Where Are Markets Today?

Futures are up in European and US markets today on the strength of improved trade sentiment and good regional economic news. European markets are to rise in the day ahead: Germany’s DAX is 0.3% higher to 24,104, France’s CAC 40 is up 0.3% to 7,709, Italy’s FTSE MIB is 0.2% higher to 39,911, while London’s FTSE 100 is to open flat at 8,794. In the US, stock markets are also to gain further momentum: S&P 500 futures are 0.4% higher, Nasdaq 100 futures are up 0.55%, and Dow futures are up 253, or 0.57%. The stronger positioning comes after last month’s rally on the back of easing tariffs concerns and stabilizing macroeconomic indicators.

The positive momentum is a response to relief among investors that some of the most aggressive trade measures expected earlier in the year have failed to materialize. Even as negotiations around the world drag on, the tone in Washington and Beijing has moderated, which for the moment points to diplomacy trumping confrontation. All of this is on top of positive news out of the Asia-Pacific region—Japan's May industrial production and China's June manufacturing activity—which has demonstrated resilience in key export economies, which further boosted early European trade optimism.

For the U.S., June has been a fantastic bounce-back month. The S&P 500 is up 4.4%, Nasdaq has gained nearly 6.1%, and the Dow has gained 3.7% month-to-date. Friday's session surpassed that rally with a new record high on the S&P 500 of 6,173.07, wiping out its previous four-month-ago high. Investors appear to be welcoming a rebalancing of risk, with inflation concerns easing slightly and equity inflows starting back up in tech and industrial spaces. Collectively, markets are riding a wave of re-set expectations. The less hawkish language from the Trump administration regarding tariffs, and improved manufacturing readings across the world, are setting the stage for a positive week launch. Issues still exist, most obviously in trade negotiations, and geopolitical hotspots, but investor mood is tilted positive—for now.

Major Index Performance - To Date

• S&P 500: ~4,100 – Holding on to recent gains despite lackluster breadth and tech-led market action. The CFD index US 500 is an important to keep an eye.
• Nasdaq Composite: ~13,250 – Registering a modest pullback as mega-caps see some short-term profit-taking
• Russell 2000: ~1,800 – Lagging small-cap rally, because of continued risk aversion and liquidity prudence
• Dow Jones Industrial Average: ~33,700 – Flat but unimpressive, with cyclical softness supported by defensive stocks. The CFD index US 30 is also an important index to keep an eye to monitor the wide market movement  

The Magnificent Seven and the S&P 500

Technology remains the S&P 500 rally pivot for recent sessions, and cracks only appear at the edges. The "Magnificent Seven" cohort led by Apple, Microsoft, and Nvidia have propelled the index's +4% YTD advance but are experiencing profit-taking selling as traders book profits ahead of July central bank meetings. Increased sector participation remains skewed, with growth stocks lagging defensive resilience.

Drivers Behind the Market 

The European and American markets are expected to open more robustly today, supported by a variety of reasons that reflect a wise rebalancing of risk and sentiment.

1. New Trade Optimism & Deferred Tariff Threats

Resumed U.S.–Canada trade negotiations, with Canada agreeing to delay implementation of its digital services tax, have pushed the negotiating timeframe beyond the earlier July 9 deadline estimate. This is a relaxation of trade tension and is helping to support investor sentiment. Delaying the tax permits extra time for negotiations and removes an imminent overhang from tech and multinational equities.

2. Trump Geopolitical Narrative

President Trump's run of tweets—effusing on the success of US military activity in Iran and lauding Israeli leadership while vilifying the judiciary and the press—has injected geopolitics into markets. Although the tweets have not elicited pure risk aversion, they have inspired demand for protection of assets like gold and oil stocks, creating near-term uncertainty and warranting a conservative trading approach.

3. Macro indicators across Asia & Europe 

Some positive news from Asia, including a China June manufacturing activity print that surprised on the upside and Japanese May industrial production rising, has fueled the global growth narrative. The European spotlight is on ECB President Lagarde's speech and the first release of German CPI. Any dovish Lagarde speech or less-than-anticipated inflation print would ease eurozone rate pressure and be further bullish for equities, particularly rate-sensitive ones.