Markets tread water after EU trade deal
The S&P 500 ended Monday virtually flat, rising just 0.02% to 6389.77, after briefly hitting a new intraday record of 6401.07. Traders showed little reaction to news that the US and European Union had reached a deal to reduce tariffs, choosing instead to focus on the heavy slate of economic and earnings events ahead. The Dow Jones slipped 64 points, or 0.14%, to close at 44,837.56, while the Nasdaq added 0.33% to finish at a record 21,178.58.
President Donald Trump announced Sunday that the US and EU had agreed to lower tariffs to 15%, down from the previously threatened 30%. The president said countries that have not renegotiated trade terms could face a baseline tariff of 15–20%.
Fed decision and earnings storm approach
Markets now turn their attention to the Federal Reserve, which begins its two-day policy meeting Tuesday. While the Fed is expected to hold rates steady at 4.25% to 4.5%, traders will be watching closely for guidance on potential rate cuts at the next meeting in September.
Earnings will also take centre stage this week, with over 150 S&P 500 companies set to report. Tech giants Meta and Microsoft report Wednesday, followed by Apple and Amazon on Thursday. Investors are especially focused on AI-related commentary, looking for signs that heavy cloud infrastructure spending is bearing fruit.
Jobs and data in focus
Friday will bring the July nonfarm payrolls report, expected to show the economy added 102,000 jobs, down from 147,000 in June. Other key data this week includes job openings (JOLTS) on Tuesday, ADP payrolls on Wednesday, and weekly jobless claims on Thursday.
Local outlook
Australian shares are expected to open lower, with SPI 200 futures down 60 points, or 0.7%, to 8606. The Australian dollar fell 0.7% to US65.21¢, while iron ore dropped 2.6% to US$100.65 a tonne. Sandfire Resources will report quarterly results today. In New Zealand, ANZ’s July business confidence survey is due.
