Dow Jones futures will kick off on Sunday evening, alongside S&P 500 and Nasdaq futures. This week, attention is riveted on U.S.-China trade negotiations, with hopes mounting for significant tariff reductions.
Despite recent optimism regarding trade, major indexes experienced slight weekly declines, remaining within established ranges. Nevertheless, several leading stocks continue to breakout or signal buying opportunities.
Among the noteworthy performers, Tesla recently surpassed a critical entry point, while Palantir Technologies established a new buy signal. Chinese tech titans Alibaba and Tencent are set to release their earnings this week, both hovering near key early entry levels. Walmart will begin the earnings season for retail, with its stock currently in a favorable position. Additionally, two recent IPOs, CoreWeave—a data center company backed by Nvidia—and aerospace firm Karman, are also in focus.
### U.S.-China Trade Developments
U.S. Treasury Secretary and Trade Representative are scheduled to meet with Chinese Vice Premier in Geneva. Speculation suggests substantial tariff cuts could occur, potentially reducing rates from the current 145% to as low as 50-60%. However, opinions vary, with President Trump indicating that an 80% reduction might be more appropriate. The ultimate decision on tariffs rests with the Treasury.
In related news, Trump announced a preliminary trade agreement with the U.K., which will lower certain duties but retain a baseline tariff of 10% on British goods.
### Market Overview
Futures for the Dow, S&P 500, and Nasdaq 100 are set to open at 6 p.m. ET on Sunday. The direction these futures take will likely reflect developments from the U.S.-China discussions, but remember that overnight movements don’t always indicate the next day’s trading behavior.
The stock market is experiencing a pause after strong gains in previous weeks. Last week, the Dow dipped by 0.2%, the S&P 500 by 0.5%, and the Nasdaq by 0.3%. Despite this, all major indexes are above their 50-day moving averages, even as they lag behind the 200-day marks.
In contrast, the small-cap Russell 2000 managed a slight uptick of 0.1%. Leading stocks are displaying resilience, with many either breaking out or continuing their upward trajectories. Additionally, the 10-year Treasury yield climbed six basis points to 4.37%, and U.S. crude oil futures surged by 4.7% to $61.02 per barrel last week.
### Key Earnings Reports
Alibaba and Tencent are expected to announce their earnings soon, both positioned around their 50-day moving averages. Strong earnings could offer investors potential entry points. While these companies are somewhat insulated from direct tariff impacts, their performance may provide broader insights into the health of the Chinese economy under current trade conditions.
Walmart’s stock has seen a decline but remains above a critical buy point, and insights from its earnings will be crucial in gauging the effects of tariffs. Both CoreWeave and Karman are also set to release their earnings; each company’s performance could act as a signal for potential market moves going forward.
### Monitoring Leading Stocks
Tesla’s stock rose 4.7% on Friday, breaking through significant resistance levels. While still facing overhead challenges, Tesla’s surge can be attributed to optimism surrounding its robotaxi plans, although the company reported a notable decline in earnings for Q1.
Palantir experienced a 5.6% drop last week but has since demonstrated strength, rebounding from key moving averages and confirming a new buy point in its chart. The company has consistently reported robust revenue growth, reinforcing its position within the tech sector.
### Strategic Recommendations
As the market rally unfolds, constructive movements are evident. While recent declines are noteworthy, many leading stocks present viable buying opportunities. Investors considering increasing their exposure should monitor the indexes closely; a decisive breach above the 200-day line could signal a favorable environment for additional investments, while a drop below the 50-day line could warrant a reassessment of positions.
This week’s U.S.-China trade talks are poised to serve as a significant catalyst for market direction. As the earnings season proceeds, keeping an updated watchlist and clearly defining exit strategies will be essential for navigating this dynamic landscape.
Stay informed on market trends and stock movements to remain aligned with potential opportunities.
