US stock futures edge up after Wall St rebounds sharply amid Fed cut bets

U.S. equities saw a sharp rebound on Monday, with the S&P 500 jumping 1.5% and the NASDAQ Composite surging 2%, driven by rising expectations for an imminent Federal Reserve rate cut in September (84% odds) following recent weak jobs data, despite lingering trade tension concerns. Individually, Palantir Technologies shares rose 4.5% in after-hours trading after reporting quarterly revenue exceeding $1 billion for the first time, while Hims & Hers fell over 13% on mixed results. Investors now look ahead to key earnings reports from companies like AMD, Rivian, and Disney later this week.

Analysis

U.S. equity markets demonstrated a significant rebound, with the S&P 500 and NASDAQ Composite climbing 1.5% and 2.0% respectively, driven primarily by a shift in monetary policy expectations. Last week's weaker-than-expected nonfarm payrolls data, while initially fueling economic concerns, has now led markets to price in an 84% probability of a Federal Reserve rate cut by September. This sentiment, however, is contrasted by escalating geopolitical trade risks, including new tariff threats against India and an executive order imposing duties on nearly 70 countries. At the corporate level, performance is divergent; Palantir (PLTR) shares gained significantly after reporting quarterly revenue surpassing $1 billion for the first time, signaling strong operational execution. Conversely, Hims & Hers Health (HIMS) stock fell over 13% on a revenue miss, underscoring the market's intolerance for top-line weakness even with a bottom-line beat. Investor focus now shifts to a heavy slate of upcoming earnings from names like AMD, Rivian, and Disney, which will serve as key catalysts.

Key Decisions for Investors

• Investors should recognize that the current market rally is heavily dependent on the anticipation of a Fed rate cut, making positions vulnerable to any future economic data that contradicts the weak growth narrative or any hawkish central bank commentary.
• It is critical to monitor geopolitical developments, as the announced and threatened tariffs on India and other nations represent a material risk that could quickly undermine the prevailing optimistic sentiment.
• The divergent stock reactions of Palantir and Hims & Hers highlight the need to scrutinize corporate earnings beyond headline figures, placing a premium on strong revenue growth and forward guidance.
• Consider reviewing exposure to AMD, RIVN, CAT, DIS, MCD, and UBER, as these stocks face heightened event-driven volatility with earnings reports scheduled for this week.