September S&P 500 E-Mini futures (ESU25) are up +0.47%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.70% this morning, pointing to a higher open on Wall Street amid optimism over progress in trade negotiations between the U.S. and key partners.

Japan’s top trade negotiator, Ryosei Akazawa, extended his stay in the U.S. for further talks, stating that negotiations have reached “a critical juncture.” Also, Bloomberg reported that India’s trade delegation prolonged its stay in Washington to iron out differences as both sides aim to finalize a deal ahead of the July 9th deadline. In addition, Canada withdrew its digital services tax on tech firms in an effort to restart trade negotiations with the U.S. Taiwan also said it has made “constructive progress” during a second round of trade negotiations with the U.S. Finally, French Finance Minister Eric Lombard stated that the European Union could reach some type of trade deal with the U.S. ahead of the July 9th deadline. 

This week, investors look ahead to remarks from Federal Reserve Chair Jerome Powell and a raft of U.S. economic data, with a particular focus on the nonfarm payrolls report.

In Friday’s trading session, Wall Street’s major equity averages ended in the green, with the S&P 500 and Nasdaq 100 notching new all-time highs. Nike (NKE) surged over +15% and was the top percentage gainer on the S&P 500 and Dow after the sportswear company posted better-than-expected FQ4 results and said it expects the decline in sales and margins to ease in the current quarter. Also, Boeing (BA) climbed more than +5% after Redburn upgraded the stock to Buy from Neutral with a price target of $275. In addition, Alphabet (GOOGL) rose over +2% after Citizens JMP upgraded the stock to Outperform from Market Perform with a price target of $220. On the bearish side, Palantir Technologies (PLTR) slumped more than -9% and was the top percentage loser on the S&P 500 and Nasdaq 100 after Canada announced a tax on digital business from the U.S. 

Data from the U.S. Department of Commerce released on Friday showed that the core PCE price index, a key inflation gauge monitored by the Fed, came in at +0.2% m/m and +2.7% y/y in May, stronger than expectations of +0.1% m/m and +2.6% y/y. Also, U.S. May personal spending unexpectedly fell -0.1% m/m, weaker than expectations of +0.1% m/m, and personal income unexpectedly fell -0.4% m/m, weaker than expectations of +0.3% m/m. At the same time, the University of Michigan’s U.S. June consumer sentiment index was unexpectedly revised higher to 60.7, stronger than expectations of 60.4.

Minneapolis Fed President Neel Kashkari said on Friday that he expects two 25-basis-point rate cuts to be likely this year, with the first possibly coming in September, but cautioned that tariffs could have a lagging effect on inflation and that officials should remain flexible.

U.S. rate futures have priced in a 78.8% probability of no rate change and a 21.2% chance of a 25 basis point rate cut at the next FOMC meeting in July.

In this holiday-shortened week, the U.S. June Nonfarm Payrolls report will be the main highlight, as signs of a weak labor market could bolster expectations that the Federal Reserve could lower interest rates sooner. The report is released on Thursday this month due to the U.S. Independence Day holiday falling on Friday. Ahead of the key jobs report, investors will monitor JOLTs job openings data for May on Tuesday and ADP private payrolls figures for June on Wednesday for further insights into the health of the U.S. job market. Other noteworthy data releases include the U.S. ISM Manufacturing PMI, the S&P Global Manufacturing PMI, Construction Spending, Average Hourly Earnings, Initial Jobless Claims, Trade Balance, the Unemployment Rate, the S&P Global Composite PMI, the S&P Global Services PMI, Factory Orders, and the ISM Non-Manufacturing PMI.

“The Fed would likely need to see clearer evidence of softness in the form of subdued payrolls growth and a rising unemployment rate to trigger an early move,” ING chief international economist James Knightley said in a note.

Market watchers will also be focused on remarks from Fed Chair Jerome Powell, who is set to participate in the European Central Bank’s annual forum in Sintra, Portugal, this week. Mr. Powell will speak on a panel alongside his counterparts from the Eurozone, Japan, South Korea, and the U.K.

In addition, President Trump’s “One Big Beautiful Bill” will be in the spotlight. Negotiations over Trump’s tax-cut bill are ongoing as Republicans work to persuade remaining holdouts to back it for final passage. The president has demanded that Congress send him the bill by July 4th. The House also needs to vote on the latest version of the legislation before it can be sent to the White House for Trump’s signature.

Meanwhile, the U.S. stock markets will close early at 1 p.m. Eastern Time on Thursday and remain closed on Friday for the Independence Day holiday.

Today, investors will focus on the U.S. Chicago PMI, which is set to be released in a couple of hours. Economists, on average, forecast that the Chicago PMI will stand at 42.7 in June, compared to the previous value of 40.5.

Also, market participants will be anticipating speeches from Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.254%, down -0.09%.

The Euro Stoxx 50 Index is down -0.24% this morning, giving up earlier gains and halting a tentative rally that had been driven by trade optimism. Bank stocks lost ground on Monday, while defense stocks outperformed. Data from the Office for National Statistics released on Monday showed that Britain’s economy expanded 0.7% in the first quarter, confirming a preliminary estimate. Separately, data from the Federal Statistical Office showed that Germany’s monthly retail sales unexpectedly fell in May, dampening expectations for solid growth in the second quarter for Europe’s largest economy. In addition, preliminary data showed that Italy’s annual inflation rate rose to 1.7% in June from 1.6% in the previous month. Investors now await preliminary inflation data from Germany due later in the session. Meanwhile, the U.K. government announced on Monday that the trade agreement lowering U.S. tariffs on British cars and aircraft parts has officially taken effect. Also, French Finance Minister Eric Lombard stated that the European Union could reach some type of trade deal with the U.S. ahead of the July 9th deadline. In other news, data from the European Central Bank showed that lending growth across the Eurozone was largely unchanged in May, suggesting that the support from the central bank’s series of rate cuts was offset by deteriorating economic sentiment. In corporate news, STMicroelectronics (STMPA.FP) rose over +2% after JPMorgan added the chipmaker to its positive catalyst watch.

U.K. GDP, Germany’s Retail Sales, and Italy’s CPI (preliminary) data were released today.

U.K. GDP has been reported at +0.7% q/q and +1.3% y/y in the first quarter, in line with expectations.

The German May Retail Sales arrived at -1.6% m/m and +1.6% y/y, weaker than expectations of +0.5% m/m and +3.3% y/y.

The Italian June CPI came in at +0.2% m/m and +1.7% y/y, compared to expectations of +0.1% m/m and +1.7% y/y.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.59%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.84%.

China’s Shanghai Composite Index closed higher today, boosted by defense and chip stocks, while investors digested the latest PMI data from the country. Data from the National Bureau of Statistics released on Monday showed that China’s manufacturing activity contracted for the third consecutive month in June, albeit at a slower rate, as trade tensions with the U.S. continued to pressure the world’s second-largest economy. The reading came on the heels of a series of data indicating that China’s economy lost some momentum in May, weighed down by the remaining U.S. tariffs on Chinese goods despite the trade truce. At the same time, an official survey revealed that China’s non-manufacturing PMI, covering both service and construction activity, grew to a 3-month high in June. Meanwhile, economists say Chinese policymakers appear content with the economy’s performance so far this year. Chinese Premier Li Qiang said last week that economic indicators continued to improve in the second quarter despite external challenges. Also, the People’s Bank of China issued a more upbeat assessment of the economy following its latest policy meeting, stating that it is displaying positive momentum and that confidence is improving. However, with deflationary pressures persisting and the labor market under stress, analysts are debating whether officials will introduce new measures to support growth over the next three months. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said, “The Politburo meeting later this month will shed light on how the policymakers think about these macro issues.”

The Chinese June Manufacturing PMI came in at 49.7, stronger than expectations of 49.6.

The Chinese June Non-Manufacturing PMI stood at 50.5, stronger than expectations of 50.3.

Japan’s Nikkei 225 Stock Index closed higher and hit a more than 11-month high today, tracking Friday’s gains on Wall Street. Technology and internet-related stocks outperformed on Monday. At the same time, automobile stocks slumped after U.S. President Donald Trump stated in a Sunday interview that Japan engages in “unfair” automobile trade with the U.S. Trump said that Japan should boost its imports of U.S. energy resources and other products to help narrow the U.S. trade deficit. Meanwhile, government data released on Monday showed that Japanese factory output rebounded much less than expected in May, as sweeping U.S. tariffs threatened to undermine the country’s already fragile economic recovery. Output is expected to weaken in the months ahead as Trump’s tariffs weigh on exports and Japanese companies grow more cautious about their capital spending. Japan’s top trade negotiator, Ryosei Akazawa, said in a social media post on Monday that both countries have agreed to continue trade talks and that negotiations have reached “a critical juncture.” Still, many analysts believe it will be difficult for Japan to secure a full exemption from U.S. tariffs. In other news, a private think tank survey revealed on Monday that Japanese households will see no relief from rising living costs, with the number of food items expected to see price hikes in July projected to surge fivefold. Despite persistent inflationary pressures, many analysts anticipate that the Bank of Japan will keep monetary policy steady for the remainder of the year amid tariff concerns. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +5.58% to 24.59.

The Japanese May Industrial Production (preliminary) arrived at +0.5% m/m, weaker than expectations of +3.4% m/m.

The Japanese May Housing Starts tumbled -34.4% y/y, weaker than expectations of -15.0% y/y.

Pre-Market U.S. Stock Movers

Heavyweight technology stocks are moving higher in pre-market trading after Canada withdrew its digital services tax on U.S. tech firms. Meta Platforms (META) and Alphabet (GOOGL) are up over +1%.

Shares of big U.S. banks advanced in pre-market trading after the Fed’s annual stress test results showed that the largest U.S. lenders are well-positioned to weather a sharp economic downturn. The outcome suggests that banks are likely to announce plans to return more capital to shareholders in the coming days. Wells Fargo (WFC), Bank of America (BAC), and Goldman Sachs (GS) are up more than +1%.

Juniper Networks (JNPR) climbed over +8% in pre-market trading after the Justice Department settled a lawsuit opposing Hewlett Packard Enterprise’s $14 billion acquisition of the company.

Oracle (ORCL) rose more than +1% in pre-market trading after Stifel upgraded the stock to Buy from Hold with a price target of $250.

Enphase Energy (ENPH) fell over -3% in pre-market trading after the Senate’s latest version of the tax-and-spending bill included a provision to phase out tax credits for large-scale wind and solar projects by the end of 2027.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - June 30th

Progress (PRGS), IGC Pharma (IGC).