S&P 500 rises with EU deal sealed ahead of data, earnings frenzy

US equities extended their climb on Monday as a weekend trade deal with the European Union fueled optimism ahead of a jam-packed week of earnings scorecards from Big Tech, economic data and a Federal Reserve meeting. 

The S&P 500 Index rose 0.1% as of 1:05 p.m. in New York, while the technology-heavy Nasdaq 100 Index rose 0.3%. In individual movers, Samsung Electronics Co. said it would produce AI semiconductors for Tesla Inc. in a $16.5 billion pact. ASML Holding’s US-listed shares climbed following the announcement.

A key trade deal with Europe was sealed over the weekend as President Donald Trump’s self-imposed Aug. 1 tariff deadline nears. The agreement will see the EU accept a 15% tariff on most of its exports to the US while reducing levies on some American products to zero.

Meantime, US and Chinese officials kicked off two days of talks aimed at extending their tariff truce beyond a mid-August deadline and hashing out ways to maintain trade ties while safeguarding economic security.

The S&P 500 is on track for its longest streak of records since 2021 if the US benchmark notches the milestones Monday and Tuesday. 

The development comes as Wall Street heads into a crucial week. The Fed’s rate decision — and commentary on the path ahead — will be the key event, coming alongside a hectic economic calendar that includes readings on gross domestic product, payrolls, consumer spending, and manufacturing.  

Meanwhile, all eyes will be on quarterly results from Microsoft Corp. and Meta Platforms Inc. on Wednesday, and Apple Inc. and Amazon.com Inc. on Thursday.

“With a Central Bank tsunami including, coupled with payrolls, the Fed’s preferred inflation gauge, the Treasury’s quarterly refunding announcement, Trump’s trade deadline, and more than 40% of the S&P 500’s market capitalization reporting, I couldn’t imagine a more headline-packed week ahead for the market,” said Dave Lutz, equity sales trader and macro strategist at JonesTrading. 

In addition to the Fed, the Bank of Japan and Bank of Canada are also meeting this week.

Corporate America appears to be taking Trump’s tariffs in stride so far. With about a third of S&P 500 members having reported, roughly 82% have beaten profit forecasts, on track for the best quarter in about four years, data compiled by Bloomberg Intelligence shows.

The strong earnings season and progress are driving optimism among Wall Street strategists for continued stock-market gains.

Oppenheimer Asset Management sees the S&P 500 notching a third-consecutive year of 20% gains, a feat unseen since the late 1990s. Chief investment strategist John Stoltzfus raised his year-end target for the S&P 500 to 7,100 points from 5,950, the highest among a panel of strategists tracked by Bloomberg. The new forecast implies an 11% upside from Friday’s close.

Meanwhile, Morgan Stanley strategists led by Mike Wilson reiterated that a recovery in earnings revisions is underway, and that they are leaning more toward their 12-month bull-case of 7,200 index points for the US stocks benchmark. 

The S&P 500 is up 28% since hitting a low on April 8, setting a series of record highs over the past few weeks. Even a version of the US benchmark that weights all members equally, rather than by market value, has notched a record.

Those advances have come as fears about the impact of tariffs on the economy ebbed and investors slowly returned to stocks, abandoning an extreme aversion to risk.