Q2, up from a forecast of 5.8% at the start of July. Over 80% of firms reporting so far have exceeded Wall Street estimates—well above the 76% average of the past four quarters.
This week, investors will be closely watching earnings from key Dow components including Caterpillar (NYSE:CAT), McDonald’s (NYSE:MCD), and Disney (NYSE:DIS), all of which may influence broader market sentiment as the index nears its all-time high from December.
Berkshire Hathaway Sees Profit Drop on Kraft-Heinz Write-Down
Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) reported a significant drop in second-quarter profit, driven by a $3.76 billion impairment on its Kraft Heinz (NASDAQ:KHC) stake and lower insurance premiums. Net income fell to $12.37 billion from $30.35 billion a year earlier, while revenue dipped 1.2% to $92.5 billion.
The conglomerate saw modest gains in equity holdings such as Apple (NASDAQ:AAPL) and American Express (NYSE:AXP), but those were overshadowed by weaker performance in its insurance business. However, operating income at BNSF, Berkshire’s railroad division, surged nearly 20%, supported by cost controls and reduced fuel expenses.
Berkshire ended the quarter with $344 billion in cash, slightly down from $348 billion but still near record levels. The earnings arrive as the company prepares for Buffett’s planned retirement at the end of 2025, with Vice Chair Greg Abel set to take the reins.
Oil Prices Hold Steady Despite OPEC+ Output Increase
Oil prices remained relatively flat on Monday, even after OPEC+ confirmed another sizeable production increase. Brent crude slipped 0.2% to $69.80 a barrel, while WTI rose 0.3% to $67.53 at 03:10 ET.
The group of oil-producing nations agreed to boost output by 547,000 barrels per day in September—consistent with previous hikes and signaling the full unwinding of earlier supply cuts equivalent to roughly 2.5 million bpd, or 2.4% of global demand.
Gold Softens as Traders Take Profits; Bitcoin Recovers
Gold prices were mixed in early European trade after Friday’s rally, which had been fueled by the weaker jobs report and increasing expectations of lower rates. Spot gold edged down 0.2% to $3,355.69 per ounce, while December futures rose 0.3% to $3,408.67.
The yellow metal had jumped over 2% on Friday, bouncing back after two consecutive weeks of losses. Meanwhile, Bitcoin rose 0.8% to $114,567.60, stabilizing after a 3% slide over the previous five sessions.
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