September S&P 500 E-Mini futures (ESU25) are up +0.19%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.08% this morning, pointing to a slightly higher open on Wall Street amid optimism ahead of a widely expected interest rate cut from the Federal Reserve later this week.

Futures on the Nasdaq 100 underperformed as Nvidia (NVDA) fell over -2% in pre-market trading after China’s market regulator said in a preliminary probe that the chipmaker had violated the country’s anti-monopoly laws.

Investors also await a fresh batch of U.S. economic data this week, with a particular focus on the retail sales report.

In Friday’s trading session, Wall Street’s major equity averages ended mixed. Arista Networks (ANET) slumped over -8% and was the top percentage loser on the S&P 500 after the company’s long-term projections failed to impress investors. Also, shares of vaccine makers retreated after the Washington Post reported that U.S. health officials plan to link Covid shots to the deaths of 25 children, with Moderna (MRNA) and BioNTech SE (BNTX) sliding more than -7%. In addition, RH (RH) fell over -4% after the home furnishings retailer reported downbeat Q2 results and cut its full-year revenue growth guidance. On the bullish side, Warner Bros. Discovery (WBD) surged more than +16% and was the top percentage gainer on the S&P 500 and Nasdaq 100, extending Thursday’s gains after the Wall Street Journal reported that Paramount Skydance was preparing a majority cash bid for the entertainment giant.

Economic data released on Friday showed that the University of Michigan’s preliminary U.S. consumer sentiment index unexpectedly fell to a 4-month low of 55.4 in September, weaker than expectations of 58.2. Also, the University of Michigan’s U.S. September year-ahead inflation expectations were unchanged from August at 4.8%, in line with expectations, while 5-year implied inflation expectations unexpectedly increased to 3.9%, higher than expectations of 3.4%.

“The Fed is pulled in opposite directions by rising inflation on the one hand and a weak job market on the other. The Fed can be expected to cut rates further in the coming months; the question is how much, not if,” said Bill Adams at Comerica Bank.

The U.S. Federal Reserve’s interest rate decision and Chair Jerome Powell’s post-policy meeting press conference will take center stage this week. The central bank is widely expected to cut the Fed funds rate by 25 basis points to a range of 4.00% to 4.25%. However, there’s also a small chance that a larger 50 basis point cut could occur. Investors will scrutinize remarks from Mr. Powell for any indications on how quickly rates may fall from here. Following recent data painting a picture of a slowing labor market, U.S. money markets have almost fully priced in follow-up rate cuts in October and December. Market watchers will also closely parse the Fed’s quarterly “dot plot” in its Summary of Economic Projections, which will offer key guidance on how policymakers expect the interest-rate path to unfold over the next few years.

“Despite inflation running above the Fed’s 2% target, [recent] weaker-than-expected nonfarm payroll figures, coupled with revised data showing 911,000 fewer jobs created in the 12 months to March, have strengthened the likelihood of monetary policy easing,” said Richard Flax, chief investment officer at Moneyfarm.

Investors will also keep an eye on U.S. economic data this week. The retail sales report for August will be the main highlight, as it will provide insight into the state of consumer spending. Other noteworthy data releases include U.S. Industrial Production, Manufacturing Production, the Export Price Index, the Import Price Index, Building Permits (preliminary), Housing Starts, Initial Jobless Claims, the Philadelphia Fed Manufacturing Index, and the Conference Board’s Leading Economic Index.

In addition, several notable companies, including shipping giant FedEx (FDX), homebuilder Lennar (LEN), and cereal maker General Mills (GIS), are scheduled to release their quarterly results this week.

Meanwhile, Meta CEO Mark Zuckerberg will open the company’s annual Meta Connect conference on Wednesday evening, where the Facebook parent is expected to highlight product offerings such as its AI glasses.

On the trade front, U.S.-China talks on trade, the economy, and the status of ByteDance’s TikTok began on Sunday in Madrid. U.S. Treasury Secretary Scott Bessent said that the U.S. is nearing a deal with China regarding TikTok. The talks resumed on Monday.

Today, investors will focus on the Empire State Manufacturing Index, which is set to be released in a couple of hours. Economists foresee the September figure coming in at 4.30, compared to 11.90 in August.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.064%, up +0.12%.

The Euro Stoxx 50 Index is up +0.67% this morning, starting the week on an upbeat note as investors brace for an almost certain rate cut by the Federal Reserve. Defense stocks outperformed on Monday amid limited progress in efforts to end the war in Ukraine. Bank and luxury stocks also advanced. Data from Eurostat released on Monday showed that European exports dipped slightly in July, though shipments to the U.S. rebounded after a steep decline in June. Meanwhile, European Central Bank policymaker Peter Kazimir said on Monday that the central bank should avoid making policy changes in response to minor deviations from its inflation target, emphasizing the importance of focusing on the big picture. In other news, Fitch Ratings downgraded France’s sovereign credit rating late on Friday to A+ from AA- in the wake of political turmoil. Investor focus this week is also on the Bank of England’s monetary policy decision. The BoE is widely expected to keep its key rate unchanged at 4.00%, though a split vote is likely as some policymakers push for an immediate cut. The Norges Bank meets this week as well, with most economists expecting a tight decision on whether policymakers adhere to their June guidance and deliver another quarter-point cut in the key rate to 4.00%. In corporate news, Rubis (RUI.FP) climbed over +8% following a report of takeover interest from CVC Capital Partners and Trafigura.

Eurozone’s Trade Balance data was released today.

Eurozone July Trade Balance came in at 12.4 billion euros, stronger than expectations of 11.7 billion euros.

China’s Shanghai Composite Index (SHCOMP) closed down -0.26%, while Japan’s financial markets were closed for a holiday.

China’s Shanghai Composite Index closed lower today as investors digested fresh economic data from the country and kept an eye on trade talks between Beijing and Washington. Data from the National Bureau of Statistics released on Monday showed that growth in retail sales and industrial production unexpectedly slowed in August. Also, expansion in fixed-asset investment during the first eight months of the year slowed sharply, marking the weakest performance for the period on record except for the pandemic year of 2020. In addition, data showed that China’s unemployment rate ticked up in August, while new home prices posted another monthly decline. The data indicate that the world’s second-largest economy is beginning to show fatigue after surprisingly strong growth earlier this year. However, the benchmark index’s losses were limited as the downbeat economic data bolstered expectations that policymakers would roll out additional stimulus to achieve this year’s official growth target of “around 5%.” Goldman Sachs economists said in a note that Beijing will likely need to implement more targeted easing measures in the coming quarters, given sluggish domestic demand and persistent weakness in the labor and property markets. Meanwhile, chip stocks rallied on Monday after China launched an anti-dumping investigation into certain U.S.-made semiconductors, boosting expectations for the domestic industry. The move came a day before U.S. and Chinese officials began talks in Madrid covering national security, trade, and economic issues, with discussions also including Washington’s push for Chinese divestment from TikTok. In corporate news, CATL jumped over +9% after China announced plans to nearly double so-called new energy storage capacity, and JPMorgan upgraded the stock to Overweight.

The Chinese August Industrial Production rose +5.2% y/y, weaker than expectations of +5.7% y/y and the smallest gain since August 2024.

The Chinese August Retail Sales rose +3.4% y/y, weaker than expectations of +3.8% y/y and the slowest pace since November 2024.

The Chinese Fixed Asset Investment rose +0.5% y/y in the January-August period, weaker than expectations of +1.5% y/y.

The Chinese August Unemployment Rate was 5.3%, weaker than expectations of 5.2%.

Japan’s Nikkei 225 Stock Index was closed today for the Respect for the Aged Day holiday. The markets will reopen on Tuesday.

Pre-Market U.S. Stock Movers

Tesla (TSLA) surged over +7% in pre-market trading after CEO Elon Musk bought about $1 billion worth of the EV maker’s shares.

Nvidia (NVDA) fell over -2% in pre-market trading after China’s market regulator said in a preliminary probe that the chipmaker had violated the country’s anti-monopoly laws.

Texas Instruments (TXN) and Analog Devices (ADI) slid about -3% in pre-market trading after China over the weekend launched an anti-dumping investigation into some U.S.-made analog chips, including those produced by the two companies.

Builders FirstSource (BLDR) dropped nearly -1% in pre-market trading after Wedbush downgraded the stock to Neutral from Outperform.

Union Pacific (UNP) rose more than +1% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $251.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - September 15th

Dave & Buster’s Entertainment (PLAY), Radiant (RLGT), High Tide (HITI), The Hain Celestial (HAIN), Coda Octopus (CODA), Champions Oncology (CSBR).