Positive signals have emerged from trade negotiations between China and the US, but global markets cannot afford to be complacent. Starting this Wednesday, global markets will enter a critical 72-hour period.
According to reports from Xinhua News Agency and CCTV News, on July 28-29 local time, Chinese Vice Premier He Lifeng, the lead negotiator for China in the Sino-U.S. economic and trade talks, met with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer in Stockholm, Sweden, for Sino-U.S. economic and trade talks.
The two sides engaged in candid, in-depth, and constructive exchanges on issues of mutual concern, including China-U.S. economic and trade relations and macroeconomic policies. They reviewed and affirmed the consensus reached at the China-U.S. economic and trade talks in Geneva and the implementation of the London framework.
According to the consensus reached at the talks, the two sides will continue to push for the extension of the 24% reciprocal tariffs imposed by the U.S. and China’s countermeasures for another 90 days as scheduled.
In the coming days, a series of key U.S. economic data releases, earnings reports from tech giants, and critical trade policy milestones will unfold. The cumulative impact of these events may set the tone for market trends in the remainder of the year.
Market tests will begin on Wednesday, when the U.S. will release second-quarter GDP data, followed shortly thereafter by the Federal Reserve’s interest rate decision. Following that, tech giants such as Microsoft, Meta, Apple, and Amazon will release their earnings reports after the market closes on Wednesday and Thursday, while the highly anticipated U.S. July nonfarm payrolls report will be released on Friday.
Any of these events could trigger market volatility.
Against the backdrop of a significant rebound in U.S. stocks from April lows and already elevated valuations, this “super week” is seen by the market as a severe test.
Mike O’Rourke, an analyst at Jones Trading, stated that this week “may prove to be the most critical week of the year,” with its outcomes testing Wall Street’s resolve.
Meanwhile, market attention is also turning eastward, as the upcoming Politburo meeting in China prompts investors to closely monitor new economic policy signals from the country.
01 U.S. economic data to be released in bulk
In the latter half of this week, a series of major economic data releases will provide key clues for assessing the health of the U.S. economy. According to the Atlanta Fed’s forecast, the U.S. second-quarter GDP annualized growth rate is expected to be approximately 2.9%, primarily reflecting a decline in imports. Previously, in the first quarter, a surge in inventory-related imports had dragged down GDP.
In terms of monetary policy, despite President Trump’s insistence that interest rates should be significantly lowered, the market widely expects the Federal Reserve to maintain the current interest rate range of 4.25% to 4.5% at its meeting on Wednesday.
Investors will focus on whether there is an expanding divide between Federal Reserve Chair Jerome Powell and other policymakers—one side seeking to further assess the impact of tariffs on inflation before cutting rates, while the other side urges swift action.
Finally, Friday’s jobs report is expected to show that the US added 115,000 jobs in July, a slowdown from the previous month’s 147,000.
According to a FactSet survey, any unexpected data in either direction could trigger cross-market volatility. Charlie McElligott, a derivatives strategist at Nomura Securities, noted that the “absolutely crowded data calendar” means there is “significant event risk” at month-end.
Tech giants’ earnings reports test market resilience
As the data is released, the U.S. earnings season is also reaching its peak. Microsoft and Meta are set to report earnings after the market closes on Wednesday, with Apple and Amazon following suit on Thursday. The combined market capitalization of these four tech giants exceeds $11 trillion, and their stock performance holds significant influence over Wall Street.
In recent weeks, driven by optimism over the economy’s resilience and the expectation that artificial intelligence will drive strong growth for the giants, U.S. stock markets have hit new record highs.
However, the rapid rise in the market has also caused concern among some analysts and investors. The S&P 500 index has risen 8.3% this year, with an expected price-to-earnings ratio of 22 times for the next 12 months.
Against this backdrop, the performance and outlook of tech giants will directly test whether the current high market valuations are justified.
Trump’s tariff deadline looms
Uncertainty also stems from the trade sector. The deadline for the Trump administration to impose “reciprocal” tariffs on countries with which it has not yet reached a trade agreement is 12:01 a.m. on August 1, Washington time.
In recent months, investor sentiment has eased as the US reached trade agreements with major partners such as the EU, Japan, and the UK, and extended the tariff suspension measures with China for 90 days. Wall Street banks have also lowered their forecasts for the probability of a potential recession. Investors are generally betting that Trump will avoid implementing tariffs that could trigger excessive market volatility or postpone them until after an agreement is reached.
However, risks remain. Matt King, global market strategist at Satori Insights, stated, “Trump is Trump after all, and tariff risks and related uncertainties persist.”
China’s policy direction draws attention
In China, the upcoming Politburo meeting has become another focal point for the market.
