EQUITY FUTURES RISE AS MARKETS FOCUS ON INFLATION DATA AND DIPLOMATIC SIGNALS

U.S. and European stock futures up on first day of the week as S&P 500 and Nasdaq contracts rose roughly 0.2%, and European indices rose 0.2% to 0.3%. We see the positive mood dominates in the wake of new record closes on Nasdaq Composite and solid close on S&P 500 on recovery on shares of tech leader Apple spearheading support. Market sentiment remains lifted on hints of major inflation data and renewed focus on diplomatic moves potentially shaping world trade and stability of supplies.

The main catalyst is the fresh U.S. reading of the CPI, and the market is looking for a +0.3% core print and year/year core inflation of close to 3.0%. A in-line or weaker print will support September rate-cut expectations already priced in a 90% chance via ongoing growth ills. Politically, rumors of a later-in-the-year Trump-Putin summit inside Alaska and possible motions towards the easings of sanctions against Ukraine have lifted sentiment with investors looking for possible boon to world trade flows and stability in the petroleum markets.

Hopes of US-China trade tariff accord and an extension of the August 12 truce date have calmed trade nerves and aided US and European markets. Leadership of mega-cap and AI-related stocks such as those of Nvidia, AMD, Apple, Tesla, and Alphabet remains the best reason for resilience of markets on the back of positive earnings visibility and structural bias towards growth. 

In addition to expected positive inflation, rising diplomatic signals, and consistent earnings support among market leaders, we expect more upside in the future. Increasing valuations equal upside surprise inside inflation or reversing in geopolitical talks will spark volatility. Resuming the advance will need wider industry support beyond consistent mega-cap dominance in order to continue strength in the aftermath of tech trend plateaus. This week's CPI print and diplomatic feedback will go a long way in deciding said euphoria takes hold and builds a more robust advance.

MAJOR INDEX PERFORMANCE AS OF MONDAY, 11TH OF AUG., 2025

• Nasdaq Composite: 21,450, modestly higher. This is also knowsn as US 100 index among CFD brokers
• S&P 500: 6,389, slight gain.
• Russell 2000: ~2,100, flat.
• Dow Jones: 44,176, mild rise.

THE MAGNIFICENT 7 AND THE S&P 500

Signs of mega-cap leaders losing their edge come as disappointments of earnings vis-a-vis AI-prepared forecasts, higher capital expenditures, and questions over tariffs. Dependence on a handful of market-leading shares raises risk of the S&P 500 on one-company disappointments and has an ongoing requirement for broader market shares contributing to supporting index resilience.

CAUSES OF THE MARKET MOVE – MONDAY, 11 AUGUST 2025

Although markets begin the new week on a positive bias, three drivers are propelling today's action:

1. FED POLICY HINGES ON DATA ON INFLATION

In FP Markets, investor sentiment greatly remains in favor of this U.S. release of CPI on Tuesday. Futures also indicate 89–90% chance of September rate cut on the assumption of trend path of inflation. Better-than-anticipated core reading could make the Federal Reserve hold back on easing and it lowers stimulus likelihood while increasing volatility of all assets.

2. TRADE POLICY AND GEOPOLITICAL SIGNALS

President Trump's latest assertion that tariffs have "huge positive impact" on the stock market is a classic sentiment driver. Markets also anticipate the U.S.–China tariff truce set to expire on August 12 being renewed—the majority of near-term policy risk being muted. Hopes of a Trump–Putin summit occurring in Alaska are also supporting positioning with anticipation of sanctions relief and higher energy and trade flows as a backstop.

3. POLICY UNCERTAINTY EARNINGS RESILIENCE

Equities hold firm on the strength of solid corporate fundamentals and performances of tech and AI leaders. These areas persist at the heart of market leadership and mitigate macro headwinds and trade-related uncertainty. In FP Markets, we're seeing spot market positioning of a cautionary restraint – waiting for a lead from the inflation data, careful watching of trade and diplomatic news and earnings leadership. A continuation of the rally will depend on more homogeneous than mega-caps participation and a firm policy framework support from the Federal Reserve.