U.S.-China trade talks

The deal was the latest in a flurry of pacts the White House has raced to secure before August 1, when heightened "reciprocal" tariffs on a host of countries are due to come into effect.

"In terms of big trade deals yet to be secured, the market will still be on the lookout for deals with Asia (South Korea, Taiwan, India) and perhaps anything new for Mexico and Canada, too," ING analysts said in a note.

With this in mind, the U.S. and China are expected to continue their latest round of trade talks in Sweden on Tuesday, with Beijing facing an August 12 deadline to reach a longer-lasting tariff agreement with Washington.

Both sides had previously agreed on preliminary trade pacts earlier this year which cooled an intensifying trade war marked by rapidly escalating tit-for-tat tariffs and the squeezing-off of crucial rare earth minerals exports.

Fed meeting starts

The Fed kicks off its two-day policy meeting later in the session. While rates are expected to stay at 4.25%–4.5% when the announcement is made on Wednesday, investors will watch closely for signals on a possible cut later this year.

Fed chair Jerome Powell has recommended a wait-and-see attitude as the policymakers await more clarity around the impact of the Trump administration’s aggressive tariff agenda, but there have been signs of dissent within the FOMC, with a couple of members recently calling for lower rates.

U.S. President Donald Trump on Monday again called on the Federal Reserve to cut interest rates, saying it would help propel the U.S. economy. 

The Bank of Japan also holds a key meeting on Thursday, where it is expected to keep rates unchanged.

Tariffs and their inflation impact will be in focus Thursday with the release of June’s PCE price index, the Fed’s preferred inflation gauge.

Investors will also watch key labor data this week, including JOLTS Job Openings later in the session, ADP private payrolls on Wednesday, jobless claims on Thursday, and the key July jobs report on Friday.

"Magnificent Seven" earnings due

Investors are also gearing up for the busiest week of the earnings season, with more than 150 companies in the S&P 500 due to post their quarterly results.

This includes “Magnificent Seven” members, Facebook-owner Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.

Prior to Tuesday’s opening bell on Wall Street, numbers are expected to be released from a host of firms, including drugmaker Merck (NYSE:MRK), healthcare giant Unitedhealth (NYSE:UNH) and jetmaker Boeing (NYSE:BA). Consumer goods titan Procter & Gamble (NYSE:PG), which announced the departure of CEO Jon Moeller on Monday, is also slated to report.

Visa (NYSE:V) will highlight the docket of returns after U.S. markets close. 

Crude rises once more

Oil prices rose Tuesday ahead of the start of the latest Fed meeting in the aftermath of the trade agreement between the U.S. and the European Union.

At 05:55 ET, Brent futures gained 0.6% to $69.74 a barrel, and U.S. West Texas Intermediate crude futures traded 0.7% higher to $67.19 a barrel.

Both contracts settled more than 2% higher in the previous session, with Brent touching its highest level since July 18, after the U.S./EU deal sidestepped a full-blown trade war between the two major allies that would have dimmed the outlook for fuel demand.

The agreement also calls for $750 billion of EU purchases of U.S. energy in the coming years.