Weekly Market Preview: Trade Deal Optimism Lifts Sentiment Ahead of Key Economic Events

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Index Update:  U.S. stock futures rose following a new trade agreement between the U.S. and EU, which reduced proposed tariffs. Investors are gearing up for a busy week featuring major corporate earnings, a Federal Reserve policy decision, and key economic data. While the Fed is expected to keep interest rates unchanged, attention will be on any hints about future cuts. Upcoming inflation and labor market reports, including the PCE index and monthly jobs data, will also be closely watched for their policy implications.

Market Movers:  On Friday, the top gainers were Mill City Ventures III, Ltd (+218.92%), followed by SMX (Security Matters) Public Limite (+89.29%). On the contrary Carter's, Inc. (-19.69%) and Liberty Broadband Corporation (-19.14%) declined the most the same day.

Commodities Update:  Crude oil prices climbed, with WTI nearing $65.6 and Brent approaching $69 per barrel, following a newly announced U.S.-EU trade agreement that eased tariff threats. The deal, which imposes a 15% tariff on most European goods, boosted market optimism and raised expectations for stronger global crude demand. Investors are also watching for developments in U.S.-China trade talks and upcoming OPEC production estimates, which could shed light on output trends among members participating in voluntary cuts. Gold prices stabilized around $3,340 after erasing earlier gains, weighed down by a stronger U.S. dollar following the trade deal. Market attention has turned to ongoing U.S.-China trade negotiations and the Federal Reserve’s upcoming policy announcement. Additionally, investors are closely monitoring key U.S. economic data—including jobs reports and inflation indicators—for signs of future interest rate movements and potential inflation driven by tariffs.

Macro Update:  The U.S. and EU reached a trade agreement to avoid a potential trade war, settling on a 15% tariff for most EU exports, including cars. Announced by President Trump and EU Commission President von der Leyen, the deal aims to bring stability and predictability. While some details remain unclear, the EU committed to major U.S. energy purchases, investments, and expanded market access for U.S. goods. Discrepancies remain over whether pharmaceuticals and metals are included, and decisions on wine and spirits are still pending.

Bonds Commentary:  The 10-year U.S. Treasury yield held steady around 4.39% as investors awaited key economic data and the Federal Reserve's policy decision. While the Fed is expected to keep rates unchanged, markets are looking for signals on a potential September cut. Focus is also on the upcoming PCE inflation report and labor market data, as well as easing trade tensions following the new U.S.-EU tariff agreement.

Dollar Commentary:  The U.S. dollar index rose to 98, its highest in nearly a week, as easing trade tensions boosted sentiment following a new U.S.-EU trade deal. Markets are also watching upcoming U.S.-China trade talks, with expectations of a truce extension. Attention now shifts to the Federal Reserve’s policy decision and a series of key economic reports, including GDP, PCE inflation, and jobs data, which may provide further clarity on the economic impact of recent tariffs.

Futures Update:  U.S. equity futures moved higher, supported by optimism following a U.S./EU trade agreement. Investor sentiment was also lifted ahead of a key week featuring major earnings reports, economic data releases, and central bank announcements. The S&P 500 and Nasdaq Composite recently closed at record highs, driven by strong corporate earnings and increased clarity on U.S. trade policies.

The major U.S. stock indices delivered strong performances on the final day of the trading week, with the Dow reversing losses from the previous session and the NASDAQ and S&P 500 reaching new all-time highs. The S&P 500 increased by 25.29 points, or 0.40%, closing at 6,388.64. From a technical standpoint, after a period of consolidation, prices are starting to trend upward, suggesting the potential for further gains. The 14-period Relative Strength Index (RSI) remains in overbought territory, but unless a divergence triggers a reversal, the upward momentum may continue. Despite this, key moving averages are still well below current levels, offering support if volatility increases. Important support levels are around 6,320, with resistance expected near 6,466.