[UNITED STATES] U.S. stock futures edged lower Sunday evening, following a strong performance last week that saw the S&P 500 post its longest winning streak in more than 20 years. Futures linked to the S&P 500 slipped roughly 0.4%, while contracts tied to the Dow Jones Industrial Average and Nasdaq-100 each declined about 0.3%.
The market’s broad benchmark jumped nearly 1.5% on Friday, marking its ninth consecutive day of gains—the longest such streak since November 2004. The rally also erased losses sustained since April 2, when former President Donald Trump announced a new round of retaliatory tariffs. The tech-heavy Nasdaq Composite added 1.5% on Friday, and the Dow climbed nearly 1.4%.
Stronger-than-expected corporate earnings have been a major driver behind the market’s recent strength. According to FactSet, nearly three-quarters of S&P 500 companies reporting so far have topped analysts’ estimates. This earnings momentum has helped counterbalance concerns over global economic softness and trade-related uncertainties. Still, some analysts caution that forward guidance may reflect increasing caution in light of ongoing macroeconomic headwinds.
Hopes for progress on the trade front have also bolstered investor sentiment. Chinese officials have indicated they are considering renewed trade talks with the U.S., and a Wall Street Journal report suggests Beijing may be open to negotiations. However, no formal agreements have been announced thus far.
Attention is also fixed on developments across the Atlantic, as Brexit remains a source of uncertainty. U.K. Prime Minister Boris Johnson continues to face intense pressure to renegotiate terms with the European Union before the October 31 deadline. Any movement—positive or negative—could reverberate through global markets, especially for U.S. firms with significant exposure to Europe.
“This run-up appears to be driven more by enthusiasm than by fundamental changes,” said Ryan Dykmans, chief investment officer at Dunham & Associates Investment Counsel.
Investors are also gearing up for the Federal Reserve’s upcoming policy meeting, which begins Tuesday. According to the CME Group’s FedWatch tool, traders are pricing in just a 3.2% chance of an immediate rate cut. Nonetheless, market participants will be closely watching for any signals from Fed Chair Jerome Powell regarding the economic outlook amid persistent trade tensions.
Some economists expect the central bank to strike a more dovish tone, given recent weakness in manufacturing and business investment. While a cut this week remains unlikely, futures markets still reflect a roughly 70% chance of at least one rate reduction by year’s end. In corporate earnings, On Semiconductor, Tyson Foods, and Loews are scheduled to release quarterly results Monday before the opening bell.
Later in the week, retailers such as Walmart and Macy’s will report, with investors paying close attention to consumer trends. Given the importance of consumer spending to the U.S. economy, any signs of softening demand or margin pressure could stoke fresh concerns about a potential slowdown, particularly as the holiday shopping season nears.
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