U.S. stock futures showed modest gains on Monday as investors prepared for a busy week packed with key earnings reports from S&P 500 companies. Verizon (NYSE:VZ) is set to kick off the earnings calendar on Monday, with major tech players like Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA) following later in the week. Meanwhile, Japan’s parliamentary elections have introduced uncertainty over critical trade negotiations with the U.S., and the Wall Street Journal reports that the European Union is readying new countermeasures against American firms if trade talks between the EU and Washington fail before the looming tariff deadline.
Futures tick up
By 03:38 ET, Dow futures had risen by 118 points (0.3%), S&P 500 futures were up 15 points (0.2%), and Nasdaq 100 futures gained 61 points (0.3%). Wall Street’s main indexes closed Friday with muted moves: the Dow Jones Industrial Average slipped 0.3%, while the S&P 500 and Nasdaq Composite were mostly flat.
Market sentiment was dampened by reports that the Trump administration is considering increasing tariffs on the European Union to a minimum of 15% to 20%, up from the current 10%. Still, July saw a rise in U.S. consumer sentiment, despite ongoing worries about potential inflationary pressures linked to tariffs.
President Donald Trump’s assertive trade policies have been a central theme in the accelerating stream of Q2 earnings. Despite some uncertainty clouding the rest of 2025, over 80% of companies reporting so far have exceeded analysts’ expectations.
Cryptocurrency-related stocks advanced, buoyed by the U.S. House of Representatives passing a bill to establish a regulatory framework for the digital currency sector. Coinbase Global (NASDAQ:COIN) climbed 2.2%, and Robinhood Markets (NASDAQ:HOOD) added 4.1%.
Verizon leads earnings releases this week
Earnings season ramps up this week with over 85% of S&P 500 companies yet to report results. Verizon headlines Monday’s pre-market reports, while chipmaker NXP Semiconductors (NASDAQ:NXPI) is expected to report after the close.
Tuesday will see reports from Texas Instruments (NASDAQ:TXN) and Coca-Cola (NYSE:KO), followed by Alphabet and Tesla on Wednesday. Intel (NASDAQ:INTC), Union Pacific (NYSE:UNP), and Honeywell International (NASDAQ:HON) are due Thursday, with Phillips 66 (NYSE:PSX) and AutoNation (NYSE:AN) closing out the week on Friday.
So far, around 12% of the S&P 500 has reported, with 86% beating earnings per share estimates and 67% surpassing sales forecasts. Some investors caution that the early strength of this reporting period may raise expectations for upcoming earnings. Still, the overall start has been broadly positive amid ongoing economic uncertainty and trade tensions.
Japanese elections bring new challenges
Public broadcaster NHK reported Monday that a coalition led by Japanese Prime Minister Shigeru Ishiba’s ruling Liberal Democratic Party (LDP) is set to lose its majority in the upper house, adding new uncertainty to U.S.-Japan trade talks.
Exit polls indicate that the LDP and coalition partner Komeito fell short of the 125-seat threshold needed to maintain control of the upper house, a key goal for Ishiba. Despite the setback, Ishiba told NHK he intends to remain prime minister and party leader amid calls for his resignation.
Sunday’s results follow a heavy defeat for the LDP in October’s lower house election, reflecting declining public support. Opposition promises for increased welfare and tax cuts, led by parties like the Constitutional Democratic Party of Japan, also influenced voters.
This political shake-up may complicate critical trade negotiations with the U.S., with Ishiba describing talks with Trump as “truly down-to-the-wire.”
EU readies retaliatory measures against U.S., WSJ reports
Japan’s talks with Washington are just one of several ongoing negotiations ahead of the August 1 deadline for Trump’s heightened “reciprocal” tariffs to take effect.
One major uncertainty centers on U.S.-EU trade discussions. The EU has pushed for Washington to maintain a 10% baseline tariff, but U.S. officials reportedly expect Trump to demand tougher terms, including a 15% or higher baseline tariff, the Wall Street Journal said.
In response, Germany—the EU’s largest exporter—has joined France in advocating a firmer stance against the Trump administration. The EU is even considering additional retaliatory measures targeting U.S. companies beyond existing planned levies, should no deal be reached.
Chinese markets respond to steady loan prime rate
China’s CSI 300, Shanghai Composite, and Hong Kong’s Hang Seng all rose modestly—0.7% and 0.6% respectively—after the People’s Bank of China kept its benchmark loan prime rate unchanged at historic lows, as widely anticipated.
This pause signals Beijing’s intention to continue monetary stimulus, though perhaps at a more measured pace, following recent tariff reductions agreed with the U.S. Monetary policy is expected to remain accommodative to support growth in the world’s second-largest economy.
Chinese internet stocks listed in Hong Kong outperformed last week, bolstered by Nvidia’s (NASDAQ:NVDA) announcement that it will resume selling a key AI chip in China. This chip is vital to China’s AI ambitions, driven by major players like Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), and Tencent Holdings (USOTC:TCEHY).
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