North American Morning Briefing: Futures Rise Ahead of U.S.-China Trade Talks

OPENING CALL

Stock futures rose Monday, boosted by the prospect of a trade agreement between the U.S. and China.

Both sides of the negotiation table appeared confident over the weekend as Treasury Secretary Scott Bessent said a framework to a deal had been reached. Trump will meet his Chinese peer Xi Jinping for talks on Thursday in South Korea.

Trump is in Japan today.

Despite the optimism, the world's two largest economies are likely to reach what ANZ called a half-baked agreement on issues including TikTok and rare earths.It would reflect "the ongoing trend of managed decoupling, as both countries pursue self-sufficiency."

The prospect of a trade deal between the U.S. and China weighed on gold miners in London and Johannesburg.

Elsewhere, Trump on Saturday said he would tack on an additional 10% tariff on Canada in response to an ad campaign released by the province of Ontario.

Beyond geopolitics, investors await key economic data this week from both sides of the Atlantic.

The Federal Reserve is expected to cut interest rates on Wednesday, while investors anticipate the European Central Bank will hold rates steady Thursday.

Commerzbank said the central bank decisions, in addition to trade talks, add to the possibility of higher volatility.

Earnings season continues, meanwhile, with results expected this week from major tech companies Alphabet, Amazon, Apple, Meta Platforms and Microsoft.

Stocks to Watch

Advanced Micro Devices traded 2.4% higher after setting a record-high close on Friday.

Avidity Biosciences rose 43% after Novartis agreed to buy the biotech company.

GameStop gained 7.7% amid a frenzy around meme stocks.

Grindr shares rose 2.3% after it got a buyout offer that values it at nearly $3.5 billion.

Microsoft rose 1.1%. The company was upgraded to buy from neutral by Guggenheim.

Newmont fell 4% as investors opt to take profits from gold.

Watch For:

Data on U.S. Durable Goods for September was due.

Today's Top Headlines/Must Reads:

- Corruption Probe Underway at Rio Tinto's Mongolian Copper Mine

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- America's Hottest New Investment: Rare-Earth Companies

MARKET WRAPS

Forex:

The dollar fell slightly against a basket of currencies, while ING says the Chinese central bank's decision to keep pushing the yuan higher was mildly negative for the U.S. currency.

The euro traded flat against the dollar as France's Socialist Party threatened to topple Prime Minister Sebastien Lecornu's minority government Monday if their budget conditions aren't met.

Sterling rose slightly against the dollar and against the euro as risk sentiment improved With no major U.K. releases due Monday, sterling will continue to take its cue from risk sentiment and global developments, according to Monex Europe.

Bonds:

Treasury yields rose amid positive risk sentiment fuelled by market expectations of a rate cut by the Federal Reserve this week and hopes for a U.S.-China trade deal.

Markets appeared to shrug off Scope Ratings' decision to downgrade credit rating of the U.S. to AA- from AA, while raising the outlook to stable from negative.

Two more Fed rate cuts this year seem all but certain , according to Aptus Capital Advisors, adding that the market was pricing about three cuts in 2026, which would bring the fed funds rate to around 3%.

"As the loosening makes its way through the system (with a lag), we do fear the economy could reaccelerate while other factors such as energy prices bottom out and push higher, potentially creating another bottom in inflation data."

The 10-year Treasury yield rose and yields were expected to settle higher in the longer term as inflation stayed elevated, ING said, expecting steeper curves and higher rates.

Clearer evidence that Fed policy is back on a path to 2% is necessary for longer-term bond yields to move meaningfully lower, Bolvin Wealth Management said.

"This represents the biggest risk that we see in the market. So far, we haven't seen a meaningful rise in unemployment that would compel a faster easing cycle."

Metals:

Gold prices fell as signs of easing trade tensions between the U.S. and China weighed on demand for safe-haven assets. Both futures and spot prices edged lower. Despite the pullback, gold remained up more than 55% this year.

"Attention now turns to a heavy central bank calendar, with rate decisions from the Fed, European Central Bank and Bank of Japan, where further monetary easing could provide renewed support for non-interest-bearing assets like gold." MUFG said.

Gold was projected to stay at an average price of $4,600/oz next year with a potential peak of $5,000/oz in early 2026, HSBC Global Investment Research said.

"In the near term, we expect some volatility and any uptick in risk to support gold," adding that it expects interest in gold ETFs to remain robust this year.

Comex gold futures were consolidating above the 20-day simple moving average, according to RHB Retail Research.

Following the consolidation, the precious metal was likely to resume its uptrend toward $4,400/oz, it said.

Copper prices held near record highs after the U.S. and China struck a positive tone ahead of a Trump-Xi meeting later this week.

Copper prices are also supported by expectations the Fed will cut interest rates this week.

Energy:

Oil prices were little changed after top U.S. and Chinese trade negotiators raised hopes of a de-escalation in U.S.-China tensions.

"Overall, oil markets remain pressured by oversupply risks and fragile global demand, with sentiment hinging on fiscal stability and trade dynamics in the months ahead," XMArabia said.

   TODAY'S TOP HEADLINES 

Novartis Agrees to Acquire Avidity Biosciences for $12 Billion

Novartis is acquiring Avidity Biosciences in a $12 billion deal that the Swiss drugmaker said would further boost its long-term focus on treating neuromuscular disorders.

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The Australian Competition and Consumer Commission filed a case Monday in Federal Court claiming Microsoft didn't clearly tell existing Microsoft 365 subscribers how to opt out of paying for Copilot AI tools when their annual plans renewed.

Softbank-Backed Lenskart Solutions Seeks to Raise Up to $829 Million in India IPO

Lenskart Solutions, one of India's largest eye-wear retailers, is planning to raise up to 72.78 billion rupees, equivalent to $828.8 million, in a share offering, the latest in a wave of initial-public offerings sweeping the India's equities market.

Lenskart, backed by Japan's Softbank and private-equity giant KKR, is pricing its shares from 382 rupees to 402 rupees, the company said.

HSBC to Book $1.1 Billion Provision Related to Madoff Case

HSBC Holdings is booking a provision of $1.1 billion for a lawsuit in Luxembourg related to Bernard Madoff's multibillion-dollar Ponzi scheme, one of the largest financial frauds in American history.

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China EV Maker Seres Plans to Raise Up to $1.7 Billion in Hong Kong Offer

Chinese automaker Seres Group aims to raise up to $1.70 billion in a Hong Kong stock offering, joining the ranks of companies looking to list in one of the world's most active equity fundraising markets.

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China Industrial Profits Keep Up Strong Growth

China's industrial profits rose sharply in September, extending momentum from a stronger-than-expected increase in August.

Industrial profits rose 21.6% from a year earlier in September, following a 20.4% rise in August that ended a three-month run of declines, data from the National Bureau of Statistics showed on Monday.

Trump Reaches Trade Pacts With Southeast Asian Nations

The Trump administration said it reached trade agreements with Malaysia and Cambodia, and frameworks for deals with Thailand and Vietnam during President Trump's trip across Asia. The announcements, while not legally binding, represent significant progress in Trump's quest to lower trade barriers for U.S. goods abroad.

Here's what to know:

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October 27, 2025 06:20 ET (10:20 GMT)

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