Stock market today: Dow, S&P 500, Nasdaq nudge higher as Trump-EU trade deal kicks off huge week

US equities saw modest gains on Monday, primarily driven by a new US-EU trade pact that sets a 15% tariff on European goods and includes a $750 billion EU commitment to US energy purchases, boosting sectors like chips and LNG. Investor focus is now shifting to a packed week featuring critical Big Tech earnings (Meta, Microsoft, Amazon, Apple), the Federal Reserve's policy meeting with rate cut speculation, and key July inflation and jobs reports, all poised to significantly influence market sentiment.

Analysis

US equity markets began the week with modest gains, led by the S&P 500 and Nasdaq which rose approximately 0.2% and 0.3% respectively, following a new US-EU trade agreement. This pact, which sets a baseline 15% tariff on European goods and includes a significant $750 billion EU commitment to purchase US energy, has provided a near-term boost to market sentiment and specific sectors. Semiconductor stocks rallied on the news, with AMD climbing over 4% and Super Micro Computer spiking over 6%, while the broader sector also benefited from reports of a potential US-China tariff truce extension. Further corporate-specific catalysts included a $16.5 billion deal for Samsung to supply AI chips to Tesla, boosting both stocks, and a 4% premarket jump in Nike shares after a JPMorgan upgrade raised its price target to $93 from $64. US LNG exporters like Cheniere Energy also saw gains of around 3% on the EU's energy purchase pledge. However, this initial optimism is tempered by a week heavy with market-moving events, including earnings from over 150 S&P 500 companies, headlined by Meta, Microsoft, Apple, and Amazon. Concurrently, the Federal Reserve's policy meeting is expected to hold rates steady at 4.25%-4.50%, but investor focus will be on any forward guidance signaling a potential September rate cut. Critical economic data, including the Fed's preferred PCE inflation gauge and the July jobs report, will further shape the market's trajectory.

Key Decisions for Investors

• Consider exposure to direct beneficiaries of the US-EU trade pact, specifically in the semiconductor sector (AMD, ASML) and US liquefied natural gas exporters (LNG, NEXT) which are reacting positively to reduced tariff risk and new purchase commitments.
• Prepare for increased market volatility as sentiment will be heavily influenced by this week's confluence of Big Tech earnings, the Federal Reserve's forward guidance on interest rates, and key macroeconomic data like the PCE inflation index and the July jobs report.
• For single-stock strategies, evaluate the fundamental drivers behind specific catalysts, such as the sustainability of Nike's rally following its significant JPMorgan price target upgrade and the long-term impact of the $16.5 billion Samsung-Tesla AI chip agreement.
• Monitor the currency markets, as the US dollar's 0.6% gain against a weakening euro indicates the trade deal is perceived as more favorable for the US, which could impact multinational corporate earnings and international portfolio returns.