Dow futures received a major bump on Monday as the US President indicated a softer stance of geopolitical tensions. Just hours before Wall Street is set to open, Dow futures are trading 450 points up.
The futures tied to S&P 500 futures and Nasdaq-100 futures also displayed gains on Monday as they climbed 1.3% and 1.9%, respectively.
The spike followed volatile trading and a major sell-off on Friday, when Trump’s previous threats of escalating tariffs had rattled markets and led to sharp losses.
The rebound came after the US President assured the world that the situation with China “will all be fine.” It came as a major relief for investors who are already facing massive uncertainties over the government shutdown.
5 things to know before Wall Street opens
1. The US government shutdown hit day 13 on Monday, and there’s still no end in sight.
Congress is completely stuck: Democrats want to tack on extended Affordable Care Act subsidies to any funding bill, while Republicans are saying the government needs to reopen first before even discussing healthcare.
Meanwhile, the effects are starting to hit hard. About 750,000 federal workers are furloughed, all 21 Smithsonian museums and the National Zoo are closed, and airlines are dealing with more delays because there aren’t enough air traffic controllers.
On the money side, President Trump said the military will get paid by October 15 using research and development funds.
But for lots of other federal workers, it’s getting worse as thousands are being laid off, not just furloughed.
2. The investors are cheering a certain calm in geopolitical conflicts with Hamas releasing all Israeli hostages on Monday, as part of a US-brokered ceasefire agreement.
The hostages, primarily young men, were handed over to the International Red Cross and then to Israeli authorities for reunification with families and medical evaluation.
In exchange, Israel freed nearly 2,000 Palestinian prisoners, signaling cautious optimism for lasting peace.
3. The premarket trading on Monday is displaying some big action as chip stocks are doing really well.
AMD shares rose by 4.2% in premarket trading, driven by the continued investor optimism following its strategic multibillion-dollar AI chip partnership with OpenAI.
Nvidia stock isn’t far behind, climbing 3.4% thanks to the overall momentum in the semiconductor sector.
Over at Oracle, shares jumped 2% in premarket trading, but slipped back to red by press time.
4. Wall Street kicks off third-quarter earnings season this week, and expectations are pretty high.
The big banks, like JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo, are all reporting starting Tuesday.
Analysts are expecting S&P 500 companies to post around 7.9% to 8.8% growth compared to last year, which would be the ninth straight quarter of rising profits.
Even with geopolitical uncertainties and the government shutdown causing some delays in data, investors are staying upbeat, especially when it comes to investment banking, trading, and tech companies.
5. Amid all glaring uncertainties, the global markets are treading with caution and remained mixed on Monday.
Asian markets opened lower, led by Hong Kong’s Hang Seng dropping 2.1%, Shanghai Composite dipping 0.2%, and South Korea’s Kospi declining 1.3%, as worries resurfaced over potential tariff escalations and export restrictions by China.
Japan’s market was closed for a holiday.
Meanwhile, European stocks steadied, with the STOXX 600 rising 0.6% and major indexes like France’s CAC 40 and Germany’s DAX gaining around 0.7%, supported by a rebound in tech and mining sectors amid easing geopolitical concerns.
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