U.S. stock futures opened the week with modest gains, supported by optimistic expectations around corporate earnings. Futures on the Dow Jones, Nasdaq, and S&P 500 all posted early Monday increases, reflecting cautious investor sentiment ahead of earnings from major companies. So far, around 86% of companies that have reported earnings have exceeded analysts’ expectations, reinforcing a positive outlook for the current earnings season.
Verizon kicks off this week’s earnings calendar, followed by heavyweights like Alphabet and Tesla. Market participants are closely watching these results as indicators of how tech and industrial sectors are navigating profitability amid global economic slowdown. The strong start to earnings season has raised expectations, making any disappointments potentially more volatile for the market.
In Japan, preliminary results from the parliamentary elections revealed a loss of majority in the upper house for Prime Minister Shigeru Ishiba’s ruling coalition. This political shift weakens Japan’s negotiating position in ongoing trade talks with the United States, particularly as the August 1 deadline for potential new U.S. tariffs approaches. Domestic political instability in Tokyo may complicate efforts to finalize a comprehensive agreement with Washington.
In a notable development, the U.S. administration informed EU officials of its intention to raise the baseline tariff to 15% on most European goods up from the previously expected 10%. This change prompted Germany to align with France’s tougher stance, moving away from its earlier preference for compromise. European responses suggest the trade dispute may escalate if a resolution is not reached before the looming deadline.
In reaction, EU countries are pressing the European Commission to prepare a package of retaliatory measures. These include targeted tariffs on U.S. goods, restrictions on American tech firms in the European digital market, and limiting U.S. companies’ access to public procurement contracts. The EU is also considering invoking its rarely used “anti-coercion” instrument to counter what it sees as economic pressure from Washington.
Meanwhile, Asian markets moved higher, with Chinese indices posting notable gains after the People’s Bank of China left its benchmark loan prime rate unchanged. This signals Beijing’s commitment to measured monetary stimulus. The technology sector led the rally, especially after Nvidia announced it would resume selling key chips in the Chinese market supporting China’s AI ambitions through major players like Tencent, Alibaba, and Baidu.
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