US stock futures rise on EU deal and reports of a longer trade truce with China

S&P 500 futures gapped 0.5% higher on the open Sunday evening after US President Donald Trump and European Commission President Ursula von der Leyen said the two sides had reached an agreement to avoid a spike in tariffs, which would have come into effect at the end of this week.

The SPDR S&P 500 ETF has since pared its gains, up 0.2% as of 8:00 a.m. ET.

Imports from the EU will face tariffs of 15%, in line with previous reports about the terms of the deal, largely mirroring the US’s recent pact with Japan.

“As with Japan, this willingness to reduce already implemented auto tariffs appears to have been the most important shift in Trump’s negotiating position to secure a deal also with the EU,” wrote Jacob Funk Kirkegaard of 22V Research.

Separately, the South China Morning Post is reporting that the US and China will extend their mutual 90-day watered-down tariffs for another three months during trade talks in Sweden this week, citing unnamed sources on both sides.

In an interview on Fox Business News last week, US Treasury Secretary Scott Bessent said “what is likely an extension” to the previous agreement, which is poised to expire on August 12, would be reached during these meetings.

“This development, if confirmed, would further reduce the urgency surrounding this week’s trade calendar,” Deutsche Bank macro strategist Jim Reid wrote.

Ahead of this week’s talks, the US had recently softened its position on one of the most contentious issues with regard to China — technological development, and in particular, AI — by allowing major chip companies like Nvidia and AMD to resume sending certain processors to the world’s second-largest economy.