In a Busy Earnings Week, U.S Stock Futures Climb

U.S. stock futures edged higher on Monday as investors geared up for a pivotal week of earnings reports, with closely watched results expected from Tesla and Alphabet. Meanwhile, Japan’s yen strengthened after the country’s prime minister reaffirmed his leadership position despite a recent electoral setback.

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Futures for the S&P 500 rose by 0.3%, while Europe’s Stoxx 600 Index held steady with minimal change. Among individual stocks, Stellantis NV declined by 1.5% after reporting a first-half loss attributed to restructuring charges, slower vehicle sales, and the impact of U.S. tariffs. In contrast, Ryanair Holdings Plc surged 6.4% on the back of strong quarterly earnings. On the currency front, the yen appreciated 0.6% against the dollar, which fell modestly.

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With U.S. equities still trading near record levels, investors are turning their attention to a packed earnings calendar for insight into how companies are faring amid global economic uncertainties and persistent tariff risks. Roughly 20% of the S&P 500’s total market cap is represented by companies reporting their latest results this week, adding weight to the upcoming releases.

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According to Max Kettner, HSBC Holdings Plc’s chief multi-asset strategist, there’s still room for U.S. equities to gain ground, especially considering how low expectations were heading into the current earnings season. Speaking on Bloomberg TV, Kettner said, “We entered this season with the bar set quite low. There’s still some upside left, particularly in U.S. markets.”

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Investors are particularly focused on Tesla and Alphabet, both of which are set to report earnings on Wednesday. Other notable names on the docket include Lockheed Martin and Coca-Cola, which are scheduled to release their results on Tuesday.

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Strategists at Morgan Stanley are maintaining a bullish stance on U.S. equities, pointing to continued market strength and encouraging early earnings results. Goldman Sachs echoed this sentiment, highlighting that the reporting season has begun on solid footing. However, the same can’t be said for Europe. According to Bloomberg Intelligence, European companies in the MSCI Europe Index are expected to report a 4.6% drop in earnings, though this is slightly better than analysts had predicted.

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Despite the optimism in some quarters, concerns are mounting over whether the U.S. and its trade partners can come to terms before the August 1 tariff deadline. Negotiators from the European Union and the United States are heading into another round of high-stakes talks this week, as they try to resolve ongoing disputes and avoid additional trade friction.

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Nannette Hechler-Fayd’herbe, the chief investment officer for the EMEA region at Lombard Odier, cautioned that the market might be underestimating the risks. “There’s a bit of complacency in how the market is responding,” she said, referring to investor confidence despite unresolved trade issues.

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In the bond market, U.S. Treasuries continued their rally for a fourth straight session, pushing the yield on 10-year notes down by four basis points. Meanwhile, the dollar weakened, with a key index tracking its strength falling by 0.2%.

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As the July 30 Federal Reserve meeting approaches, speculation remains about the central bank's future policy moves. While President Trump has repeatedly criticized Fed Chair Jerome Powell and even threatened his removal, Barclays strategists, including Themistoklis Fiotakis, said such an outcome is unlikely. In a note to clients, they emphasized that even if Powell were replaced, it would still be difficult to convince other Fed governors to support rate cuts unless justified by economic conditions.

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In Japan, political developments offered some reassurance to markets. Prime Minister Shigeru Ishiba confirmed that he would remain in office following his party’s disappointing election results. His decision is being seen as a sign that current fiscal policies — including spending plans and efforts to secure a trade agreement with the United States — will remain intact.

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Leading up to the vote, concerns that a poor showing would lead to leadership changes had weighed on Japanese assets. The yen had weakened for two weeks, and bond yields rose on fears of potential tax cuts and increased spending under new leadership. With Ishiba staying in power, markets are now expecting a more stable policy environment moving forward.

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As investors brace for a high-impact week filled with earnings announcements, trade discussions, and central bank speculation, market sentiment hangs in a delicate balance — buoyed by strong equity performance but shadowed by lingering geopolitical and policy uncertainty.

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