Key Takeaways
- U.S. stock futures are showing gains, with the Nasdaq-100 leading, as investors anticipate key inflation data and a Federal Reserve policy meeting this week.
- The Personal Consumption Expenditure (PCE) inflation measure, the Fed's preferred gauge, rose to 2.6% annualized in June, exceeding the 2% target and potentially influencing the Fed's rate decisions.
- Market sentiment is buoyed by a new Trump–EU trade deal easing tariff concerns and strong corporate earnings, with estimates rising to 9.7%.
- Tesla (TSLA) shares surged following a $16.5 billion AI chip partnership with Samsung, contributing significantly to tech sector optimism.
U.S. stock futures are ticking higher as markets prepare for a critical week dominated by upcoming inflation data and a pivotal Federal Reserve policy meeting. Dow futures are up 0.1%, S&P 500 futures have gained 0.3%, and Nasdaq-100 futures are leading the charge with a 0.5% jump. This positive momentum follows a period where both the S&P 500 (.INX) and Nasdaq Composite (.IXIC) recently hit record highs, fueled by enthusiasm for artificial intelligence and generally improving market sentiment.
A primary focus for investors this week will be the release of key inflation figures, particularly the Personal Consumption Expenditure (PCE) data, which is the Federal Reserve's preferred inflation gauge. The PCE inflation measure rose to an annualized 2.6% in June, up from 2.2% in April. This figure remains above the Fed's long-term 2% target, presenting a challenge for policymakers as they consider future interest rate adjustments. The current federal funds rate is near 4.3%, indicating a restrictive monetary policy stance.
Beyond economic data, market sentiment has been bolstered by a recent breakthrough Trump–EU trade deal, which has helped to ease fears of a full-blown tariff war and instill optimism across global markets. Corporate earnings have also provided a significant tailwind, with earnings growth estimates sharply increasing to 9.7% from 3.8% at the end of the second quarter.
In company-specific news, electric vehicle giant Tesla (TSLA) saw its stock surge after announcing a $16.5 billion AI chip partnership with Samsung. This development has fueled broader optimism within the technology sector. Additionally, defense companies such as Lockheed Martin (LMT) and RTX (RTX) have also seen gains following news of new European military contracts, further contributing to the positive market open.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.