Investors are adopting a cautious stance across global markets as they await a high-level trade meeting between the United States and China scheduled in London today. The market pause comes at the start of a week packed with crucial economic events and fresh inflation data, with traders closely watching what outcomes might emerge from this pivotal discussion.
Early Monday saw slight moves in the U.S. Treasury market, reflecting investor caution. The 10-year Treasury yield dipped by 1 basis point to 4.50%, the 2-year yield fell 3 basis points to 4.01%, while the 30-year yield remained steady at 4.97%. Given the inverse relationship between bond yields and prices, these small changes underscore heightened market sensitivity.
Meanwhile, Asian markets climbed during overnight trading, buoyed by optimism surrounding the upcoming U.S.-China meeting and new Chinese trade and inflation figures. However, U.S. equity futures showed muted reactions: S&P 500 futures slipped 0.1%, Nasdaq 100 futures declined 0.2%, and Dow Jones futures fell 45 points (0.1%). These modest declines followed two consecutive weeks of strong gains across all three indexes.
The S&P 500, which recently surpassed the 6,000 level for the first time since February 21, now sits less than 3% below its all-time closing high. Yet, traders are holding back rather than pushing prices higher.
Chris Verrone, chief market strategist at Strategas, told CNBC’s Closing Bell on Friday that while the market remains largely constructive, the current environment is characterized by caution. “The market is saying ignore the softer economic data,” he explained, noting that cyclical stocks are outperforming defensive sectors—a sign the economy is “largely OK.”
In Europe, futures point to a modestly positive open with London’s FTSE expected to rise 7 points to 8,836, Germany’s DAX up 3 points at 24,296, France’s CAC 40 gaining 5 points at 7,801, and Italy’s FTSE MIB edging 13 points higher to 40,595.
The week ahead is loaded with major events. Apple’s 2025 Worldwide Developers Conference kicks off Monday amid a challenging year for the tech giant, whose stock has fallen over 18% since January. Investors will be watching closely for any announcements that could boost confidence.
Midweek brings the U.S. Consumer Price Index (CPI) release on Wednesday, followed by the Producer Price Index (PPI) on Friday. These inflation reports will provide critical insights into the impact of tariffs and supply chain pressures on prices. Consumer sentiment data from the University of Michigan is also due Friday, including inflation expectations.
Gold prices remained mostly flat Monday morning, with spot gold nudging up 0.1% to $3,313.54 per ounce and U.S. gold futures slipping 0.4% to $3,333.80 as of 0543 GMT. Analysts suggest investors are waiting for clearer direction from the London trade talks. Technical analyst Wang Tao of Reuters notes that gold may test support at $3,296; if breached, the metal could fall toward $3,262.
Bitcoin mirrored the cautious mood, holding steady above $105,000 with a modest 0.1% gain over the past 24 hours, trading at $105,616 by press time. Like many markets, it appears to be in wait-and-see mode ahead of the week’s key developments.
